The Government intends to introduce a new approach to planning obligations. Its proposals are set out in a consultation paper published alongside the Planning Green Paper. Planning obligations, usually concluded under section 106 of the Town and Cou...
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Reforming planning obligations (AP02/06)

Principal Manager Responsible: Terry Robinson Lead Board Member: Tony Hams

FOR DECISION

  • To agree that the Agency should respond to the Government's consultation paper: Reforming Planning Obligations in the following terms:
  • To broadly welcome the proposals to reform planning obligations to become a positive planning tool to aid sustainable development
  • To advise against the introduction of standardised tariffs  
Relevance to Strategy and Corporate Plan:
  • The Strategy and Corporate Plan advocate the use of creative planning tools, including planning obligations, to deliver our planning policies for sustainable development
  • The Strategy and Corporate Plan emphasise the importance of providing adequate affordable housing to sustain rural communities.  
Staff and financial implications:
  • None  
Main issues to concern the Board:
  • do the proposals for reforming planning obligations meet the Agency's objectives? We think there is a danger of squeezing out locally negotiated elements addressing social and environmental impacts, in turn making development that is needed, more difficult to promote locally?
  • are the proposals likely to meet the Government's declared objectives? We are concerned that the tariff may be seen as legitimising green field development, and may tip the balance against re-use of brownfield sites;
  • are the proposals for affordable housing in line with the Agency's aspirations?  

Background

1. The Government intends to introduce a new approach to planning obligations. Its proposals are set out in a consultation paper published alongside the Planning Green Paper. Planning obligations, usually concluded under section 106 of the Town and Country Planning Act 1990 (as amended), are agreements between local planning authorities and developers that secure contributions (in cash or in kind) to the infrastructure and services necessary to facilitate proposed developments. Circular 1/97 sets out Government guidance on the nature, scope and use of planning obligations.

2. The consultation document proposes to regularise the current uncertain system and use planning obligations as a positive planning tool. The purpose of planning obligations will be refocused to deliver sustainable development, ensuring that development provides social, economic and environmental benefits to the community as a whole. Affordable housing is specifically addressed in the paper with new style planning obligations being used to deliver affordable housing in a wider range of circumstances than now.

Consultation Paper Proposals

3. The consultation paper proposes that:

planning obligations take the form of a standard tariff set locally through the local plan/proposed local development framework process [4.11-4.12];

  • negotiated agreements are used to supplement the tariff only where necessary to address the particular circumstances of a development [4.7-4.8];
  • local authorities have discretion over the type, sizes and location of development on which the tariff is charged and how receipts are spent [4.6];
  • a single planning obligation negotiated around the tariff will replace multiple planning obligations agreed for different purposes with different agencies [4.8];
  • the details of planning obligations are available for public inspection [4.30-4.31];better monitoring and accounting procedures will ensure obligations are used for the purposes intended [4.32-4.33];
  • dispute resolution procedures will apply in the case of disputes between developers and local planning authorities[4.38-4.40];
  • the need for significant infrastructure over the longer term is addressed with local authorities able to pool contributions [4.15].  

4. To better deliver affordable housing, the consultation paper proposes that:

  • contributions towards affordable housing be incorporated within (and could represent a large proportion of) the planning obligation tariff [4.19];
  • the tariff supporting affordable housing would be paid by both residential and commercial schemes and could be in cash or in kind although priority will be to on-site provision [4.20];
  • local planning authorities can allocate sites solely for affordable housing where there is a demonstrable need and where such allocations would be consistent with the objective of creating mixed and balanced communities [4.24];
  • the amount of affordable housing, its type and the form of contribution (land or dwellings) would be a matter of agreement between local planning authorities and developers [4.22];
  • development plans/Local Development Frameworks will set out the proportion of the tariff to be devoted to affordable housing, the nature of local need and how the policy will be applied [4.27].  

The Agency's response

5. The Countryside Agency believes that the current system of planning obligations requires significant reform. We have set out our views in Planning Tomorrow's Countryside that agreements need to be more flexible, simpler and more easily agreed. We believe planning obligations should be seen as a positive planning tool that contributes to achieving net gain with no significant loss. We promote "sustainable development commitments", a positive planning tool that secures both the essential sustainable elements of a scheme and the off-site compensatory provision needed to make a proposal "good enough to approve". 

6. The provision of affordable housing is a key priority for the Agency. Fiscal measures are important in delivering it but we believe the planning system should do much more to ensure that housing needs are met. Meeting affordable housing needs should be one of the key sustainability criteria to be addressed in all relevant development proposals. In addition, local authorities should be able to allocate "Sites for Social Diversity" to meet identified housing needs.

7. We therefore welcome the Government's commitment to reform the current system and support both the emphasis placed on the use of planning obligations to better deliver affordable housing and the refocussing of obligations to deliver sustainable development and secure a wider range of benefits. But we oppose a standard tariff. We doubt that the proposed system will deliver the stated objectives and remain unconvinced that tariffs would work in practice to deliver the desired objectives. For instance, it seems very unlikely that tariffs would be sufficiently responsive to local circumstances or provide enough flexibility to secure the required elements of a sustainable development package for a site. There is also evidence to suggest that standardised tariffs across a local authority area could jeopardise necessary development in rural areas. 

8. We do not consider that the proposals pay sufficient attention to the role of local communities. The Quality of Life Capital technique could be promoted as a means of helping communities define the economic, social and environmental benefits which planning obligations should secure. Nor is there any mention of the role local communities in managing the benefits secured through the use of trusts or other mechanisms.

Tariffs

9. The proposed tariff arrangements raise a number of specific concerns in relation to affordable housing. For instance, where there is only one development site in a community, payment of the tariff as a cash contribution will not provide the affordable housing where it is needed. There could also be unintended negative impacts where, reflecting the level of need, a local authority has set a high tariff of which a high proportion is for affordable housing.  This may make the development financially unviable and result in the developer withdrawing and no housing at all being provided. Conversely too low  a tariff  may be insufficient to finance affordable housing, particularly social rented homes

10. To overcome such shortcomings we believe that that tariffs should only be used in a limited range of circumstances with greater emphasis placed on the role of locally negotiated agreements. Agreements would better reflect the local authority's vision set out in the community strategy and the proposed local development framework as well as responding to the site specific requirements set out in supplementary planning guidance/ proposed local action plans.

Sites for Social Diversity

11. We warmly welcome the proposal that local authorities should allocate sites specifically for affordable housing which is in line with our proposal for Sites of Social Diversity. This will be especially beneficial to smaller rural communities where for environmental reasons the number of development sites are limited but there is clear evidence of local need. We are unclear, however, as to how this policy will be applied outside areas covered by the proposed local action plans (see main Board paper on the Green Paper). Unless action plans are prepared for all towns and villages with an identified need for affordable housing (which seems unlikely), there will need to be some alternative mechanisms to ensure that sufficient sites are allocated for affordable housing in rural areas.