Agenda item - SECTION 106 AND UNILATERAL UNDERTAKINGS

REPORT OF THE DEVELOPMENT AND CONSERVATION MANAGER

To provide an annual update on the details of the current Section 106 agreements and Unilateral Undertakings within the wards/parishes in the area and provide an update on the relevant legislation.

RESOLVED:

(1) That the report entitled Section 106 and Unilateral Undertakings be noted:

(2) That the Development and Conservation Manager be requested to continue to present a report regarding Section 106 and Unilateral Undertakings on an annual basis;

(3) That, other than where a contribution has been negotiated for a specific purpose or project, Ward Members of the area where Section 106 or Unilateral Undertaking funding is generated and the Area Committee be consulted prior to funding being allocated away from that area or from a village location to a town;

(4) That, if it is proposed that Section 106 funding be allocated to the proposed regeneration of Churchgate Shopping Centre project, the Hitchin Committee be advised in advance of the decision to do so;

(5) That the Committee and Member Services Officer be requested to re-circulate the response of the Development and Conservation Manager regarding the involvement of the Hitchin Committee in the proposed development at Highover Farm to all Members of the Committee.

(6) That the Development and Conservation Manager be requested to provide information regarding the amount of housing provided in Hitchin to the Committee and Member Services Officer, for circulation by email to all Members of the Hitchin Committee.

REASON FOR DECISION:

(1) To ensure that there is a robust system for negotiating and managing Section 106 and Unilateral Undertakings.

(2) To ensure that this is kept under constant review and that the risk associated with this activity is managed in an appropriate manner.

The Development and Conservation Manager presented the report entitled Section 106 and Unilateral Undertakings and drew attention to the following;

On Monday the government published a draft new version of the National Planning Policy Framework which is now out for consultation.

This was a consultation document and it did not replace the current National Planning Policy Framework, which was published in 2012.

In general having briefly looked at the new draft it was very similar to the existing NPPF but with more emphasis on the importance of housing delivery.

On the issue of planning obligations and Section 106 there was very little to report.

In terms of planning policies the draft NPPF stated in paragraph 34 that:

“Plans, meaning Local Plans, should set out the contributions expected in association with particular sites and types of development. This should include setting out the levels and types of affordable housing provision required, along with other infrastructure (such as that needed for education, health, transport, green and digital infrastructure). Such policies should not make development unviable, and should be supported by evidence to demonstrate this. Plans should also set out any circumstances in which further viability assessment may be required in determining individual applications.”

This was the only paragraph which referred to what should be put in the Local Plan regarding planning contributions.

Members should be aware that the current Supplementary Planning Document regarding Section 106 was 12 yeas old and this would be updated after the NHDC Local Plan had been though the examination.

In respect of development management decisions on individual planning applications the draft NPPF maintained the strict tests on the use of planning obligations set out in the existing NPPF and also set out in the report at Paragraph 8.1.1, which was that planning obligations should only be used when they are;

a) necessary to make the development acceptable in planning terms;

b) directly related to the development; and

c) fairly and reasonably related in scale and kind to the development.

On the much publicised matter of stopping developers getting away with avoiding their obligations, particularly on affordable housing, in his view the NPPF was quite weak, particularly when you consider that Ministers have been stating that developers will now be forced to deliver the necessary infrastructure and obligations.

Paragraph 58 of the draft NPPF stated:

“Where proposals for development accord with all the relevant policies in an up-to-date development plan, no viability assessment should be required to accompany the application.

Where a viability assessment is needed, it should reflect the recommended approach in national planning guidance, including standardised inputs, and should be made publicly available.”

This meant that developers would no longer be able to label viability tests as confidential.

It then referred to the National Planning Practice Guidance which included details of standardised viability appraisals. The idea behind this was to standardise how viability appraisals are calculated in order to try and de-mystify the process and prevent sharp practices whereby developers pull the wool over the eyes of planning authorities and claim poverty to avoid meeting their obligations.

However even with a standardised approach, it would not avoid disagreements between what a planning authority wanted a developer to deliver and what they claimed the development can afford. With the continued emphasis on the need to deliver new homes, the Development and Conservation Manager could not see there being much shift of emphasis away from the interests of developers towards sometimes costly community infrastructure.

Disappointingly there was no reference to any consideration of removing the rule of five pooling limit which is referred to in Paragraph 8.2.1 of the report.

Also with the same tests set out in the existing NPPF there was no suggestion of a move back to the tariff approach, which NHDC adopted between 2006 and around 2014.

This meant that new financial contributions through Section 106 obligations could only be spent on projects identified in advance and specified within the legal agreement at the time that planning permission was granted.

If this Council wanted to revert back to a more general tariff approach, a Community Infrastructure Levy (CIL) would need to be adopted in the future.

The Development and Conservation Manager expressed concern that the Council had not yet identified how they wanted the lager development areas, identified in the Local Plan, to function and how services would be funded or who would operate them. The current thinking was that the Council did not wish to adopt play areas and open spaces, due to the cost implications associated with maintaining them.

Members considered that identifying projects and infrastructure needs in the legal agreement for developments was probably a good idea, as the pooling limits imposed meant that current arrangements made it difficult to fund an entire project, although this would mean that there was no longer any money to fund projects that had not been identified at that stage.

They noted that up to 50 percent of development in North Herts had been of applications for less than 10 dwellings, which meant that no contributions had been received regarding these developments and queried whether local authorities could have a dual system of both Section 106 obligations and Community Infrastructure Levy and whether the policy of no contributions required for developments of less than 10 dwellings could be removed.

The Development and Conservation Manager advised that if NHDC adopted a Community Infrastructure Levy it could be levied on nearly all developments including those of less than 10 dwellings.

Section 106 and CIL could not both be used for the same development, however it was possible to mix and match and the most likely scenario would be that for strategic sites a Section 106 regime would be applied and for the small developments a CIL would be levied.

It was really important that consideration be given to how NHDC could get the best out of Section 106 agreements.

Members noted that there was a significant amount of Section 106 funding that had not been spent and queried why it had not been spent and whether there were any funds would have to be repaid if not spent.

The Development and Conservation Manager advised that most of the monies held in Section 106 contributions were for specific projects, many of which were affordable housing.

In respect of spending time limits, in most instances the time limit was 10 years

Members noted that there was a lot of money available for sustainable transport and monies available to spend on the public realm and queried whether close links should be made with the County Council regarding sustainable transport needs and what the funds identified for public realm could be spent on.

The Development and Conservation Manager advised that the monies could not be spent on the basics of a project, but had to bring additionality to an existing project. Section 106 monies could only be spent on infrastructure and could not be used for on-going running costs.

The Communities Officer advised that In respect of sustainable transport, a project was being worked on to consider installing bicycle racks in schools and community centres and around the Town Centre of Hitchin to encourage people to cycle.

Members queried why NHDC had not adopted a CIL regime as yet and asked for clarification that negotiating for Section 106 contributions was not as precise as the calculations used for CIL.

The Development and Conservation Manager advised that the CIL regulations had not remained stable and that NHDC had chosen not to adopt a regime that may change dramatically. Also, despite the fact that most of the monies collected would be for County Council obligations, the District Council had the obligation to administer the system, which had cost implications.

Section 106 agreements required an eligible project to be identified and costed in advance and if a project that related to the tests could not be identified no money at all could be collected.

Members noted that a lot of individual and small developments had occurred in Hitchin and asked that this information be provided to Hitchin Councillors.

Members asked whether Section 106 funding could be used to replace play equipment in the play areas that had been identified by the Council for the equipment to be removed.

The Development and Conservation Manager advised that Section 106 funding was intended to enhance infrastructure in order to offset demand by the residents of any new development and there were regulations that governed any spend.

Officers viewed these regulations as broadly as possible, but in the case of play areas, replacing equipment could not be viewed as increasing the capacity of that facility.

Members queried how this Committee could make its views known in respect of policy regarding the choices to make regarding issues such as the introduction of CIL.

The Development and Conservation Manager stated that the Local Plan only addressed these issues at a high level and the Council had to make decisions regarding the more detailed issues such as whether the Council should adopt play areas, when only 10 years’ worth of maintenance costs was provided by the developer and whether private companies should be entrusted with the maintenance of green spaces.

Members felt that NHDC did not capitalise on asking for or spending Section 106 funding by identifying projects and this was not helped by the limit of five pooling rule and the fact that interest on these funds were taken into the general fund.

Members were concerned that Section 106 funding could be used for the Churchgate project without reference to the Hitchin Committee and asked that, if this was a consideration, this Committee be consulted before the decision was made.

Members asked to have input into the plan for the proposed Highover Farm development prior to the application being considered by the Planning Control Committee and queried whether doing so would affect the ability of Members of the Planning Control Committee to take part in any decision regarding the application.

The Development and Control Manage advised that he had previously provided advice regarding this issue and would arrange for this advice to be re-circulated to Members.

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