Do s106 agreements require an overhaul?

Richard Carr, a Commercial and Residential Development specialist, has backed government plans to overhaul section s106 agreements.

Development is being stunted

Richard Carr Planning Permission s106

Do s106 agreements require an overhaul

Richard Carr has worked in the industry for over three decades and believes outdated Labour policies such as the Community Infrastructure Levy (CIL) and s106 are seriously afflicting the industry. In his opinion, commercial and residential development now has too many taxes and restrictions and is the reason why many developers are turning their backs on the industry.

He feels a relaxation of these taxes, like the current government has done with the ‘vacant building credit’, would be beneficially to all.

Work to overhaul the s106 agreement is also high on Planning Minister Brandon Lewis’ agenda, who last month unveiled his proposals.

s106 agreements explained

The common use of any planning obligation is to secure affordable housing. S106 agreements are sometimes called ‘developer contributions’ and are similar to highway contributions and CIL.

In the past CIL and s106 agreements have been wrongful deemed as the same thing, however, in actual fact the introduction of CIL was to tightening up the s106 agreement. CIL was developed to address the broader impacts of development, whereas s106 agreements are focused on addressing the specific mitigation required by a new development.

A developer shouldn’t be paying for the same infrastructure in relation to the same development.

Time to speed things up

Lewis believes that by speeding up the current system and creating a dispute resolution service managed by an external body, it would entice developers back into the market.

Planning Portal explained the minister’s proposals:

  • Setting clear time limits so section 106 negotiations are completed in line with the existing 8 to 13 week target for planning applications to be processed
  • Requiring parties to start discussions at the beginning of the planning application process, rather than the current system where negotiations can often start towards the end
  • A dispute resolution process where negotiations stall preventing development
  • Using standardised documents to avoid agreements being drafted from scratch for each and every application
  • Potential legislation in the next Parliament to give the new measures teeth

Lewis said: “Section 106 planning agreements can bring great benefits to local communities but too often they drag out planning applications for months.”

A more aggressive approach is needed

Richard Carr believes Brandon Lewis’ pro-active approach will improve the system, but in his opinion a far more aggressive overhaul of the system is needed.

CIL and s106 taxes should be added to stamp duty as a progressive tax on value. How can it be correct for a developer to pay £385 planning fees on a 500 sq.ft flat and the same for a 18,000 sq.ft house?!

The same with CIL, how can it be right to pay the same amount per sq ft. on the water as a house with no view in Poole?

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