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New guidance for planning obligations

Architects' Journal November 2004


Planning minister Keith Hill has announced a long-awaited draft circular* on the notorious 'Section 106 agreements' properly known as planning obligations. Though falling short of the total reform anticipated in planning green papers, the circular guidance will provide a stopgap pending decisions on Kate Barker's 'planning gain supplement' proposal due at the end of the year and maybe a clearer regime of planning tariffs, both likely to be as much in the gift of the Chancellor of the Exchequer as of the ODPM. Hill said: "We recognise how important it is to improve the current system of planning obligations É Our aim is to issue the final version next Spring."

The introduction says: "The draft Circular included in this document sets out some possible changes to the current negotiated system of planning obligations to be made in advance of potentially more major reforms to the system that may come forward in the next 2-3 years." It summarises current policy and practice thus: "Current policy on planning obligations, as set out in Circular 1/97, requires fair, open and reasonable negotiation of planning obligations, so that the obligations allow development to go ahead which might otherwise have been refused.

The Circular advises local authorities of the 'tests' that they should apply in seeking planning obligations in order to ensure they are in line with the Secretary of State's policy. These policy tests are set out in paragraph 7 of Circular 1/97. However, case law (has) confirmed a broader interpretation of the type of developer contribution that can be agreed under s106. It has required only a connection between an obligation and development which is Ôgreater than de minimisÕ.

So in practice, local authorities are accepting contributions from developers that go beyond the definition in Circular 1/97 Ð contributions that are related to the development but that do not meet the 'necessary' requirement of the Secretary of StateÕs policy tests." In putting forward proposals for reform of the current system of planning obligations, the Government is seeking to address a number of the criticisms raised by those who responded to the consultation in 2003 and in subsequent discussions. "The GovernmentÕs main aim is to make changes to the current system in order to promote speed, certainty, transparency and accountability."

The broad principles are that planning obligations are private agreements negotiated, usually in the context of planning applications 3, between local planning authorities and persons with an interest in a piece of land (or Ôdevelopers'), and intended to make acceptable development which would otherwise be unacceptable in planning terms. Obligations can also be secured through unilateral undertakings by developers. For example, planning obligations might be used to prescribe the nature of a development (e.g. by requiring that a given proportion of new homes are affordable); or to secure a contribution from a developer to compensate for loss or damage created by a development (e.g. loss of open space) or to mitigate a developmentÕs impact on the locality (e.g. through increased public transport provision). The outcome of all three of these uses of planning obligations should be that the proposed development concerned is made to comply as far as practicable with published local, regional or national planning policies.

Kelvin MacDonald, director of policy at the RTPI said: "The RTPI has long argued that it is not the role of planning to act as some sort of tax collector Ð and these proposals support that position." He goes on to raise concern that this draft is not the end of the story and that the Treasury and ODPM are working on proposals to introduce land or development taxation. Under the previous circular there was some doubt about the validity of including affordable housing within the scope of planning obligations.

The new draft provides for that provision while proposed updates to PPG3 (Housing) are being debated. These will emerge around the end of the year and will update guidance on specific size, type and affordability of new stock. In summary, the draft circular brings guidance into line with the new planning act, simplifies some of the policy tests, clarifies advice on payments and gives more emphasis to national, regional and local plan policies. It also encourages the use of formulae and standard charges (ie tariffs to be set out in policies to aid predictability and process) and also encourages the use of unilateral obligations.

Anticipate consultees (deadline 25 January 2005) backing the RTPI's support for the original intention that planning obligations should focus on the direct impact of a development, rather than seeking a range of benefits that should be funded in other ways. Those other ways are in any case on the horizon.

Targetism under scrutiny
The ACA's correspondence with the chief executive of the Planning Inspectorate (AJ news 28 October) has put the spotlight on the melt down of the appeals system and one of its principal causes: the proliferation of Ôquickie refusalsÕ to meet deadlines, long ago predicted and reported here. Ten percent of planning authorities had deductions made from their Ôdelivery grant' last year for falsifying statistical returns.
The ODPM has called for revised returns and is tightening up on their reliability and on the tricks being employed to meet targets. Anticipate a bit of a slump in reported performance in coming quarters.

Live/work postscript

My last column (AJ October 28) discussed the virtues of mixed-use development and its micro-manifestation Ð the live/work unit. Since then a judge in the London County Court has ruled** that the term 'live/work' means the occupant can either live or work there, but has no obligation to do both. The judgment is being eagerly examined by live/work residents in Hackney where nearly 300 planning contravention notices have been issued demanding confirmation that the occupants both live and work on the premises.
Judge Roger Cooke had found that the definition of live/work in the planning guidelines was "vague and arguably ambiguous" and could be interpreted to mean "live and/or work".
Note also that, provided specific planning conditions are not being violated, to use of such a unit exclusively as a dwelling could become lawful after four continuous years, though if challenged, solid evidence would be required to prove the facts of the case. Ironically, although a bad decision for authorities wishing to enforce old live/work permissions, the judgment undermines the excuse that such developments are unenforceable: they merely have to be described correctly in the permission notice ("live and work") and have adequate conditions attached.

* http://www.odpm.gov.uk/
** http://money.independent.co.uk/404.jsp

Brian Waters is principal of the Boisot Waters Cohen Partnership. Visit www.bwcp. co. uk