Govt seeks views on plan to scrap Section 106
Part of the existing mechanism used by local councils to collect developer contributions could be replaced by a “streamlined” community infrastructure levy, under Michael Gove’s proposed planning reforms.
The change would “largely sweep away the sometimes-protracted negotiation of Section 106 planning obligations”, according to the government.
A 12-week consultation on the proposed reform, which forms part of the Levelling Up and Regeneration Bill, will run until 9 June.
Some commentators are concerned that the move away from Section 106 could reduce the delivery of affordable homes.
At present, around 75% of all S106 contributions, which are negotiated by a developer and a local authority, go towards affordable home provision.
However, the revised CIL would see all contributions go into a central pot and be spent as local councils see fit.
The government said it is “committed to securing at least as much, if not more” affordable housing, once the levy replaces S106.
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In addition, the government believes the new system would be “more streamlined and efficient”, allowing councils to set different rates depending on land values in different areas.
The levy will be charged on the value of the property at completion/sq m and applied above a minimum threshold, according to the government.
“This will allow developers to price the value of contributions into the value of the land and for levy liabilities to reflect market conditions.
“It will also remove the need for planning obligations to be renegotiated if the gross development value is lower than expected while allowing local authorities to share in the uplift if GDVs are higher than anticipated.”
Greg Dickson, planning director at Barton Willmore, now Stantec said the changes could pile more pressure on already under-resourced local planning authorities.
He said: “The government’s commitment to speeding up negotiations regarding planning obligations is supported but the challenge with applying the levy to each square metre of development is that it will need to have regard to geography and with it change in market conditions across each local authority area.”
“This will require evidence and resource from the local authority at a time when capacity is already stretched, especially in many Local Plan teams.”
Dickson added: “The existing s106 approach is far from perfect but it does allow the nuances of a development project to be evidenced and accounted for as part of the planning process.”