Manchester makes case for Section 106 to remain

With central government seemingly keen to scrap Section 106 agreements, the city’s senior planners have issued a report spelling out the positive impact its use of this “planning lever” has.

In a major shake-up of the planning system, a white paper released in August 2020 proposed the virtual abandonment of S106 agreements setting out developer contributions in favour of a beefed-up version of the Community Infrastructure Levy.

Broadly, although set within guidelines with specific contributions for specific areas, S106 agreements are more flexible and are negotiated. CIL payments, which were introduced in 2010, see a local planning authority set a levy of a fixed sum per sq m of new floorspace.

Manchester’s planners believe CIL does not offer the flexibility of S106, a system it has been criticised in the past for being too soft with, giving developers citing viability issues too much leeway.

Use of the system does look to have improved. In 2020-21, the percentage of applications with an S106 agreement attached climbed to 17% from around 10% in the two previous years, suggesting that developers are being asked to include it more as the number of major plans coming forward has remained stable.

S106 payments are transferred into a Housing Affordability Fund, which at present has a balance of £3m.

Contributions to affordable housing have climbed over the last three years: from £440,000 in 2018-19 to £833,000 in 2019-20, to almost £1.1m in 2020-21, sums that could increase yet.

As a whole, S106 funds received in 2018-19 were almost £2m, £1.5m of which was spent. In 2019-20, £2.4m contributed to S106, of which £2m was spent. In 2020-21, contributions dropped to £1.25m, with £2.3m spent.

Despite the pandemic, the volume of planning applications and major applications have remained consistent. Eighteen S106 agreements were signed last year, compared to 15 the previous year.

Major projects involving an S106 include the Co-op Live arena at Eastlands, where the agreement includes a residents’ parking zone and an event management strategy.

Manchester’s top team do not rate CIL, at least in its current form, as is made obvious in the report of planning director Julie Roscoe: “It is widely recognised that CIL is inflexible and cannot respond to changing markets; fundamentally CIL and its application has been subject to regional disparities in take-up largely as it simply does not provide the funding necessary to support infrastructure. It can also not be used to provide affordable housing.”

The conclusion of the report is that S106, despite limitations, remains an “invaluable tool” for the city. However, Manchester’s fears may not come to pass.

Since the government’s recent by-election defeat in Chesham & Amersham, a campaign in which planning was a key battleground, political commentators have suggested a softening of the proposed planning reforms seems likely as attentions are focused elsewhere.

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The abolition of S106 wouldn’t bother Liverpool, judging by how little they insisted on it. Therein likely lies the government’s primary motivation for removing “discretion”.

Sorry Manchester, but we did try to warn that our problems will be yours in the end too!

By Jeff

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