Government plans to send teams of mediators into councils to renegotiate stalled developments were scaled back at the last moment after some expressed concern at the focus on renegotiating planning gain agreements.
Communities secretary Eric Pickles announced on Monday that 10 pilot councils would work with mediators to kick-start housing projects that had ground to a halt because developers believed the ‘Section 106’ agreements they had negotiated were no longer affordable.
However, CN sister title LGC has reported that a list of some 20 councils was circulating as recently as last Friday, but was scaled back after many expressed concern that the initiative was too heavily focused on cutting affordable home requirements and did not consider other factors stalling developments.
Other councils objected to the tone of Mr Pickles’ accompanying announcement, which they felt was excessively negative about local government.
Planning gain agreements – mainly for affordable housing but also sometimes for infrastructure – are imposed by councils as conditions for planning consents.
The government believes agreements entered into before 2008 are likely to require more affordable homes than the price of homes for sale can now support, with the result that projects have stalled.
Mediators will try to get these social housing commitments reduced or scrapped.
But a number of councils said that developers’ lack of cash – and potential buyers’ inability to secure mortgages – were far more important barriers than were s106 conditions.
Southend-on-Sea BC was on the original list, but not the one published by Mr Pickles.
Chief executive Rob Tinlin said: “A lot of the sites were standing empty and doing nothing, and that’s got nothing, to the best of my knowledge, to do with unreasonable planning obligations.
“There’s no market place for what they are trying to build, or they’ve paid too much at the top of the market for the sites.”
Mr Tinlin said he had been happy to talk to the department about ways to boost development but not to be a pilot focused on planning obligations. He said his council had already renegotiated the proportion of affordable housing on two stalled developments - removing them entirely in one case - but they had still not restarted.
Graham Farrant, chief executive of Thurrock Council, which was also on the original list, said: “Our analysis shows it is not s106 that is delaying developments here, it is just economic conditions.
“Develops have too little cash and they are uncertain. I don’t think they would start in most cases even if there were no s106 requirements.”
Manchester City Council was on the original list, but deputy leader Jim Battle (Lab) said: “The private sector just hasn’t the money to develop sites and when they do get the money, people then haven’t the money to get mortgages.”
He said the council hoped to launch joint mortgage initiatives with lenders in the autumn.
Other councils on the original list said that s106 agreements were simply not a factor in developments that had stalled in their areas.
The LGA echoed concerns that Mr Pickles was looking for the wrong solution to the problem.
Mike Jones (Con) chair of its environment board, said: “Lack of liquidity in the finance market and limited availability of mortgages stagnating demand are the real hurdles to viability, not the cost of providing much needed s106 infrastructure”.
He said mediation should “only come at the specific request of individual councils”, as imposed mediation would undermine trust in the planning process and increase public hostility to development.
The mediation programme will be delivered through the Homes and Communities Agency (HCA), whose executive director David Curtis said the councils originally approached to participate were those with the highest numbers of unimplemented planning consents.
“We will talk to them to understand why homes are not coming forward and see if there is something we can do,” he said.
“That could be because of s106 or some other policy barrier. Policies deigned pre-crash and not necessarily right for this moment in time and some flexibility is needed.”
Mr Curtis conceded some people might “think it a bit odd” that the HCA would be involved in negotiations to reduce provision of affordable homes, but explained: “We have a wider responsibility for the provisions of good quality housing.”