I’m pleased to be able to say that we’ve made some real progress. Particularly on the Section 106 ‘holiday’ announcement made in the September 6 growth and housing announcement, I’ve been able to deliver everything my local government colleagues asked:
Firstly, where a developer wants to renegotiate the affordable housing element of a Section 106 agreement to unblock a development, we wanted to make sure that there’s an objective test in place to check whether it’s necessary.
Section 106 agreements have been a key vehicle for providing affordable housing over the past decade, so it follows that agreements should only be renegotiated for solid and independently assessed reasons. We also wanted to be sure that the decision is transparent, and based entirely on publicly available information rather than hidden behind the wall of ‘commercial in confidence’. I’m pleased to be able to report that all of this has been agreed and is going to happen.
We also wanted the opportunity, where a site is deemed unviable and the Section 106 requirement is negotiated down, for a local authority to be able to put in a bid to the Homes and Communities Agency (HCA) against the £300m allocated for new affordable housing, or the £10bn loan guarantee scheme aimed at supporting house building, to enable the site to go ahead as originally planned. This is of course in line with key Lib Dem objectives: it not only ensures that affordable homes are not jettisoned as developers bid to unblock stalled schemes; it also means that developments can go ahead quickly, but with a good mix of housing – something which we Lib Dems particularly cherish. Section 106 agreements have meant that the bulk of social, subsidised housing, is no longer built in separate, segregated estates exclusively for the poorest and on the cheapest sites. Instead it has been integrated into mixed-income communities of tenants, shared owners and owners. This is something worth fighting to continue and again, I’m glad that we have now agreed that this is what will happen.
Of course, it’s also worth mentioning as often as we can that that £300m capital funding was also a key Lib Dem win, as it was something Nick Clegg fought hard for in the negotiations around the growth and housing announcement. The extra cash will deliver 15,000 more affordable homes across the UK, more than making up for any potential loss through the Section 106 change, so there will be more, not fewer affordable homes as a result.
Thirdly, overage. I can honestly say that this was a word I hadn’t come across before becoming a minister, but my local government colleagues patiently talked me through it before putting me in to bat for it. This is the mechanism whereby we can guard against developers getting an unjustified windfall gain where, for example, the market turns and significant profits are made on a site that was initially judged to be unprofitable enough for the Section 106 agreement to be waived. It’s basically a way for the local authority to claw back a portion of the sales proceeds to compensate them for the affordable housing which wasn’t built. It seems only fair that if developers benefit when prices have fallen, that they share their extra profits if, in fact, prices are a lot better than predicted and I was happy to fight for and secure this ask.
The final point I wanted to update you on is “land banking”. Many of us are far too familiar with sites where planning consent has been given, somebody has come along a few months later and dug a couple of holes, and that’s considered a “material operation”, satisfying the condition that development has started. Unfortunately, in many cases, particularly in the current climate, nothing then happens for years and years. This is an area where progress has been slower, although both sides of the Coalition agree that digging a few holes in the ground achieves nothing – what we want to see is homes being built. We all agree that this needs to be sorted out, but at the moment we’re trying to work out the best way of doing it – comments and suggestions more than welcome!
If we were in Government by ourselves, we would of course have done things differently right from the start (as I’m sure would the Conservatives if they had a majority). As a Liberal Democrat minister, I continue to believe that democratically elected local councils and the people they serve are the best judges of what development is appropriate in their local area, and that people who already live in an area should have some say in what is built around them. I also believe that our urgent need for more homes mustn’t be a green light for bad planning. It’s about finding the balance, and I hope that you will continue to help me try and get that balance right.
Don Foster is MP for Bath and Liberal Democrat Minister for Communities and Local Government.
* Don Foster is MP for Bath, Liberal Democrat Chief Whip and Coalition Deputy Chief Whip.