Headlines: August 2nd, 2006



Local authorities are being urged to make greater use of special planning agreements to help them deliver more affordable homes and infrastructure for their communities. The call, from Planning Minister Yvette Cooper, follows a study showing inconsistencies in the use of the Section 106 agreements by councils.

The agreements, or planning obligations, are legally binding contracts between a developer and a local planning authority, usually operating alongside statutory planning permission. Use of obligations can mean developers are required to carry out specified actions or make contributions after negotiations with the authority. The recent study by Sheffield University found there was still a great deal of inconsistency between local authorities in the use of this system. Sixty per cent of medium and large residential planning permissions in the study and ninety per cent of minor ones did not include section 106 agreements.

Yvette Cooper’s call came with the publication of new guidance for councils and developers on how to make better use of the obligations. It offers practical advice on how to improve negotiations about developments and the implementation of the agreements and even provides real life examples of how to make the process quicker. It also includes a model legal agreement prepared by the Law Society. The guidance is aimed at improving the use of the current system but the Government has also consulted on proposals for a Planning-gain Supplement to capture a small portion of the increase in land value arising from planning permission. Further announcements on that idea are expected before the end of the year.

Yvette Cooper said land values could rise dramatically once planning permission had been granted but in most cases developers paid nothing towards infrastructure costs and affordable housing. “That is why we are looking at new ways to raise more from planning gain. And in the meantime we are urging local authorities to make more use of section 106 agreements to provide the affordable homes we need,” she said. “