Category: Section 106

The Proposed London Housing Emergency Measures Package Is Underwhelming

That is the message I have been receiving in many discussions with developers and advisors since consultation started on MHCLG’s Proposed London Emergency Housing Package and The Mayor of London’s draft Support for Housebuilding London Plan Guidance, both documents published on 27 November 2025 for consultation until 22 January 2026.

I’m picking up that the conclusion is reluctant. Clearly, it is helpful that the drought of new housing activity in London has been recognised. Clearly, it is appreciated that MHCLG and the London Mayor have worked hard at a co-ordinated package as between them which moves significantly, and no doubt with much internal organisational pain, from the previous policy position in terms of affordable housing expectations, in terms of the usual approach to CIL and in terms of some aspects of housing standards. There is also a dilemma on the part of the industry: this is an emergency; measures are needed now; if this set of proposals has to be ditched and replaced with a more effective package, we are just losing more time, unless the industry can point with some unanimity towards practical, easily implemented, improvements to what is on offer.

But the reality is that the current package (1) will not be enough and (2) is too caveated and conditional to provide the crucial reassurance that is needed to those who hold the strings in terms of funding or financing. From what I hear I’m not at all sure that the Mayor’s new time-limited route is even likely to be used, as opposed to continued reliance on viability testing.

Following the initial joint announcement on 23 October 2025 I wrote a blog post on 1 November 2025 setting out 4 Key Asks For The London Housebuilding Support Package Consultation. None were taken on board in the consultation drafts. Let’s hope that there still is time before the package is finalised.

To follow the structure of my previous post:

Should there be more focus on stalled sites that already have planning permission?

Of course!

Why ignore the lowest hanging fruit? The opportunity has now passed for primary legislation to reintroduce section 106BA (which could have been a late bolt-on to the Planning and Infrastructure Bill). But why not by ministerial direction reduce the minimum period of five years for the purpose of being able to make applications under section 106A, which are capable of appeal, to say two years – and introduce guidance as to MHCLG’s interpretation of “useful purpose” (of course the courts’ legal interpretation ultimately will be what counts but guidance will still be useful!)?  And in any event introduce firm guidance to local planning authorities that they should approach requests for deeds of variation on viability grounds positively where the case has been made (and set out in the guidance what will be sufficient to make that case)?

Is late stage (as opposed to early stage) review necessary in relation to the proposed “time-limited planning route”?

No!

The uncertainties caused to funders by the mere existence of any review mechanism the application of which is outside their control has a deadening effect on developers’ ability to fund schemes, utterly disproportionate to the likelihood that any review mechanism will ever deliver any material amount of additional affordable housing, schemes are so underwater. And unnecessary uncertainty has been created because the time-limited route envisages a different set of mechanisms to those which currently exist.

The simple change would be for the Mayor’s LPG to specify that for a time-limited period the fast-track thresholds will be reduced from 35% and 50% to 20% and 35% with the structure remaining exactly the same as to when review mechanisms will be required and how they will operate. A bucketload of uncertainty would be immediately removed.

Are there unnecessary difficulties with introducing a viability test into the proposed CIL relief?

Yes!

In fact, this whole new intended structure for 50 to 80% relief from borough CIL is going to be disproportionately complex given that it will rarely make the difference between a project going ahead or not (and with the prospect of later clawback, funders will always assume the worst in any event so it just won’t help bring them over the line). What I’m being told is that where CIL is a killer is on cash flow. On viability – the overall go/stop on development – it is of only marginal influence.

If there is going to be any tweaking of the Regulations:

  • Why not allow for payment at a later stage (you recall that when the infrastructure levy was touted by the previous government as  replacement for CIL it was to be payable at upon completion of the development so would there be such a problem with it being paid, say, on occupation)? Boroughs don’t spend the monies upon receipt – timing isn’t critical to them! And Mayoral CIL is simply paying down long-term debt in relation to Crossrail.
  • Require all boroughs to switch on the potential for exceptional circumstances relief and see what can be done to simplify the process.

Ahead of any Regulations, just lean on the boroughs to switch on exceptional circumstances relief (if they refuse that is a warning sign in itself) and introduce advice as to the evidence that should normally be sufficient. Even that would help.

And incidentally this would actually also would help SMEs, currently shut out of the relief proposed in the consultation document by a combination of the £500,000 liability threshold and the proposed £25,000 application fee. And while we’re at it, extend this beyond residential C3 development.

Are the proposed additional powers to be given to the Mayor enough?

Probably, but…

It really would be useful if the Mayor could call in schemes of 50 units or more even before the borough is minded to refuse them, as long as the statutory determination period has passed – thereby reflecting the current arrangements in the Mayor of London Order 2008 for schemes of 150 units or more.

Final thoughts

Of course the proposed additional grant funding for affordable housing is welcome. But inevitably it isn’t enough.

Surely, we all agree that the thrust of all these measures is not good to the extent that, consistent with the operation of the existing system, it assumes that affordable housing, including social housing (for which there is such a desperate need in the capital) is what has to give in order to enable development to proceed. How can we move to a system where the delivery of social housing is not reliant on, effectively, an affordable housing tax imposed on residential development, given that the current model is not working?

To end on a positive note, I was really cheered to hear about Homes For People We Need campaign and to read their report Making Social Rent Homes Viable. Whilst it identifies that £18.83 billion is required to develop 90,000 social rent homes per year, there is a strong investment case for substantial government subsidy, given that temporary accommodation costs of £2.8 billion annually could in theory service index-linked bonds worth circa £160 billion. “In theory an investment by HM Treasury to build c.130,000 Social Rent homes for those families currently in temporary accommodation, assuming £209,000 subsidy per home and thus a total subsidy of £27.2bn, could reduce the current bill for Temporary Accommodation to zero”.

There are a number of strategic recommendations and suggested policy reforms in the report:

“• Social Housing Tax Credits represent a promising approach, enabling private capital deployment now in exchange for future tax relief.

• Section 106 Agreements should fix affordable housing values at the planning stage to improve market efficiency.

• Right to Buy should be further reformed to preserve the affordable housing stock.

• ‘Flex Rent’ approaches linking rents to household income should be considered to optimise revenue generation whilst maintaining affordability.

• The Housing Association sector desperately needs recapitalisation in addition to the recent 10-year rent settlement.”

Santa hat-tip to Thursday’s Planning After Dark Podcast episode Santa Hats, Social Rent and Squeaky Leather Trousers for the chat with Grainger’s Michael Keaveney which introduced me to this.

In summary I hope that what is arrived at is fast, simple, measures to help meet the current housing and affordable housing emergency. But then I hope that there is a proper longer-term solution along the lines promoted by this report to help meet the underlying and remaining (national not just London) housing and affordable housing crisis. The current section 106 model is not working!

Simon Ricketts, 13 December 2025

Personal views, et cetera

Announcements

Announcements from MHCLG are coming thick and fast ahead of this week’s budget and we had an announcement of our own at Town this week.

So, briefly, on 18 November 2025 there was:

Housebuilding around train stations will be given default “yes”

“Planning reforms to give greater certainty and strength for development around well-connected rail stations, including trains and trams, will be proposed through a new pro-growth and rules-based National Planning Policy Framework, which will be consulted on later this year.”

“The default “yes” will also apply equally across all local authorities, so that these benefits are seized across the country. The proposals will also include minimum housing density standards for these sites, expected to be exceeded in many cases, to make the most of sustainable growth opportunities for local housing, jobs, and businesses.”

This is all rolling the pitch for what will be in the consultation draft NDMPs next month (NB a convenient acronym – now that the NDMPs are to be non-statutory, I suspect that national development management policies may conveniently switch to national decision-making policies, perhaps less of a tongue twister or is that just me?).

What is “well-connected” and how will national minimum density standards be arrived at? We shall have to be patient and wait for the (large) pre-Christmas consultation package.

The announcement also included a separate proposal:

“Measures will also require councils to inform government when they’re inclined to block applications of 150 homes or more so ministers can decide whether to step in and make the decision instead, making sure that good housing projects don’t get lost. 

Particular attention will be paid to those applications where a planning committee intends to refuse it contrary to the advice of planning officers.

Applications called in by ministers will also be sped up through the removal of the mandatory requirement for inquiries, with the option to consider matters through written representations before reaching a decision where appropriate.”

This is big and will require legislation. But it could have a significant effect. In my view the biggest effect would be to create a cooling-off period where a planning committee has resolved to refuse a scheme for 150 homes or more against officers’ recommendations. Not only would the risk of call-in arise before the refusal could be issued but that delay would also lead to the opportunity in practice for the application to return to committee, potentially with a different outcome.

Given that almost 80% of appeals determined by inquiry are currently successful (possibly even higher when it comes to major residential appeals), this surely makes huge sense.

See the fascinating statistics published by Appeal Finder from which I have taken these screenshots:

Written representations determination of some call-ins is an interesting idea – a speedier call-in procedure would be so much more effective (see the way that the Mayor of London uses his call-in power for instance) but how many applicants, looking at these statistics will get nervous as to the prospect of their precious scheme being at the mercy of the written representations process?

Also on 18 November 2025, a consultation paper Reforms to the statutory consultee system was published, with responses due by 13 January 2026. Sport England, The Gardens Trust, and Theatres Trust are proposed no longer to be statutory consultees, with replacement “mitigations” put in place. The criteria are proposed to be tightened for consultation with seven national statutory consultees (see Anne1 for details): The Environment Agency, Natural England, Historic England, National Highways, the Health and Safety Executive, the Mining Remediation Authority and Active Travel England.

Lastly in terms of announcements, we at Town Legal seized that old 2010 concept of “open source planning” to publish our discussion document Simplifying & Standardising Section 106 Agreement Processes: Proposals for Reform which we were pleased to launch in the House of Commons this week through the auspices of the LPDF at an event sponsored by Mike Reader MP (and thank you Lord Charlie Banner for your supportive words too). What do you make of it? Do let us know. We are really keen to reduce the time it takes to conclude section 106 agreements, particularly in relation to small and medium sized schemes. I hope that MHCLG’s consultation package will touch on these issues as well. It is the unglamorous elements of the process that gum up the system, after all.

To quote always-glass-half-full Paul McCartney in that song from the Sergeant Pepper album: “It’s getting better all the time”. To quote John Lennon from the same song (maybe having seen MHCLG’ latest housing supply data on net additional dwellings – 6% decline in housing delivery from last year): “It can’t get no worse”.

Simon Ricketts, 22 November 2025

Personal views, et cetera

4 Key Asks For The London Housebuilding Support Package Consultation

Most chats this week have been about the 23 October 2025 homes for London policy note.

tl;dr summary: positive direction but concerns about potential complexities, uncertainties and as to whether it will all be in place speedily enough.

We’re all now waiting for the consultation to start “over six weeks from November” (fair play, at least no “by the end of Autumn” fudge).

There are plenty of detailed issues arising, and differing interests will want to re-prioritise the measures in different ways, but I thought I would set out four key asks that I have, which in my view should be specifically addressed in the consultation documents:

  1. Should there be more focus on stalled sites that already have planning permission?

This is the lowest hanging fruit. And yet all we have (in paragraphs 33 and 34) is a reference to the potential for renegotiating previously agreed arrangements by way of deed of variation and discouragement as to the use of section 73.

This isn’t enough. I set out the current procedural constraints in my 18 October 2025 blog post London Stalling.

Procedurally, bar reintroducing section 106BA or, for a temporary period, amending section 106A to reduce the 5 years’ requirement, at the very least we need:

  • Specific encouragement for local planning authorities to accept developers’ requests to engage with the process of varying existing agreements where specific criteria (consistent with the direction of the policy note) are met, linked to some sort of oversight, monitoring and/or route for complaint where authorities refuse to engage (given that unless your section 106 agreement is at least five years’ old, or unless this is in the context of a section 73 application (of which more in a moment) there is no right of appeal on the part of the developer)
  • Not the current suggestion that the section 73 process “should no longer be used as an alternative means of reconsidering fundamental questions of scheme viability or planning obligations” but rather a proper recognition of the real challenge of keeping planning permissions, and associated planning obligations packages, up to date as against changing circumstances and the important role that section 73 plays in this. Attempts to make currently unviable schemes viable invariably involve an intertwined mix of scheme changes and changes to planning obligations. Section 73B, introduced by the Levelling-up and Regeneration Act 2023, is less useful as only the implications of the proposed changes are to be taken into account rather than considering the amended proposal holistically against the current development plan and other material considerations. This all needs to be connected up with the continuing problem that Hillside creates for amendments to projects (I was pleased to see Baroness Taylor confirm this week, on behalf of the government, in response to Lord Banner’s tabled amendment to the Planning and Infrastructure Bill, that the government will “explore with the sector” a “statutory role for drop-in permissions to deal with change to large-scale developments”. This is so important!).
  1. Is late stage (as opposed to early stage) review necessary in relation to the proposed “time-limited planning route”?

In basic summary, this route is where a residential scheme can commit to at least 20% affordable housing with a 60/40 social rent/intermediate tenure split with planning permission issued by the end of March 2028. If the first floor of the scheme has not been built by 31 March 2030 (in the case of larger phased schemes, in the case of any phase where the first floor of buildings providing at least 200 dwellings has not been built by that date), “a late review will be undertaken once 75 per cent of homes within the scheme or the final phase are occupied to determine whether a higher contribution for affordable housing can be made”.

Why the late stage review mechanism in these circumstances, rather than the early stage review that is currently the case with fast track schemes that don’t achieve substantial implantation by the specified deadline under London Plan policy H5? Late stage reviews unnecessarily spook funders and lenders, leaving the eventual outcome too late in the process – and also having the public policy disbenefit of being too late to allow for any further affordable housing, that can be unlocked via the review, to be accommodated within the scheme. There is also inconsistency with paragraph 30 which suggests another approach for multi-phase schemes: “For multi-phase schemes, a review of the scheme will apply prior to the start of each phase for which the milestone in paragraph 27 has not been reached, to determine whether additional affordable housing can be provided in subsequent phases.”

Isn’t it better to keep things simple and follow, where possible, the existing mechanisms within policy H5, just with the thresholds temporarily reduced?

  1. Are there unnecessary difficulties with introducing a viability test into the proposed CIL relief?

Permissions which are secured via the new time-limited planning route that commence after the relief is in place and but before December 2028 will qualify for at least 50% relief from borough CIL (NB is this 50% after reliefs and exemptions have been applied and what will be the calibration to work out the higher level of relief where the scheme is delivering more than 20% affordable housing?), but the relief would be “contingent upon meeting proportionate qualifying criteria to ensure relief is targeted at schemes which would otherwise remain stalled or fail to come forwards, with a lower relief applicable where the full available amount is shown not to be warranted.” This sounds complicated. With this hurdle in place, not only would the developer not know whether they will qualify for the relief until planning permission is granted and they receive their liability notice, but it means that the purported advantage with the time-limited planning route of not having to undertake viability assessment is illusory, because the work will be needed in any event to secure the CIL relief – and the requirement will surely be very hard to turn into workable legislative drafting – we know how difficult exceptional circumstances relief is to secure due to the various criteria and requirements built into that particular mechanism.

  1. Are the proposed additional powers to be given to the Mayor enough?

Boroughs would be required to “refer planning schemes of 50 units or more where the borough is minded to refuse the application – this would be a more streamlined process operating alongside the existing referral threshold of 150 units which applies regardless of a borough’s intended decision, and would ensure that the Mayor was able to review whether the right decision had been reached in the context of the housing crisis.”

But there may well be cases where schemes are being held up at borough level, either pre-resolution or post resolution whilst for instance the section 106 agreement is being negotiated, and where securing planning permission by the end of March 2028 will be critical under this package of measures. Here, speedy intervention, or threatened intervention, by the Mayor could really help. So, for this time limited period at least, why not allow the Mayor to intervene at any time after the end of the statutory determination period in relation to any scheme comprising at least 50 dwellings? Otherwise, that absolute cut of the end of March 2028 for grant of planning permission will need to some flex built in to allow for the possibility of appeal etc.

I’ll confine myself to those four although I have others, and I know that you do too…

NB none of this is to be churlish as to the scale of the task that MHCLG and the GLA have before them. It is of course by no means easy to get this package right and to avoid unintended consequences.

Simon Ricketts, 1 November 2025

Personal views, et cetera

How Do You Solve A Problem Like…Speeding Up Planning Appeals Without Being Unfair Or Counter Productive?

One of Rodgers and Hammerstein’s best.

MHCLG and the Planning Inspectorate this week announced that they would be imposing additional discipline on the parties to planning appeals which proceed by way of written representations. Regulations are to be introduced, to come into effect by the end of 2025, which will (according to accompanying detailed guidance):

  • expand the use of the simplified written representations procedure currently used for householder and minor commercial appeals (“part 1 appeals”) so that it will also apply to appeals in relation to the refusal of planning permission or reserved matters, the imposition of conditions on approvals and the refusal of prior notification or prior approval.
  • retain the six months’ appeal time limit for these appeals and allow PINS to transfer an appeal to the traditional written representations process where the simplified process “is not best suited for handling the appeal”.
  • not permit any further documents to be submitted by an appellant with their appeal beyond a copy of their application, the local planning authority’s decision notice and “a brief statement responding to the LPA’s decision and why they disagree.”
  • not permit an appeal statement or any other comments to be submitted by the local planning authority other than a copy of the information that they considered when deciding the application. “If members overturn an officer recommendation at committee, it’s important that meeting minutes and refusal reasons are robust and fully address any issues. LPAs should update their notification templates to communicate that any comments made by interested parties at the application stage will be shared with the Planning Inspectorate in the event of a part 1 appeal and that they cannot comment on the appeal.”
  • not permit any comments by third parties (although representations made during the application process will be made available to PINS by the local planning authority).

The procedure will apply to appeals in relation to applications submitted after the new system comes into force.

If this results in a crisper appeal process, without any loss of quality, there is much to like here, although care will be needed:

  • This makes it all the more important that applications when submitted are “appeal ready”, particularly as there is always a risk that the local planning authority may not allow amendments or additions to the application documentation to be submitted during the application process.
  • Local planning authorities’ reasons for refusal will need to carefully considered – and the reasoning within officers’ reports.
  • Third parties will also need to be careful to make their views known at application stage, without the ability to supplement them subsequently.
  • It seems that scope will be lost for parties to narrow down the points at issue during the appeal process.
  • The Planning Inspectorate recently changed its guidance to require completed section 106 agreements and unilateral undertakings to be provided when the appeal is lodged. The expansion of the simplified written representations procedure will make it even more important that the completed document has been agreed with the local planning authority and is robust.
  • There is usually uncertainty, when an appeal is lodged, as to what procedure the Planning Inspectorate will adopt: inquiry, hearing or written representations. What where the appellant is seeking an inquiry or hearing but the Planning Inspectorate determines written representations to be appropriate? That is already procedurally problematic (for instance when an inquiry is sought and the appellant ends up with a hearing).

Of course, some muscularity is needed on the part of the Planning Inspectorate to ensure that appeal timescales continue to reduce. That has been a successful aspect of the reforms to inquiry procedure, for instance as to the setting of dates for inquiries where we no longer have such a merry dance driven by counsel availability. But there are dangers, as demonstrated by this week’s ruling by the High Court in Tiwana Construction Limited v Secretary of State (Eyre J, 24 June 2025).

This related to a hearing into an appeal against West Suffolk District Council’s proposed development of 10 self-build houses in Burwell. As a result of comments by the inspector at the hearing, the appellant decided to submit a section 106 agreement committing to the provision of three of the dwellings as affordable housing. The inspector gave a deadline for submission of a completed section 106 agreement, and then extended it, but due to complications it could not complete an agreement by the inspector’s extended deadline and instead submitted a completed section 106 unilateral undertaking together with a note from the appellant’s solicitors setting out why it should be taken into account and was satisfactory but that an agreement would take longer.

The judgment makes interesting reading, showing that by the deadline the inspector had already prepared a draft decision letter, with a draft conclusion that the appeal should be dismissed. The judgment is revealing as to the correspondence that then ensued within the Planning Inspectorate between the inspector and her professional lead. The inspector was minded not to take into account the unilateral undertaking because she had some concerns about the drafting and she had been told she would be receiving an agreement rather than an undertaking and that a further extension would be needed for completion of an agreement. The inspector gave a written statement to the court hearing: “The Professional Lead advised me that as I was already going to dismiss the appeal for other reasons and the Claimant had not met my deadline for the provision of a S106 agreement, I should side-step the issue of affordable housing in my Decision Letter because it was not a determining factor in my decision…”

The Planning Inspectorate refused the request for a further extension (“This extension for the agreement has been rejected by the inspector. The inspector gave a deadline and was accommodating by agreeing to an extension. The agreement was not submitted in accordance with that extended deadline, so she will make her decision accordingly“) and the inspector then duly dismissed the appeal.

The decision was quashed:

“The position can be stated shortly. The Inspector made a deliberate decision to side-step the question of affordable housing in the Decision Letter. She took, therefore, a deliberate decision not to explain either why she was not taking the proffered affordable housing into account as a positive factor in favour of the appeal nor why she had no regard to the Unilateral Undertaking. This was not the result of inadvertence or of reasons being expressed in a clumsy or abbreviated form. It was a choice deliberately made by the Inspector. It had the effect that the Claimant was not given even the briefest of explanations as to why the affordable housing, for which the Unilateral Undertaking made provision, had not been taken into account. There was a failure to provide the reasons for the decision on a contentious matter of importance.”

Furthermore, “provision of affordable housing was obviously a matter of weight in the planning balance in this case. It was, therefore, to be taken into account even though doing so might not have changed the ultimate outcome.”

“It is at least possible that if the Inspector had considered the Unilateral Undertaking and had taken account of that provision she would have increased the weight she attached to affordable housing as a positive factor in favour of the appeal. It cannot, therefore, be said that the outcome would necessarily have been the same and relief is not to be refused on that basis.“

I’m sure we all have these procedural dilemmas on appeals from time to time. Completing the section 106 agreement or unilateral undertaking may be taking more time than anticipated for reasons outside the parties’ control, or further evidence comes to light which the inspector is refusing to receive. How far do we push it? This judgment repays careful reading.

Until next week, So Long, Farewell…

Simon Ricketts, 28 June 2025

Personal views, et cetera

Why Does Negotiating Section 106 Agreements Have To Be Such A Drag?

The HBF’s May 2025 research piece What is the timeframe for local authorities to agree community investment? shows what a huge drag on planning permission timescales is represented by the process of negotiating a section 106 agreement (which of course needs to have been completed before planning permission can be issued).

Read this:

“To better understand the current state of S106 agreement timelines, the Home Builders Federation (HBF) submitted a Freedom of Information (FOI) request to local planning authorities across England. These results are based on the data from more than 2,500 S106 agreements across over 50 local authorities.

The FOI exercise found that the average S106 approval timeline was:

2022/23: 425 days

2023/24: 459 days

2024/25: 515 days

In just two years, the average time required to finalise an S106 agreement has increased by 90 days – a 20% increase.

The responses also highlight the extremities that developers in some local authorities are facing. The maximum recorded timescale was 2,679 days, or more than seven years, for a single S106 agreement to complete the agreement process. The shortest average timescale reported by any of the respondent councils was 192 days.

Additionally, 35% of all S106 agreements took longer than 12 months to finalise. Across all responses, 76% of local authorities reported average timelines that exceeded a year, and over a third of councils had an average timeframe of over 500 days.

In 2024/25, 45% of LPAs had agreements finalised that had taken over 1,000 days to complete.”

The document doesn’t specify the scale threshold of applications considered (I’m assuming by the number of agreements that this is in relation to developments of any scale, not just complex schemes where we know that specific issues requiring bespoke solutions and substantive negotiations may required to unlock solutions). Nor does the document specify when these time periods are measured from:  validation of the application, instruction of the LPA’s solicitor or the resolution to grant. Whatever, the statistics are appalling as is the relentlessly worsening trend.

The work is of a piece with the equally depressing Richborough/LPDF research carried out by Lichfields, How long is a piece of string? (16 May 2025). The average determination period for outline planning applications for 10 dwellings or more was 284 days in 2014. In 2024 it was 783 days. Given improvements in the performance of the Planning Inspectorate in relation to planning appeals (particularly appeals determined by way of public inquiry), it is now substantially quicker to secure a decision by way of appeal than by waiting for a final decision from the local planning authority.

This reflects our own anecdotal experience; we are seeing far more appeals on the basis of non-determination within the statutory period, and (tying back into that HBF work) one factor for clients is that with an appeal there is an external discipline upon the parties to agree and complete the section 106 agreement or unilateral undertaking within a specific, externally set, timescale.

Stepping back, this is all crazy and contrary to the efficient operation of the public sector. It’s equivalent to the use of A&E departments by those who find it faster, easier or more effective than going to their GP. Something is massively wrong with the operation of the planning system and it’s nothing that the Planning and Infrastructure Bill or indeed in the government’s December 2024 changes to the NPPF will fix. MHCLG’s proposed alterations to the system in relation to “minor” and “medium” residential development (summarised in my 31 May 2025 blog post Small Changes). Indeed I referenced in that post what was said in relation to section 106 agreements for “medium” residential development (less than 50 dwellings – although why stop at that size cap?):

“We … welcome views and evidence on:

1. the specific barriers facing SMEs in agreeing s.106 obligations – including availability of willing and suitable Registered Providers

2. what role national government should play in improving the process – including the merits of a standardised s.106 template for medium sites

3. how the rules relating to suitable off-site provision and/or appropriate financial payment on sites below the medium site threshold might be reformed to more effectively support affordable housing delivery, where there is sufficient evidence that onsite delivery will not take place within a suitable timeframe and noting the government’s views that commuted sums should be a last resort given they push affordable housing delivery timescales into the future.”

The lack of a standardised template is one issue. We end up having frustrating arguments over what should be uncontentious and standard wording, for instance to protect mortgagees in a way which is institutionally acceptable, or simply over our attempts to make a particular LPA’s “standard” drafting operate as the parties intend. The failure of the Law Society to update its June 2010 template (which never really achieved sufficient support and was not well used) is disappointing. Without drama we need a national template on the MHCLG website asap for smaller schemes, expressly supported by local government, the development industry and professional bodies (including those representing banks), with specific guidance as to the circumstances in which there can be departures.

But the problems go much wider than that:

Many LPA legal teams are woefully under-resourced, without a lawyer with the necessary experience, project management focus or internal clout to do more than act as a post-box with those instructing them, adding pressure and unfair responsibility on planning case officers or allowing other internal or external consultees to drive their particular agendas. There is often a reluctance on the part of the in-house legal team to outsource to an external law firm (even though the applicant pays and is usually eager to pay more if that results in faster delivery of the completed agreement) because of internal pressures not to de-skill further the in-house team or lose the ability to recoup costs.

I suspect that LPA lawyers (some of whom are true unsung heroes) would equally point the finger at some applicants’ solicitors – and indeed some applicants – who may be unprepared to back down from unreasonable negotiating positions or may introduce new points post committee resolution – or who may start ghosting them when something commercially is happening in the background.

Negotiations often start way too late. The government’s planning practice guidance on planning obligations  (1 September 2019) says this:

“When should discussions on planning obligations take place?

Discussions about planning obligations should take place as early as possible in the planning process. Plans should set out policies for the contributions expected from development to enable fair and open testing of the policies at examination. Local communities, landowners, developers, local (and national where appropriate) infrastructure and affordable housing providers and operators should be involved in the setting of policies for the contributions expected from development. Pre-application discussions can prevent delays in finalising those planning applications which are granted subject to the completion of planning obligation agreements.”

So often though, this isn’t happening.

There also no easy answer if negotiations genuinely hit a brick wall – for instance as to whether a particular contribution is justified or as to the precise drafting of a particular clause. Section 158 of Housing and Planning Act 2016 specifically inserted section 106ZA and Schedule 9A (“resolution of disputes about planning obligations”) into the 1990 Act, to provide for a system where an independent expert could be called upon where there are sticking points in section 106 negotiations, but it was never brought into force. It’s sitting there just waiting to be fleshed out by an SI and switched on! Whether the third party were to make a binding determination or, more practically, gave non-binding guidance that would still carry some weight if an appeal were subsequently required, in my view this needs to be dusted off!

Section 106 agreements are also of course lumbering beasts of burden, the legal mechanism for delivering so many strands of public policy – affordable housing, affordable workspace, carbon reduction measures, social infrastructure (eg education, health), transport infrastructure, local employment and training,  affordable workspace, air quality, the complexities of viability review processes. What can we deal with by way of other mechanisms (eg conditions), or standardise? What should be left to other legislation? The financial weight of the obligations in a section 106 agreement in relation to any large scheme is huge – in some ways, it is no surprise that the agreement may take as long or longer to negotiate than it took for the application to get from validation to committee resolution, but what can we simplify, speed up, twin-track?

The Planning Inspectorate also has its Planning obligations: good practice advice  (updated 5 February 2025), which is more specific than the government’s planning practice guidance and has its more prescriptive timing requirements (completed planning obligation at the time the written representations appeal is lodged is a tough one…). This is the sort of thing (with suitable adjustments) we need for the application stage, with real consequences for those who do not follow it.

Going back to the HBF work, several suggestions for improvements were made, various of them overlapping with what I have been saying:

  • “Increase resourcing for planning departments: Local planning authorities are currently under significant resource constraints, which affect their capacity to process planning obligations in a timely manner. To alleviate these challenges, government should allocate targeted funding to increase staffing levels within planning departments. By investing in dedicated S106 teams and offering professional development opportunities, councils can improve both the speed and quality of agreement processes.
  • Develop national standard templates and best practices: A lack of standardisation in the drafting of S106 agreements often leads to protracted negotiations and inconsistencies across councils. The government, in collaboration with planning authorities and the development sector, should produce standardised procedural guidelines and clauses to minimise the need to draft agreements from scratch. In lieu of official standardisation, there could be clearer guidance and expectations on good practice.
  • Encourage a more flexible use of cascade agreements where necessary to ensure homes can be built and give reassurance to the developer that if an RP cannot be found, that the Affordable Homes can be changed to an alternative tenure or as last resort, a payment made to the LPA in lieu of the Affordable Housing.
  • Introduce statutory timelines for S106 agreements: Consideration should be given to implementing statutory or guideline-based timescales into the application and pre-application process for handling Section 106 negotiations and the drafting and signing of agreements.
  • Monitor, benchmark, and report performance: Introducing monitoring and reporting of S106 performance metrics could drive improvements. Local authorities should publish data on average timescales, agreement outcomes, and compliance rates as part of the general reporting on S106 agreements through Infrastructure Funding Statements. This information could be used to benchmark performance across regions, highlight best practices, and identify areas needing intervention. Increased transparency can also build trust among stakeholders and help developers better plan and budget projects.”

I’m sure this can be cracked, easily. Look what Bridget Rosewell’s recommendations on the planning appeal process achieved. If in a couple of years colleagues are still spending much of their time chasing for progress on draft agreements and having to explain to frustrated clients why there is no progress, I’ll be pointing you back to this blog post.

I know most of us have all grown up with this section 106 run-around – indeed some of us are in fact part of Generation Section 52 – hard-copy travelling drafts sent by post, marked up in a sequential series of colours, by pen – yes it was, despite all that, a faster process than present – but, in the words of the Blow Monkeys from that period:  it doesn’t have to be this way.

Simon Ricketts, 14 June 2025

Personal views, et cetera

Small Changes

I’ve mainly called this blog post “small changes” because that is the name of a beautiful, calming and rather lush album by Michael Kiwanuka released last year. Perhaps your social media timeline needs that sort of cleanse? Mine does regularly.

But I was also thinking of that old David Brailsford British Cycling philosophy about marginal gains (“The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improved it by 1%, you will get a significant increase when you put them all together”) and of the successive incremental changes that the government has been making to the planning system, most recently those measures flagged in the 28 May 2025 MHCLG press release as Government backs SME builders to get Britain building, measures which were the subject of three consultation documents published that day:

All of this follows last Sunday’s Speeding Up Build Out consultation (consultation closing 7 July 2025), which I summarised that day in my blog post Now Build.

It is an interesting, maybe theoretical, question as to whether system changes are better announced and delivered in one go (soaking up all the political heat at once) or in the current lapping waves. It is also interesting to see the political heat rising from different quarters in relation to different elements.

Concern has been expressed from environmental interest groups and a number of firms providing ecological services, as to Part 3 of the Planning and Infrastructure Bill (nature recovery – see my 11 May 2025 blog post Nature Recovery Position where I tentatively suggest a middle ground).

The Speeding Up Build Out announcement then led to an outcry from many in the development world – how dare the government threaten developers with being blacklisted, fined or having land compulsorily acquired if they delayed unreasonably in building out planning permissions etc etc? I explain in my 25 May 2025 Now Build piece why I don’t think that should be a real concern and why, if only for pragmatic political reasons, the government has to have basic protections along these lines in place. But that was based on me focusing on the working paper and consultation document, not on the government’s PR spin, which I think was unnecessarily overblown, particularly:

  • That tweet from the prime minister (NB what is the government doing still being on X in any event? Full marks to Matthew Pennycook and others for using Bluesky).

All that developer-demonisation (“Developers who repeatedly fail to build out or use planning permissions to trade land speculatively could face new ‘Delayed Homes Penalty’ or be locked out of future permissions by councils”), whereas I’m not sure anyone would disagree with what is actually said in the working paper itself:

“The Competition and Markets Authority (CMA) and others have concluded that most homes in England are not built as fast as they can be constructed, once permission is granted, but only as fast as the developer expects to sell them at local second-hand market prices. This leads to a build out rate for large sites which can take decades to complete. While it is commercially rational for developers to operate in this way, the systemic impact is a lower level of housebuilding than we need. The government is therefore committed to taking firm action to ensure housebuilding rates increase to a level that makes housing more affordable for working people.  

In the public debate on housebuilding rates, 3 related concepts are often confused.

a. Land banks are, for the most part, a normal part of the development system. Developers hold a pipeline of sites at all stages of the planning process, to avoid stop/starts between schemes. In its 2024 study, the CMA found no evidence of current land banks systemically distorting competition between housebuilders. We do, however, have concerns that certain types of contracts over land prior to its entry into the planning system (which can be part of ‘strategic’ land banks) can be a barrier to entry for SME developers. We are therefore legislating to make Contractual Control Agreements (‘option agreements’) more transparent, to help diversify the industry and reduce barriers to entry for SME builders. 

b. Delayed or stuck sites are those at all stages of the planning and building process (including with full planning permission) that are delayed, not building out, or only building out very slowly due to a problem that the developer or landowner is struggling to resolve themselves. Often this is due to the discharge of a planning condition, an issue raised by a statutory consultee, a newly discovered site issue, or the developer running into financial difficulties. We have created the New Homes Accelerator to tackle this sort of blockage … and get stuck sites moving. In wider cases, sites may be stuck in negotiations over suitable S106 contributions, sometimes because the promoter has overpaid for the land not fully factoring in the policy requirements set out in planning policy. In this paper we consider further reforms to the Compulsory Purchase Order (CPO) process, relevant to stalled sites. 

c. Slow build out is where sites have full planning permission, are being built, but the pace of building is slower than it could be under different development models and incentives. Multiple market studies have found that most large housing sites are built at the pace the homes can be sold at current second-hand market prices, rather than the pace at which they could be constructed if pre-sold (i.e. to an institutional landlord). The rate of building consistent with selling at local second-hand market prices is known within the industry as the ‘absorption rate’. The Letwin Review concluded that local absorption rates were a “binding constraint” on build out rates. The CMA observed, that “the private market will not, on its own initiative, produce sufficient housing to meet overall housing need, even if it is highly competitive”.

So that was the furore earlier this week. And then when Wednesday’s announcements were made, environmentalists focused on the potential rolling back of the statutory BNG regime from smaller projects and opposition politicians turned on the (not new, but in my view improved) proposals to ensure that more applications are determined through use of planning officers’ delegated powers rather than Planning Committee.

You can’t please all the people all the time…

What is the thrust of the latest changes?

The starting point is to change the current categorisation of planning applications for residential development from those for “minor” development” and those for “major” development, so as to introduce a “medium” development category.

The categories would be:

  • Minor Residential Development – fewer than 10 homes /up to 0.5 ha (and within that a sub-category of 1b. Very small sites – under 0.1ha)
  • Medium Residential Development – between 10-49 homes/up to 1.0 ha
  • Major Residential Development – 50+ homes / 1+ hectare

In due course, consideration would be given to appropriate categories for non-residential development.

The following would apply to each category:

Minor

  • streamlining requirements on Biodiversity Net Gain (BNG) including the option of a full exemption
  • retaining the position that affordable housing contributions are not required on minor development
  • retaining the position that sites of fewer than 10 units are exempt from paying the proposed Building Safety Levy (BSL)
  • retaining the shorter statutory timeframe for determining minor development at 8 weeks “however we will take steps to improve and monitor performance so SMEs can expect a better service”
  • reducing validation requirements “through setting clearer expectations in national policy on what is reasonable, which could form part of the forthcoming consultation on national policies for development management”
  • requiring that all schemes of this size are delegated to officers and not put to planning committees as part of the National Scheme of Delegation.
  • reviewing requirements for schemes of this size for consultation with statutory consultees “instead making use of proportionate guidance on relevant areas. This forms part of our review of statutory consultees”

On the “very small sites” sub-category:

“The government will consult on a new rules-based approach to planning policy later this year through a set of national policies for development management. This will include setting out how the government intends to take forward relevant aspects of the proposals contained in the previous ‘Brownfield Passport’ working paper.”

“The government is therefore proposing to further support the delivery of very small sites through:

  • providing template design codes that can be used locally for different site size threshold and typologies – which will take a rules-based approach to design to help identify opportunities and enable faster application processes
  • using digital tools to support site finding and checking compliance of design requirements on specific sites.”

Medium

  • simplifying BNG requirements “reducing administrative and financial burdens for SME developers and making it easier for them to deliver BNG to help restore nature on medium sites by consulting on applying a revised simplified metric for medium sites. Further details are set out Defra’s consultation on potential BNG changes offering stakeholders the opportunity to give their views on this issue.”
  • exploring exempting these sites from the proposed Building Safety Levy “we intend to lay regulations for the Building Safety Levy in Parliament this year (as set out in our response to our technical consultation) and the Levy will come into effect in Autumn 2026. As part of this working paper, we are keen to explore whether, if introduced, medium sites should also be exempt from paying the Levy”
  • exempting from build out transparency proposals
  • maintaining a 13-week statutory time period for determination “in line with major development – but specifically tracking performance of these types of developments directly so SMEs can expect a better service”
  • including the delegation of some of these developments to officers as part of the National Scheme of Delegation
  • ensuring referrals to statutory consultees are proportionate “and rely on general guidance which is readily available on-line wherever possible. This forms part of our review of statutory consultees”.
  • uplifting the Permission in Principle threshold “allowing a landowner or developer to test for the principle of development for medium residential development on a particular site without the burden of preparing an application for planning permission. We recognise take up of Permission in Principle by application for minor residential development has been relatively limited since its introduction in 2017, and we would therefore like to gauge the appetite for this reform before exploring further”
  • minimising validation and statutory information requirements “through setting clearer expectations in national policy which could form part of the forthcoming consultation on national policies for development management”

There is also an important reference to streamlining section 106 agreement negotiations:

“We … welcome views and evidence on:

1. the specific barriers facing SMEs in agreeing s.106 obligations – including availability of willing and suitable Registered Providers

2. what role national government should play in improving the process – including the merits of a standardised s.106 template for medium sites

3. how the rules relating to suitable off-site provision and/or appropriate financial payment on sites below the medium site threshold might be reformed to more effectively support affordable housing delivery, where there is sufficient evidence that onsite delivery will not take place within a suitable timeframe and noting the government’s views that commuted sums should be a last resort given they push affordable housing delivery timescales into the future.”

(I will be doing a separate blog post on that one).

Major

“This working paper primarily considers targeted changes and easements to sites below 50 homes. Sites above 50 will benefit from overall government reforms to the planning system – including those set out in the revised National Planning Policy Framework published in December, the Planning and Infrastructure Bill, and future reforms to statutory consultees and through emerging national policies for development management.

Nevertheless – the government is interested in views in response to this working paper on:

  • applying a threshold for mixed tenure requirements on larger sites – as set out in the government’s working paper on speeding up build out, we are considering a range of options to set a threshold whereby mixed tenure development should apply – including at 500 units. We welcome further views on the right threshold – and on whether and how there should be some discretion for Local Planning Authorities – ahead of consulting on the policy as part of a consultation on national policies for development management and a revised National Planning Policy Framework later this year.”

Turning to the paper on reforming planning committees, thankfully the thinking has moved away from taking into account whether or not a proposal is in compliance with the development plan (which would have led to endless arguments and disputes). Instead, the proposal is that a scheme of delegation would be introduced which would have two tiers:

“Tier A which would include types of applications which must be delegated to officers in all cases; and

Tier B which would include types of applications which must be delegated to officers unless the Chief Planner and Chair of Committee agree it should go to Committee based on a gateway test.”

“We propose the following types of applications would be in Tier A. This is in recognition that they are either about technical matters beyond the principle of the development or about minor developments which are best handled by professional planning officers:

  • applications for planning permission for:
    • Householder development
    • Minor commercial development
    • Minor residential development
  • applications for reserved matter approvals
  • applications for s96A non-material amendments to planning permissions
  • applications for the approval of conditions
  • applications for approval of the BNG Plan
  • applications for approval of prior approval (for permitted development rights)
  • applications for Lawful Development Certificates
  • applications for a Certificate of Appropriate Alternative Development”

Note: “we are keen for views whether there are certain circumstances where medium residential developments could be included in Tier A. For instance, given the scale and nature of residential development in large conurbations such as London, we could specify medium residential development in these conurbations should be included in Tier A (as well as minor residential development), while in other areas, only minor residential development would fall within Tier A.”

Tier B:

There is also a proposal to limit the number of members of a planning committee to 11 and to introduce a national training certification scheme for planning committee members.

I will do a separate blog post on the BNG changes at some point but in the meantime Annex A to the DEFRA consultation paper is a good summary of the various proposals.

I think that’s enough for now…

Simon Ricketts, 31 May 2025

Personal views, et cetera

“Small changes
Solve the problems
We were revolving in your eyes
Wait for me
All this time, we
Knew there was something in the air“

(c) M Kiwanuka

Extract from album sleeve

All Tomorrow’s (Section 106) Parties

This post was prompted by the recent High Court judgment in Link Park Heathrow LLP v Secretary of State (Waksman J, 10 May 2023).

If I had a penny for every time I’ve been asked whether all those with a legal interest in the development site need to be a party to a section 106 agreement or unilateral undertaking…

In fact, my usual going rate is more than a penny. But have this for free:

Let’s start with the statutory power. Section 106 (1) of the Town and Country Planning Act 1990 provides as follows:

“Any person interested in land in the area of a local planning authority may, by agreement or otherwise, enter into an obligation (referred to in this section and section 106A as “a planning obligation”), enforceable to the extent mentioned in subsection (3)—

(a) restricting the development or use of the land in any specified way;

(b) requiring specified operations or activities to be carried out in, on, under or over the land;

(c) requiring the land to be used in any specified way; or

(d) requiring a sum or sums to be paid to the authority (or, in a case where section 2E applies, to the Greater London Authority) on a specified date or dates or periodically.”

A planning obligation, which may be documented by way of agreement or unilateral undertaking, is given a particular legal effect (super power, really) by sub-section 106 (3): it isn’t just enforceable against the person entering into the obligation but also against any person deriving title from that person. And sub-section (4) makes it clear that the agreement or undertaking may provide that a person shall not be bound by the obligation in respect of any period during which he no longer has an interest in the land.

The purpose of a planning obligation is to secure any legally binding commitments that can’t be secured by way of planning condition and which are necessary to make the proposed development acceptable in planning terms.

It makes sense that the local planning authority’s solicitor needs to make sure that the planning obligation binds, as parties, all those with interests in the land which it is necessary to have on the hook, such that there can be no risk that anyone else with an interest in the land can carry out the development, or any part of it, free from any planning obligations which would need to be complied with in order for the development, or that part of it at least, to be acceptable in planning terms.

There is no blanket rule that all those with an interest in the land need to be a party to the planning obligation. Of course that is tidiest. But often it will be the case that a meaningful part of the development can’t be carried out by an individual landowner of part of the site in a way that would be problematic even if that owner were not a party to the agreement or undertaking and if it will not be straight-forward to have that landowner agree to be a party, some thinking needs to be done.. What can be built pursuant to the approved plans on the relevant parcel? Is there any other reason why there is in fact no risk of the mitigation not being provided pursuant to the section 106 agreement or undertaking as intended?

There’s a useful case, R (McLaren) v Woking Borough Council [2021] EWHC 698, which strangely isn’t online but, having checked the rules as to hierarchy of case citation, I feel comfortable relying on Killian Garvey’s LinkedIn feed as the most authoritative report of it (you’re right up there with the All England Reports in my world Killian):

“In McLaren a landowner brought a legal challenge against the grant of planning permission, essentially on the basis that they owned 50% of the site that permission had been granted for and they had not signed the section 106 agreement. The High Court held that there was no error of law in this.

The critical part of the judgment is as follows:

21. In my view, this ground does not raise an arguable legal or public law error. The s.106 agreement follows the requirements of s.106 of the Town and Country Planning Act 1990 . It is in the form of a deed. It identifies, by the definitions referred to, the land in which the person entering the obligation, i.e. New Central, is interested, and the interest which the person entering into the obligation has. It will be recalled that recital 2 of the agreement stated that New Central was the owner of the land with title absolute at HM Land Registry under the number I have referred to and shown hatched blue on the plan. Despite infelicities in the drafting of cl.2, which I have quoted, interpreted in context it expresses the intention of the owner, New Central, to bind its freehold interest in the land, in other words, approximately one-half of the area of the site, the part which it owns.

22. Further, I cannot see any legal requirement that a s.106 obligation ought to bind all material interests in a planning application site. Those with no interest in land can apply for planning permission in respect of it, as Mr Mohamed conceded, and a local planning authority can grant planning permission on taking material considerations into account. On my reading it was not a pre-condition of the Planning Committee’s decision in 2017 for the claimants to be a party to the s.106 agreement. That is not what the report says in its conclusion, and the passage immediately following, under the heading “Planning Obligation”, which I quoted earlier. The fact is that the obligation binds a sufficient part of the site, namely, that belonging to New Central, to preclude development unless its purposes are met. I would add that the claimants have not been excluded from the agreement; they may unilaterally bind themselves at any time to its obligations if they choose to do so.”

Often, if it would be problematic in planning terms to allow development to proceed without a particular owner being bound by the planning obligations, the authority can impose what is known as an Arsenal-type condition to cover off the position. The mechanism is so named because it was used in relation to the Emirates Stadium development (not because it is in any way second best). Basically, the condition prevents development being carried out unless the remaining landowners first enter into a deed adhering to the obligations in the agreement or undertaking. The Government’s Planning Practice Guidance advises as follows:

“Is it possible to use a condition to require an applicant to enter into a planning obligation or an agreement under other powers?

A positively worded condition which requires the applicant to enter into a planning obligation under section 106 of the Town and Country Planning Act 1990 or an agreement under other powers, is unlikely to pass the test of enforceability.

A negatively worded condition limiting the development that can take place until a planning obligation or other agreement has been entered into is unlikely to be appropriate in the majority of cases. Ensuring that any planning obligation or other agreement is entered into prior to granting planning permission is the best way to deliver sufficient certainty for all parties about what is being agreed. It encourages the parties to finalise the planning obligation or other agreement in a timely manner and is important in the interests of maintaining transparency.

However, in exceptional circumstances a negatively worded condition requiring a planning obligation or other agreement to be entered into before certain development can commence may be appropriate, where there is clear evidence that the delivery of the development would otherwise be at serious risk (this may apply in the case of particularly complex development schemes). In such cases the 6 tests should also be met.

[…]

Paragraph: 010 Reference ID: 21a-010-20190723”

This makes sense. Otherwise how would planning permission ever be possible in advance, for instance, of compulsory purchase that may be needed to unlock the development, or of vacant possession being secured?

I don’t know what other people’s experience is, but I am finding inspectors frequently to be taking a hard line and you may not find this out until it is too late – when the decision letter is issued.

Perhaps the word “normally” is being overlooked in the Planning Inspectorate’s Planning Obligations: Good Practice Advice, which states:

“Normally all persons with an interest in land affected by a planning obligation – including freeholders, leaseholders, holders of any estate contracts and any mortgagees – must sign the obligation.”

Which brings us to Link Park Heathrow LLP v Secretary of State (Waksman J, 10 May 2023) (Town Legal acting for the claimant, instructing Rupert Warren KC)). This related to a proposal for a large data centre. There were a number of occupational tenants on the site which were not made party to the necessary section 106 unilateral undertakings.

In my view there was a perfectly respectable case for saying that the tenants did not need to be made party to the planning obligations in any event: the freeholder was bound and in any event none of the tenants could in practice carry out any meaningful element of the proposed data centre development on the area of the site demised to them. But that’s by the bye because the appellant and the two relevant local planning authorities had agreed a proposed Arsenal-type condition which was in this form:

“No work shall be carried out under this planning permission in the area shown hatched purple on the plan…

a) until either all parties with any interest in the area shown hatched purple have entered into a s.106 unilateral undertaking on the same terms on which this permission is granted or

b) such interests have come to an end and evidence of it having come to an end has been provided to the Council.

Reason: The planning permission has been granted subject to a s.106 unilateral undertaking and at the time of this permission being issued the applicant is not able to bind all relevant parties and interests in the site to the terms of the planning obligations that it contains.”

The appeal was by way of a hearing, which of course has its own limitations in terms of the opportunity for detailed debate on these matters. The Inspector dismissed the appeal and his decision letter contained the following conclusions as to whether it was sufficiently certain that the mitigation provided for in the unilateral undertakings would be delivered:

“51. The evidence before me was indicative that the area under jurisdiction of Buckinghamshire experiences residents migrating to other areas to undertake their employment. To mitigate this, the Council seeks the provision of employment and training opportunities on new developments in their area.

52. A planning obligation should run with the affected land. This means that should the land be transferred to a different owner the obligations within the agreement would be enforceable against the future owners. Therefore, a legal agreement should be signed by all parties with an interest in the land. The undertakings that have been submitted as part of the appeal proceedings have been signed by the landowner and the mortgagee, however, they have not been signed by leaseholders that occupy parts of the site. This means that not all of those who have an interest in the land are parties to the undertakings.

53. Therefore, in the event of these unilateral undertakings being breached, the Council cannot take enforcement action against the leaseholders. In consequence, I do not believe that the submitted unilateral undertakings provide me with sufficient certainty that the required mitigation would be provided.

54. I note that the unilateral undertakings have clauses that require that any leaseholds be surrendered prior to development commencing and that a planning condition could be imposed that would ensure that prior to development commencing the leasehold land was bound a legal agreement consistent with the submitted unilateral undertakings.

55. However, layout of the Development has been reserved for future consideration, therefore, at this juncture there is a possibility the land that is covered by the current leases might be the first to be developed. In consequence, if there is not an agreement in place at this point the respective councils would not be able to take enforcement actions against such a breach. Therefore, I must conclude the Development would not provide the required mitigation.

56. The appellant suggested this approach had been taken previously on another site outside the jurisdiction of the Councils involved in this appeal. I do not have full information regarding the planning circumstances of this, which means I can only give this matter a limited amount of weight. Nonetheless, I do not believe the circumstances of the appeal scheme, particularly given my previous conclusions, warrant diverging from the approach of having all the interested parties signing the unilateral undertaking.”

Where in the above is any consideration as to whether the proposed Arsenal-type condition agreed between the parties provided an appropriate solution? This was one of three separate grounds on which the court quashed the decision:

“As [the claimant] contends, either the Inspector misunderstood the effect of this condition, which was an error of law, or if he did understand it he did not take it into account in reaching his conclusion, which was that he was not prepared to remedy the problem of the unenforceable Undertaking before him while it was a material consideration in that regard. Either way, this rendered his decision unlawful.”

I don’t know if others have experienced equivalent reluctance on the part of inspectors to accept Arsenal-type conditions? This was also an issue at the planning appeal stage in Satnam Millennium Limited v Secretary of State (Sir Duncan Ouseley, 8 October 2019) (Town Legal acting for the claimant, instructing Christopher Lockhart-Mummery KC and Heather Sargent) but the decision was quashed on other grounds.

We were also recently acting on a case where the appellant was an overseas company but, before our involvement, had not volunteered to the inspector a foreign lawyer’s opinion to confirm that the relevant unilateral undertaking had been validly executed (the point hadn’t been raised by the local planning authority). This was the only ground on which the appeal was dismissed. The Government Legal Department consented to judgment and the appeal is now being re-determined.

Many banana skins out there, for applicants/appellants and decision-makers alike.

Simon Ricketts, 9 June 2023

Personal views, et cetera

Image courtesy of Andy Warhol via Billboard

Can You Use Section 106 To Buy Drugs (And To Fund Other Public Services)?

It is frustrating to see public bodies, stymied by the lack of other funding sources, challenge the grant of planning permissions by way of judicial review in a bid for financial contributions from the developer. Frustrating because at root these are services which should properly be funded by the taxpayer; frustrating because the public body invariably loses, having spent public money in the litigation and exposed itself to the award of costs; frustrating because the challenge invariably slows down delivery of the development for which planning permission has been granted.

We’ve seen it with the police (e.g. R (The Police and Crime Commissioner for Leicestershire) v Blaby District Council (Foskett J, 27 April 2014) (a case which largely concerned the timing of contributions towards for instance additional police cars and radio transmitters)); with adjoining local authorities concerned to have their share of affordable housing (e.g. R (Luton Borough Council v Central Bedfordshire Council (Court of Appeal, 20 May 2015), and, above all, we have course seen it with NHS Trusts.

The issue as to the extent to which it is appropriate for financial contributions to be secured by way of section 106 agreement towards the delivery of health services has been rumbling on for years – see for instance the 20 August 2020 piece What the health? The planning system and healthcare service funding by Lichfields’ Myles Wild-Smith. Myles refers to recovered appeal decisions where the agreed section 106 provisions included a financial contribution towards the provision by the local Foundation Trust of acute and community health facilities and the encouragement that this has given NHS bodies over time to take this approach. The root of the issue for NHS Trusts is what can only be described as a flaw in the Government’s current funding mechanism which does not necessarily take into account the costs of provision of additional services to cater for an increase in population in the first year that population numbers are increased, leading to a “funding gap”.

The issue has now come before the Planning Court in the landmark case of R (University Hospitals of Leicester NHS Trust) v Harborough District Council (Holgate J, 13 February 2023) – “landmark” partly because four of the six barristers involved are from Landmark Chambers but more perhaps because Holgate J does not just dismiss the claim by the claimant NHS Trust on the facts but goes on to consider the wider principles engaged.

From here on in, I am largely going to be shadowing Nicola Gooch’s blog post Mind the Funding Gap: The curious case of s.106 contributions funding NHS services. If you’ve already read that, feel free to skip ahead. If you haven’t…

In basic summary, Harborough District Council granted planning permission for an urban extension to Lutterworth, comprising up to 2,750 dwellings and associated development. The University Hospitals of Leicester NHS Trust did not object to the development in principle but  had been seeking that the council secure a contribution, via the section 106 agreement which was being negotiated, “of about £914,000 towards the delivery of health care by the Trust to mitigate what are said to be the harmful effects of additional demands upon its services from that proportion of the people moving to the site who would be new to the Trust’s area (referred to as “new residents”). The Trust estimates that the 2,750 houses on the site would accommodate 7,520 people, of whom 38.5%, or 2,896 people, would be new residents in the Trust’s area.”. The council considered the request and did not accept that it was justified (I don’t know but, aside from concerns as to whether such a contribution was legally appropriate and justified in planning terms, there may have been an underlying issue, frequently present: against the constraints of project viability,  requiring such a contribution may have entailed less potential funding for affordable housing or other priority requirements of the council or county council).

Paragraphs 8 to 12 of the judgment describe the so-called “funding gap” (and this is the aspect of the judgment I am focusing on – the judgment also addresses, and rejects, some related grounds of challenge). The purpose of the contribution sought was to provide “funding for additional staff, drugs, materials and equipment” during the relevant part of the first financial year in which a “new resident” begins to occupy a dwelling.

Paragraphs 22 to 29 of the judgment set out the legal principles in relation to material considerations and section 106 agreement.

The council didn’t accept that the case for the “funding gap” had been made out. Holgate J agreed with the council that this was indeed a relevant consideration and that the council had reached a rational conclusion that the Trust had failed to provide any sufficient information to show that there was any “funding gap” and accordingly the contribution sought would have failed the “necessity” test in regulation 122 of the CIL Regulations.

After Holgate J gives what he describes as the “short answer”, he then goes on to consider “wider issues”.

“141 The question therefore arises how could an applicant for planning permission for a new development be required lawfully by a system of land use planning control to contribute to the funding of treatment within the NHS? It is well established that planning permission cannot be bought and sold, for example, by making a payment for community purposes unrelated to the development authorised. Furthermore, planning legislation does not confer any general power to raise revenue for public purposes (see e.g. Attorney General v Wilts United Dairies Limited (1921) 37 TLR 884; (1922) 38 TLR 781; McCarthy & Stone (Developments) Limited v Richmond London Borough Council [1992] 2 AC 48).

142. Ordinarily a resident of the development at East Lutterworth who had moved to the Trust’s area would previously have been the responsibility of a CCG elsewhere in the country. So it has not been suggested that the development would increase the burden on the NHS in England as a whole. The attempt by the Trust to obtain a financial contribution under s.106 therefore depends upon their demonstrating a localised harm. The only harm they seek to rely upon concerns the provision by the Trust of services commissioned by the CCGs. On the Trust’s own case, that has to depend upon them showing a funding gap in relation to treatments for residents new to the area during their first year. The Trust accepts that there is no justification for any payment relating to other “first year” residents who are simply moving home within the Trust’s area, or to any resident after their first year at East Lutterworth. The extent to which funding is available to the Trust for the services it provides to the CCGs is the only possible justification for drawing these distinctions. Whether a funding gap genuinely exists was critical to the Trust’s request for a financial contribution under s.106.

143. Accordingly, HDC was fully entitled to ask questions and to seek information in order to see whether there is a real funding gap for treatment by the Trust of “new” residents in their first year of occupation. Indeed, if the local planning authority had agreed to require the developer to pay the contribution sought by the Trust before granting planning permission without being adequately satisfied that there was a relevant funding gap, it would have been open to criticism. In the event of the issue having to be determined in a planning appeal, HDC would have been at risk of being ordered to pay costs for unreasonable conduct.”

“147. But what if in a future case a NHS trust could demonstrate that it would suffer a funding gap in relation to its treatment of new residents of a development during the first year of occupation? On one level it would be a matter for the judgment of the local planning authority as to whether the three tests in reg.122(2) of the CIL Regulations 2010 are satisfied and whether it would be appropriate to require a financial contribution to be made, after taking into account other requirements and any impact on the viability of the scheme. But all that assumes that there is no legal (or other) objection to a contribution of the kind sought in the present case. The argument in this case does not enable the court to decide that issue as a legal question. This judgment should not be read as deciding that there would be no legal objection.

148. Where a housing development is carried out, some of the new residents may be entitled to social welfare benefits, which, like the need for secondary healthcare, arises irrespective of where that person lives. Of course, no one would suggest that the developer should make a contribution to funding those benefits.

149. The funding of treatment in NHS hospitals would appear to be different in two respects. First, in an area of net in-migration any increase in the need for treatment and staff will be experienced in the relevant local area, not nationally. Second, because the patients would receive treatment even if they had not moved home, a local funding gap would only arise if funding for the relevant NHS trust did not adequately reflect a projected increase in population and/or the national funding system did not adequately provide for a timely redistribution of resources. Population projections will involve some areas of out-migration as well as areas of net in-migration. It is therefore significant that CCG funding across the country takes into account ONS population projections. Accordingly, in the distribution of national funds there may be increases or decreases in funding for individual CCGs by reference to size of population.

150. It seems to me that two points follow. First, even if it could be shown in a particular area that there is a funding gap to deal with “new” residents, HDC was entitled to raise the possibility that this is a systemic problem in the way national funding is distributed. Although the Trust criticised HDC for taking it upon themselves to raise this point, it strikes me as being a perceptive contribution to a proper understanding of the issue. If there really is a systemic problem, this may raise the question in other cases whether it is appropriate to require individual development sites across the country to make s.106 contributions to address that problem.  However, for the purposes of dealing with the present challenge, HDC’s decision rested on the Trust’s failure to show that there was a funding gap in this case, not any systemic issue.

151. Second, whether there is a lack of funding for a Trust to cope with the effects of a substantial new development is likely to depend not on those effects in isolation, but on wider issues raised by the population projections used as one of the inputs to determine funding for CCGs. The interesting arguments from counsel in this case suggest that these issues merit further consideration as a matter of policy outside the courts and even outside the planning appeal system.”

Some significant points to reflect on arising from the passages above:

  • Even if a “funding gap” by a provider of public services is demonstrated, not only does the decision maker still need to determine whether a contribution is justified “whether the three tests in reg.122(2) of the CIL Regulations 2010 are satisfied and whether it would be appropriate to require a financial contribution to be made, after taking into account other requirements and any impact on the viability of the scheme” but it should not be taken for granted that there will not be a legal objection to the making of the contribution.
  • If the underlying issue which led to the case is a “systemic problem in the way national funding is distributed… this may raise the question in other cases whether it is appropriate to require individual development sites across the country to make s.106 contributions to address that problem”.
  • There may well be problems with population projections used as one of the inputs to determine funding for clinical commissioning groups.

I would suggest that all three points require serious reflection both by the Department of Health and Social Care and by DLUHC

In the meantime, for the rest of us, the judgment is a reminder of the careful scrutiny that needs to be given to proposed planning obligations, so as to ensure that they meet the necessary legal tests. In a climate where there is often insufficient Government funding to pay for public services (and/or inadequate methodologies for determining the funding that is needed – as seems to be the case with health funding) , these issues are continually going to arise. Local residents have a right to expect that new development does not lead to unacceptable burdens on local services, but there are legitimate limits on the costs which can be borne by development. After all, the needs of new residents in a development were previously being met, and funded, elsewhere. Our planning system is increasingly an indirect tax collection system – and I fear that the impending Infrastructure Levy regime will only make matters even worse.

Discuss…

Simon Ricketts, 18 February 2023

Personal views, et cetera

Photo courtesy of Christina Victoria Craft via Unsplash

Stonewater – Paper – Scissors

We all had a good, evidence-based, moan about CIL on clubhouse last week.

Stonewater (2) Limited v Wealden District Council (Thornton J, 15 October 2021) is of course only the latest example of the complexities and uncertainties that arise – in particular on the question of application of reliefs and exemptions (the importance and number of which has been driven by the fact that CIL liability is in most cases so significant) but also on the question of how to mesh the operation of the CIL regime with the operation of the planning system without jamming the whole thing up.

There are plenty of good summaries and critiques of the judgment by now (for instance this Town Library summary by my colleague Safiyah Islam, or this 18 October 2021 blog post by Nicola Gooch, CIL, S.106 Agreements & Affordable Housing Relief: What happens when the housing crisis hits political reality).

This is my take:

Land with planning permission for 169 houses was acquired by Stonewater, a registered provider of affordable housing. The section 106 agreement provided for 59 dwellings within the development to be affordable housing, with a specified tenure mix. The number of affordable housing units was to “comprise 35% of the Dwellings within the Phase (which shall be rounded up to the nearest whole unit”.

Stonewater’s model was more enlightened than that of the developer which had secured the permission. Stonewater “regularly acquires sites which are subject to a section 106 agreement which secure a low or policy compliant level (35%) of affordable housing, with a view to increasing affordable housing delivery to 100%. The Court was told that this is not unusual, and the Claimant is not alone in doing so. Grants from Homes England are based on the principle that registered social housing providers provide additional affordable housing over and above the levels secured in planning obligations.”

Relief from CIL is available for affordable housing via social housing relief. There are criteria set out in regulation 49 of the CIL Regulations which do not include any requirement that the affordable housing is secured by way of section 106 agreement or condition. After all, if there is a clawback period of seven years within which CIL has to be paid with interest if the occupation no longer meets the criteria for relief.

Unsurprisingly, Stonewater sought social housing relief for the whole development, given that it proposed to deliver it all as affordable housing meeting the criteria in regulation 49. The council refused relief on the basis that a varied section 106 agreement would first be required, committing in the agreement for all the dwellings to be delivered as affordable housing. The council later additionally argued that the existing section 106 agreement was to be interpreted as rendering it unlawful for more than 35% of the dwellings to be delivered as affordable housing.

It might be asked why Stonewater didn’t simply enter into the section 106 agreement required – but of course that would have been likely to destroy its entitlement to Homes England funding given that on the face of it there would then be no additionality, and why should it enter into a further agreement if that was not required by the Regulations? Stonewater challenged the council’s decision by way of judicial review. The first issue melted away once the Secretary of State was joined as an interested party and the council conceded that a section 106 agreement obligation that a dwelling be delivered as affordable housing is not a prerequisite to a claim for social housing relief (although it can be useful evidence that the dwellings will be used in a way that meets the criteria for relief) – as did any notion that the relief is discretionary on the part of the authority rather than mandatory. So the only question was whether delivery of more than 35% of the homes would be in breach of the section 106 agreement.

The judge saw the 35% requirement as fixed, not a minimum:

“In my assessment, the language of the document points to an interpretation that the agreement controls the amount of affordable housing that can come forward, by fixing a specific requirement of 59 dwellings or 35% affordable housing. Paragraph 2(iii) of Schedule 1 says that precisely 35% of the units in any phase must be affordable. Accordingly, if the development proceeds in multiple phases, there must be 35% in each phase and thus, inevitably, as a matter of maths, 35% in aggregate. This specific requirement permeates the definitions, which draw a clear distinction between the ‘Affordable Housing Units’ which are “the 59 Dwellings … which shall be for use as affordable housing” and ‘the Private Dwelling Units’ which means everything other than the 59 Dwellings. Paragraph 3 of Schedule 1 provides the mechanism whereby the Council can exercise control in all cases (not just multiple phases) over the provision of affordable housing. The, broadly defined, Affordable Housing Scheme must be submitted for approval and development may not commence until the Council has approved it.

Accordingly, a scheme which provides less, or more units, of affordable housing would not comply with the section 106 requirement to provide 59 units and hence would be contrary to its terms and to that extent unlawful, albeit the Council would have a discretion to vary the Section 106 agreement or enter into a new agreement.”

I must say I find this a strained interpretation. As the claimant pointed out, there would be no reason in policy to restrict the amount of affordable housing in the scheme – why should the developer not be free to dispose of any of the dwellings at less than market value? Indeed, although not I think mentioned in the judgment, how would such a restriction meet the test in regulation 122? Would an authority really succeed in arguing that a developer was in breach of its section 106 agreement if it disposed of market units at less than market value? Of course not.

The judge asserted that “whilst affordable housing is generally desirable in policy terms, it does not follow that more affordable housing is always desirable without limit. There may be proper planning reasons to prefer a mixed scheme. For example, in this case, the Court’s attention was drawn to extracts from the Planning Officer’s report which suggest the expected CIL receipts from a scheme with 35% affordable housing were relevant to the decision making. The highways authority had expressed concern about the potentially severe impact from the development on the local highway network and considered mitigation was required. It was common ground that the necessary mitigation was to be funded by the CIL receipts from the development. However, it is neither necessary nor appropriate for this court to evaluate any preference for a mixed scheme on the facts of this case. It is sufficient to say that it is in accord with the statutory planning context, and / or “common sense”, to have a section 106 agreement which retains control over the provision of affordable housing. This does not defeat the achievement of more affordable housing since the Council, in the exercise of its planning judgment, may vary the Section 106 to permit this, if persuaded of its desirability.” However, how does this sit with the council’s position that it would grant the relief simply if Stonewater entered into a section 106 agreement varying the previous arrangements and requiring all the dwellings to be affordable?

Surely, instead, this was an overly prescriptive reading of the Regulations on the part of the authority and a strained interpretation of the section 106 agreement on the part of the judge? It is truly depressing to think about how long commencement of development is held up on schemes until disputes such as this are resolved – and how so much money has been wasted on all sides.

Simon Ricketts, 13 November 2021

Personal views et cetera

This week’s Planning Law Unplanned delicacies on clubhouse, at 6pm on Tuesday 16 November, will be Sage and Tulip. We’ll be hearing from Kate Olley, who appeared for Mr Sage in the recent High Court case on the important and topical question as to when planning permission is needed to run a business from home, and we’ll be discussing the Secretary of State’s refusal of planning permission for the Tulip in the City of London. Aside from Kate, our guests include arch-planorak, barrister Zack Simons. Thoughts on the decisions? Then join us, to listen or participate. Link to app here.

Courtesy wikipedia

How Long Has This Been Going On?

Time is money. Time is unmet needs. Time is unrealised public benefits.

I just wanted to capture some of the current, frankly depressing, data that is out there on application and appeal timescales.

The purpose of this post is to underline that there is a significant problem to be addressed. What to do about it will be for another post – there is certainly much that can be done that does not require (1) legislation (2) additional resources or (3) any procedural shortcuts.

Applications

A piece from yesterday’s Planning daily online: Council signs off 2,380-home urban extension almost four years after committee approval (£). Four years is certainly going it some but I can confirm from constant first-hand experience how difficult it can be to move a project from resolution to grant to permission at any speed. The larger or more complex the project, the longer those negotiations over the section 106 agreement and associated aspects can end up taking.

My colleague Lida Nguyen has been looking at the position in London. She has looked at all applications for planning permission which were referred to the Mayor between 3 January and 11 December 2020, so applications of potential strategic importance as defined in the Mayor of London Order 2008 and, for those which were then approved by the relevant borough (without intervention by the Mayor or secretary of State), she has looked at the average time that the application took from validation to the borough’s resolution to approve and from the borough’s resolution to approve to permission being issued. Discarding a few anomalous cases, this left 88 to be analysed.

In my humble view the statistics are appalling, but not surprising:

Application submission to resolution to approve

Median: 228.5 days

Mean: 269 days

Resolution to approve to grant of permission

Median: 218.5 days

Mean: 259 days

It’s rather deflating for applicants and (when you stand back from the detail) surely absurd that resolution to grant in reality only marks the halfway point to a permission in relation to significant projects in London. Wouldn’t it be a start for boroughs, the Mayor and those acting for applicants to set a target of halving each of those figures and agreeing the necessary steps to achieve that reduction?

Appeals

My 25 May 2019 blog post Pace Making: Progress At PINS reported on Bridget Rosewell’s recommendation, adopted by the Planning Inspectorate, that inquiry appeals decided by an inspector (i.e. not recovered by the Secretary of State) should be decided within 24 weeks of receipt and that where the Secretary of State is to be the decision-maker, inspectors’ reports should be submitted to the Secretary of State within 30 weeks of receipt of the appeal. Initial progress was really impressive – until the first lockdown struck in March 2020. After a slow start (see my 2 May 2020 blog post There Is No E In Inquiry), PINS of course eventually, to the massive credit of all involved, embraced virtual hearings, inquiries and examinations and the risk of an impossible backlog was averted. However, it is clear from the latest Planning Inspectorate statistical update (19 August 2021) that there is still much work to do:

“The mean average time to make a decision, across all cases in the last 12 months (Aug 20 to Jul 21), was 27 weeks. The median time is 23 weeks.

The median time to decide a case decreased by 0.6 weeks between June and July 21, with the median being 21.4 weeks.

Median timeliness by procedure type is shown in the summary table below.

Performance since April 21 against the median measure has only varied by 0.7 weeks, between 21.4 weeks and 22.1 weeks. Performance had been improving between November 20 and March 21. For inquiries, in the last two months, cases have taken longer to decide as a result of very old enforcement inquiry cases being decided.

Enforcement decisions made in the last 12 months had a median decision time of 34 weeks. Looking at the annual totals, the median and mean time to decision for specialist decisions have been broadly the same as for enforcement decisions, and longer than the median for planning decisions. Since February 21 there has been a change in this trend, with Specialist cases being quicker than Enforcement.

The median time for planning appeals decided by inquiry under the Rosewell Process over the 12 months to July 21 is 35 weeks. This is quicker than other types of casework decided by inquiry.”

Whilst the extent of statistical information provided these days is welcome, it is difficult sometimes to track the figures through the different tables so as to work out what the likely timescale outcome for a prospective appellant will turn out to be. I have also looked in vain within the statistics for any information as the time being taken between appeal receipt and validation – a traditional black hole when it comes to appeal timescales. I’m also struggling to see any breakdown as to what the “Rosewell” inquiries were (35 weeks average) as compared to inquiries overall (79 weeks!).

That overall 27 weeks average is deceptively encouraging for anyone looking at anything other than a written representations appeal. Because those appeals make up 95% of the total of course they massively skew the mean figure. But even then, although not reflected in these statistics, my own anecdotal impression is that validation of appeals which proceed by way of written representations or hearing is very slow indeed, raising a large question mark over the overall statistics. Possibly something to do with the focus on Rosewell inquiry appeal targets. Am I being unfair? What solid information on this is there out there? If there isn’t any, why not??

The Planning Inspectorate Annual Report and Accounts (July 2021) contains further statistical information, with tables such as these looking back at the changing position over the last five years:

In order to meet Rosewell targets, surely on that last table the 90th percentile needs to come down from 66 weeks to 24 weeks – and to be measured from receipt of appeal rather than validation?

Again, as with timescales for major applications in London, with appeal inquiries, surely we are looking at the need to more than halve current timescales?

All tables above have been taken from PINS documentation, for which thanks.

Simon Ricketts, 20 August 2021

Personal views, et cetera

Planning Law Unplanned is having a summer break this week, before returning at 6pm on Tuesday 31 August for somewhat of a BECG/DP9 special, London Elections 2022: Politics Meets Planning. Join the club here for notifications of this and future clubhouse Planning Law Unplanned events.

Photograph by Ben White on Unsplash