Decision

To approve the Council’s submission to the Ministry of Housing, Community and Local Government’s Consultation on Standard Planning Agreements for Medium-Sized Sites.

Reasons for the decision

The Government’s consultation on proposed changes to Standard Planning Agreements for Medium-Sized Sites (covering developments of 10-49 homes) forms two parts, both have potential implications on the way the Local Planning Authority negotiate Section 106 (S106) agreements.
Part 1: The consultation is specifically aimed at standardising s106 agreements for medium-sized sites (10-49 dwellings) to reduce negotiation, increase consistency and speed up decision-making. The Government's intention is that these model agreements become the default approach for relevant applications unless there are strong reasons to depart from them.
Part 2: covers the standardisation of draft affordable housing schedules for full and outline planning permission (questions 49-79). It includes questions around the framing, spending and scope of affordable housing contributions, the proposed discretionary cascade mechanisms (for affordable housing), and processes around the transfer of affordable homes to housing associations, amongst other matters, all of which require considerable negotiation with applicants.
The operational impact would be via Development Management; the consultation itself does not propose changes to plan-making or development plan policy. However, if Government moves towards greater standardisation of planning obligations, this could affect how our development plan policies are implemented and delivered in practice. Given that we are at a key stage of moving to Regulation 19 consultation on the Cheltenham, Gloucester and Tewkesbury Strategic and Local Plan (SLP), should changes as proposed be brought forward, this may impact on the viability and infrastructure assumptions underpinning the SLP.
The Council’s response:
The response submitted broadly supports the principle of simplifying and standardising templates and definitions used by standard Section 106 agreements and Unilateral Undertakings (UU), but is clear that these national templates must strike a balance between reducing negotiation and simplifying decision-making, and ensuring that both planning contributions (especially affordable housing) are robustly protected and necessary details are provided to support transparency and the effective implementation of planning obligations.
This is especially relevant in the context of proposed the discretionary ‘cascade mechanism’ for medium sites (a multi-stage mechanism allowing applicants to provide an affordable housing contribution, if, after reasonable endeavours have been undertaken, no housing association can be found to secure the affordable housing) proposed by the consultation, as applicants on several live applications (including strategic allocations) are seeking the inclusion of cascade mechanisms within Section 106 agreements- despite Government policy in this area remaining unclear.
The Council’s consultation response raises several concerns around the operation of the cascade mechanism and the terms of engagement between applicants and registered providers (RPs) to transfer affordable homes in line with Section 106 requirements.
• The proposed ‘discretionary’ approach to cascade mechanisms is likely to result in lengthy negotiations between applicants and the Council as to whether cascades are justified and necessary. If taken forward, such a mechanism should be robust and allow for transparent, comprehensive engagement between housing associations, local planning authorities, and applicants. The need for consistency between any future standardised mechanisms and established viability review approaches will be required, to avoid inadvertently undermining the basis on which planning obligations were originally agreed.

• In the absence of a suitably robust cascade mechanism, applicants may focus their engagement with housing associations who lack the capacity, desire, or ability to contract on affordable housing to justify progressing to the next stage of the cascade. Moreover, the Council has doubts that adequate engagement can be undertaken (and a deal to transfer the affordable homes to a housing association and/or a local authority partner can be concluded) within the proposed 6 month engagement period, as the Council would envisage that a local authority would be engaged as a separate stage of the cascade, acting as an ‘operator of last resort’ to prevent the loss of on-site affordable homes. Finally, the Council has serious doubts as to whether affordable housing contributions (proposed at the end of the cascade) will ever equate to the monetary value of on-site affordable housing delivery.

• Concerns relating to the scope, framing and repayment timelines of affordable housing contributions are outlined within the Council’s consultation response. Affordable housing contributions should only be agreed in exceptional circumstances, where all other forms of on-site affordable housing have been exhausted. As such, restrictions on the scope of spending these contributions (e.g. to a specific ward, or parish) are both impractical and incompatible with the statutory need to meet housing need and tackle homelessness and rough sleeping at a District level. The Government’s suggested 5-year timeline for spending contributions is contrary to the Government’s objectives around boosting affordable housing delivery and doesn’t account for monies being committed to long-term projects.

• Imposing a 5-year timeline may result in the Council being required to return contributions to developers, or, having to spend monies in a compulsive manner, rather than contributing to addressing the Council’s strategic housing objectives. To support standardisation of calculating contributions, the Council favours calculations that accurately reflect RP offers for affordable housing by tenure, rather than relying upon assumptions, or attempts to pre-emptively calculate contributions. Cheltenham has a strong record of securing and delivering infrastructure and community benefits through developer contributions, ensuring that growth is accompanied by appropriate investment in services, facilities and place-making. Our response does not support any unspent funds being returned to Government. The potential loss or redistribution of those funds could have a material impact at the local level, affecting the Council's ability to mitigate the impacts of development and support sustainable communities.


• Proposals regarding standardising affordable housing mix tables (applying to full applications) lack the necessary detail required from local authorities and housing associations on the agreed affordable housing scheme. Both parties will require details on the house types, sizes, occupancy levels, tenures and accessibility standards of the agreed affordable homes, many of which are absent from the consultation proposal. The limited approach taken by the consultation also deprives members, officers and residents the opportunity to understand and scrutinise agreed affordable housing provision, and, as such, cannot be supported.
Overall, the response reinforces that if further standardisation of planning agreements is implemented, robustly worded agreements will be essential to ensure that on-site delivery is prioritised, as this approach best supports creating mixed and balanced communities and helps to address immediate housing need.

Alternative options considered

Not to submit a response. This option was discounted as considered important the views of Cheltenham Borough Council’s be represented.