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Government-commissioned research highlights slowdown in delivery of Section 106 agreements
Developer contributions agreed through Section 106 agreements are taking longer to be delivered, government-commissioned research has found.
A report published by the Ministry of Housing, Communities and Local Government last week said that evidence points “to a discrepancy between what is agreed and what is delivered in practice”.
More than half – 56% – of local planning authorities surveyed said that only 50% or less of the affordable housing promised by developers in 2016/17 had been delivered by 31 March 2019.
“This is a change from the last iteration of the research and indicates a reduction in the proportion of affordable housing being delivered within a two-year period, suggesting either a slowing delivery of affordable housing or reduction in the proportion that will be delivered,” the report said.
Just 38% of authorities were confident that all affordable housing secured through Section 106 agreements in 2018/19 would be delivered, while 29% said that “some” or “most” would be provided.
Another 33% said it was either too early to say or that they did not know how to answer the question.
For direct payment obligations, 51% reported receiving half or less of the money negotiated two years previously – up from 36% in a similar 2016/17 survey.
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Section 106 agreements see developers agree to deliver or fund affordable housing and public amenities as a requirement for gaining planning permission.
In 2018/19, the mechanism accounted for 49% of all affordable homes completed in England.
Last week, ministers unveiled plans to scrap Section 106 and the Community Infrastructure Levy (CIL) in England and replace them with a new flat-rate Infrastructure Levy system for developer contributions.
The new levy approach will deliver “at least as much – if not more” on-site affordable housing, the government has insisted.
It argued that Section 106 is “complex, protracted and unclear”.
The academic report agreed that delay was a “hallmark” of the system, with “evidence of both avoidable and unavoidable delays”.
Researchers also found that the value of developer contributions secured through Section 106 and CIL in 2018/19 was £7bn, up 16% from £6bn in 2016/17.
Of this, 67% was used for affordable housing, the same proportion as in 2016/17. However, it found that contributions are increasingly being used to fund schools, transport and healthcare facilities.
The report noted a “fundamental shift in what developer contributions are being requested to fund”.
Council policies and practices on developer contributions are “highly inconsistent” across the country, it added, with limited transparency and public engagement.
