Affordable Housing Contributions - A change in the rules... except in Shropshire?

Posted by John Burrowes on Friday, May 29, 2015

At the end of November 2014 the government published the response to a consultation relating to Planning Contributions and Section 106 Planning Obligations in England and Wales. The result of which was to change the requirements of what builders would have to contribute on smaller development sites. However, Shropshire Council have taken a different view.

Response to Consultation and Minister's Statement

The consultation took forward the Government’s 2013 Autumn Statement commitment to consult on a proposed new 10-unit threshold for section 106 affordable housing contributions within national policy to reduce planning costs to developers. The Government considered that such charges can place a disproportionate burden on small scale developers, including those wishing to build their own homes, and prevent the delivery of much needed, small scale housing sites.

 In a Written Ministerial Statement on 28 November 2014, Brandon Lewis MP, Minister of State for Housing and Planning, announced that the Government was making a number of changes to the national Planning Practice Guidance (PPG) with regard to Section 106 planning obligations. These included the introduction of a threshold beneath which affordable housing contributions should not be sought.

After careful consideration of the responses the Government announced changing national policy with regard to section 106 planning obligations. The conclusion reached was that "due to the disproportionate burden of developer contributions on small scale developers, for sites of 10-units or less, and which have a maximum combined gross floor space of 1000 square metres, affordable housing and tariff style contributions should not be sought. This will also apply to all residential annexes and extensions".

Shropshire Council Cabinet

However, Shropshire Council, who were one of the first Local Authorities in the Country to introduce Affordable Housing Contributions and the Community Infrastructure Levy following the introduction of the Localism Act 2011, have decided that the need for Affordable Housing Contributions will continue.

The Council's Cabinet met on 21st January 2015 to consider the consequences of the Minister's report and the proposed changes. The Shropshire Council website states that "Following the decision of the Council’s Cabinet to continue to give full weight to Policy CS11 of the adopted Core Strategy and the Type and Affordability of Housing SPD the Council will continue to seek provision of on-site affordable housing and/or affordable housing contributions for all residential developments of 10 dwellings or less within the Shropshire area and will continue to require developers to enter into s.106 agreements for this purpose."

The Current Position

This apparent disregard of the Minister's Statement and changes to the National Planning Policy have caused some discontent with local Planning Consultants, developers and self-builders. Shropshire has been left in limbo with some developers forging ahead and signing up to Affordable Housing Contributions on smaller developments in order to get planning permissions granted and move forward with their business. Meanwhile other developers and self-builders are waiting to see if the Council will change their view in line with the National Planning Policy.

At the time of writing there has not been an appeal against Shropshire Council's decision yet. Needless to say, the Planning community of Shropshire is waiting to see who the Planning Inspectorate will side with when they are asked to judge this issue.

13.04.2015

Update 

29th May 2015
A Planning Appeal decision on 14th May directly challenged the Council's position and they have released the following statement in response:-
Following the Cabinet decision of 21 January 2015 to continue to apply the provisions of the Council’s Type and Affordability of Housing SPD the Council has now received an appeal decision which gives some consideration to the issue. The Council is currently taking advice on the decision and will need to put the agreement on hold. Due to the potential impact of the findings of the appeal the Council is considering its position before proceeding with any outstanding planning applications where there is a s.106 agreement for affordable housing which is affected by the threshold in the Ministerial Statement of 28th November 2014 and the National Planning Practice Guidance on planning obligations.