Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 240 - 259)

TUESDAY 23 OCTOBER 2001

MR DICKON ROBINSON, MR MIKE NEWTON AND MR JULIAN SMITH

  240. I say this in no sense of criticism. It is just helpful to know what it is you are objecting to and, fundamentally, you are objecting to something which might cost you more.
  (Mr Newton) It might cost us more and might prevent the development taking place if the requirement is excessive and there is not the value in the land to support it.

Mrs Ellman

  241. Then it would be negotiable?
  (Mr Newton) Yes but I think we are in a situation where the scale of requirements for all sorts of facilities is ever increasing and where the land resource in urban areas is more marginal in economic terms we will get to the point where some of our members will walk away from sites because they cannot deliver those expectations. That is very important in terms of delivering the government's urban agenda because we have to maximise the development of urban areas.

Mrs Dunwoody

  242. Would they do that in an area where there was a great shortage of land?
  (Mr Newton) I am not quite with you.

  243. Are you telling us that they would walk away from a development where they needed the land and could see a proper rate of return?
  (Mr Newton) It does depend on circumstances. In areas of London, for example, where there are very high land values and very high demand there is not so much of a problem and it is possible to fund a range of facilities. If you are talking about East Manchester where there is a very poor market, large areas of abandoned houses, crime, poor education, where in order to meet government targets you have got to create a new housing market in a place where people do not want to live, the extent of the requirements the developer has to fund is a crucial issue in terms of whether that development can actually take place.

Dr Pugh

  244. To seek clarity on your answer to Louise Ellman a minute or two ago. Your objection to paying for an off-site development was primarily because it was not occasioned by the development, there was not a needs assessment. I presume that you would not object if you found yourself in an area where a Section 106 suggested a playground adjacent to a housing development and there were abundant playgrounds in that area, but nonetheless the local authority wanted to put a playground absolutely in that area even though there was no need for it. Where the Section 106 agreements are on site, need does not enter as a factor into it. You accept it as a simple levy on the development but you are not so happy to accept it when it is an off-site development. Am I putting words into your mouth?
  (Mr Newton) The fundamental test is need and how that relates to the development whether the need relates to the development. Whether it is off site or on site is a secondary consideration.

  245. So The House Builders Federation would not object if a Section 106 were given on an occasion where you thought there was no need but it was on-site development?
  (Mr Newton) We would object if it did not relate in any way to the development.
  (Mr Smith) Because that is fundamentally a tax.

Chris Grayling

  246. Briefly on this point to be clear about this. You are talking about an area like East Manchester where you are trying to create a housing market. Surely developers are not going to be there at all if you cannot create that market and a lot of the things that are being talked about here in the creation of local amenities are part of that development, whether or not they are on site or not. People are not going to go there if you build a few houses that are newer than the old ones. People will only go there if you create a really compelling urban village environment to live in. To do that you are going to have to create all the infrastructure that goes with the housing.
  (Mr Smith) That is entirely true.
  (Mr Newton) In that case it is question of priorities. It is a question of what the value of the land will support and whether the emphasis should be on the provision of urban open space or educational issues, community halls, libraries. The list can be very extensive.

Mrs Dunwoody

  247. Tthe definition of need is yours?
  (Mr Newton) No, it is not. It is part of the process of negotiation, is it not?

  248. To be quite clear, the definition of need for that particular site is yours?
  (Mr Newton) The framework for that is in government guidance and we negotiate on that basis.

Christine Russell

  249. I was going to ask for a comment on a situation where a brown field site is used for casual play by local children where that site then gets planning consent for elderly sheltered accommodation and the kids are then displaced with nowhere to play. In those circumstances is it not perfectly legitimate for the local authority to say, "Can we please have some money to enhance the play provisions in the local park", which maybe a good few 100 yards away from the site?
  (Mr Newton) In that case there may be a loss of an existing recreational facility and it may be legitimate for the developer to redress that loss in proportion to the damage that may have occurred, and therefore a development itself can incorporate some benefits in terms of open space and public access.

  250. But the last thing these elderly residents want is local kids using it as a casual play area as they were doing in the past.
  (Mr Newton) If there is a loss of existing recreational facility as a consequence of the development then it may be appropriate for that to be redressed.

Mr Betts

  251. This point about needs, it may not be directly related to the development itself but a few minutes ago you said the key point was was it affordable, can the profit you make from the houses cover it. Does it matter whether the needs are related to that particular development or the existing area?
  (Mr Newton) I did not quite follow that. The point is that we have extensive planning gain requirements. It is a question of what is achievable and whether we can deliver a development and whether is it is economically viable. That is fundamentally the issue.[4]

  252. At the same time in giving evidence to the Department you talked about the problem of having to make up for existing deficiencies and you did not think it was fair. Now you are saying it does not matter as long as it is affordable and it does not matter whether you are providing facilities for an existing deficiency or one that is directly related to the development itself.
  (Mr Newton) The point is that if in all types of planning gain we are into resolving existing deficiencies, then that does have a bearing on the scale of the finance we have got to deal with it.

  253. That is obvious, but does it matter?
  (Mr Newton) It does matter.

  254. But if it is affordable, does it matter?
  (Mr Newton) It really depends on the circumstances. I think as a principle we are concerned about it because there is a discipline in the existing circular in terms of specifying contributions.

  255. Are we not entering a different world now in relation to PPG3 where we are not dealing, by and large, with greenfield sites where everything is new and all the deficiency is new because it is all created by the housing being built. Now we are often dealing with three or four smaller developments all on brownfield sites, all of which might add slightly to the deficiency of an area but already that area may be deficient, and you cannot provide a play area or an open space just for that new housing, it has to cater for the whole community. Is this not a different planning approach that has to be accepted and reflected here as well?
  (Mr Smith) You are sitting here trying to reconcile competing demands and what you have said about open space could be applied to affordable housing, it could be applied to educational contributions and other things and, unfortunately, the current situation is that not only has the implementation of planning guidance become distorted in practice but developers have to try and find their way through and negotiate with local authorities to resolve all these competing issues. Very often the local authority itself is not very good at prioritising and that is a very difficult situation in which to operate commercially.

  256. Is not one of the problems in trying to approach this one development at a time bit by bit rather than having an overall view?
  (Mr Smith) You need to have an overall view. In some places like East Manchester it will only work with an overall view and in some respects the draft PPG17 does not approach it with an overall view.
  (Mr Newton) We need a comprehensive approach on our contribution because sometimes they need to be off site and need to be co-ordinated with a general improvement in infrastructure and facilities and services. I think we accept, especially in the context of large, run-down urban areas, that off-site facilities are permissable.

  257. They may well address existing difficulties as well.
  (Mr Newton) It is a fine point. We have a concern about that. The point I would emphasise is that at the moment that is contrary to government guidance, which is clear, it is explicit and it is in Circular 1/97. I suppose the question you have to address is why does government direct that contributions should be limited in that way.

Mrs Dunwoody

  258. Because, like you, they think it is all money.
  (Mr Newton) That is part of the point.

Chairman

  259. Does the Peabody Trust feel that 106 agreements have worked well?
  (Mr Robinson) Sometimes. I think Section 106 is a somewhat imperfect tool very often to achieve things like social housing, but open space is possibly something which is easier to do, I would have thought, through Section 106s because it does not carry some of the implications of including social housing in developments because—and I will not necessarily go into that—open space is often rather less contraversial than social housing.

  Christine Russell: We have mentioned children's play areas. Many local authorities use the guidelines that are set down by the National Playing Fields' Association but in the last few years a lot of local authorities are getting into"NEAPs" and "LEAPs" which I am sure you are familiar with.

  Mrs Dunwoody: I do not think I am familiar with them. Could we have them set out in English?


4   Note by witness: If developers contributions serve wider needs unrelated to the development itself, this conflicts with the whole basis for planning obligations in planning law and Government guidance. Contributions then become a general tax on development, levied without authority or legislative backing. Why should housing development meet needs unrelated to it? We could argue that such needs could be addressed by taxing other types of development or business in general. PPG 17 must be set within the existing framework for planning obligations. It is practical guidance. It cannot aspire to a new form of development taxation. Back


 
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