Examination of Witnesses (Questions 240
TUESDAY 23 OCTOBER 2001
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.
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.
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.
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.
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.
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.
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.
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
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
(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
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
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
(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
257. They may well address existing difficulties
(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.
258. Because, like you, they think it is all
(Mr Newton) That is part of the point.
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 becauseand I will not necessarily go into
thatopen space is often rather less contraversial than
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