Nothing seems to have united housebuilders and housing associations more in recent years than their opposition to the 11th-hour proposal in the planning bill to give developers the option of paying a tariff rather than negotiating a section 106 agreement.
Having seen off a similar proposal when the bill first appeared in December 2001 – in which tariffs would have replaced section 106 outright – many are wondering what has sparked its reappearance.

Just to jog a few short memories, the protracted negotiations that section 106 agreements often entail have been repeatedly blamed for slowing down the planning system and for bringing housebuilding to its lowest levels since the war.

A study funded by the Joseph Rowntree Foundation in October 2002 claimed that these agreements were doing little to raise the total number of affordable homes being provided and that of the 12,000 built using this process, 70% were actually being funded by social housing grant.

So the government, desperate to get more houses built and with a planning bill already going through parliament, has decided to tag on this half-baked idea.

Despite its good intentions, there are big holes in its approach and the more anyone thinks about it, the bigger the holes appear.

There’s no point replacing one imperfect system with one that is even more flawed

Housing providers want to know, for example, how they will be able to get their hands on land to build affordable homes if developers can simply pay a tariff? And what will happen to the holy grail of mixed tenure?

Caught with its trousers down, the government is reassuring councils that tariffs don't necessarily have to be demanded in cash. At the same time it is anxious to reassure developers that councils will not be allowed to hold them to ransom. In any case, critics say, the tariff system will not reduce the lengthy negotiating procedures but simply introduce a different set of things to haggle over. Everyone is confused.

Meanwhile, new research from the Department of Land Economy at Cambridge University is expected to show that last year the number of homes built through section 106 agreements nudged up to 12,600 homes. More importantly, the number of sites with planning permission rose to 23,700. Not all of these will translate, two years down the line, into completions – particularly now that the Housing Corporation has, rightly, put its foot down on how grant is used to prop up such deals.

But there is at least some optimism that the present system is improving. Indeed, its supporters say that with more effort, such as the use of standard contractual frameworks, better planning guidance and trained negotiators within local authorities, the system could be made to work even better. So is this the time to complicate things?

Source

Housing Today