Report of the Strategic Director (Growth and Development).

This report provides an update on the Council’s Section 106 (s106) activity for 2022/23 and to date.

The committee considered a report of the Strategic Director (Growth and Development) which provided an update on the Council’s Section 106 (s106) activity for 2022/23 and to date.

Key points and themes within the report included:

·         Providing an introduction and background to s106 and s278 agreements,

·         Activity in 2022/23 and 2023/24 to date, noting that there had been an increase in planning applications so far in 2023; 

·         A comprehensive list of agreements completed during 2022/23 and 2023/24 to date;

·         Contributions received and spend; 

·         Affordable housing and projects through the Council’s Housing Affordability Fund (HAF);

·         Benchmarking information received from Sheffield City Council and Liverpool City Council; 

·         The work of the officer working group; 

·         Tree planting and landscaping; 

·         Proposed planning reforms; and 

·         An update on the Local Plan. 

Key points and queries that arose from the committee’s discussion included:

·         The definition of ‘trigger not met’ and ‘viability appraisal’ on the Obligations Schedule, with particular reference to Miles Platting and Newton Heath; 

·         How the clawback process worked in reality, how many times this had been used and the outcome of this; 

·         Transparency around viability assessments; 

·         If the proposed Community Infrastructure Levy would replace Section 106 agreements in relation to affordable housing, and whether this would increase the number of affordable homes;

·         How members could be involved in deciding where s106 monies were allocated and spent;

·         Suggesting that the Weekly List email be amended to highlight the wards which have received applications so that members do not have to open the document to see what wards are included; 

·         Whether the Obligations Schedule was an evolving list of agreements; 

·         The usefulness of benchmarking Section 106 policies with other cities;

·         Whether the current financial climate and inflation rate had impacted on the amount of s106 contributions;

·         How members could be advised of applications in their ward in advance; and

·         Recommending that delegated authority be given to the Chair, in consultation with the Executive Member for Housing and Development and the Strategic Director (Growth and Development), to request a report should progress be made on the proposed planning reforms.

The Executive Member for Housing and Development stated that Section 106 agreements were a vital part of the planning process to ensure that any harm or loss of amenity can be mitigated in communities where developments happen, for example through the provision of affordable housing, highways infrastructure, investment in green spaces, new schools and surgeries. 

In response to the Chair’s query regarding what was meant by ‘trigger not met’ and ‘viability appraisal’, the Section Planning Manager explained that ‘trigger not met’ referred to when the payment was due to the Council as a result of development reaching a certain point i.e., a certain number of houses being built or commencement of development. He clarified that a viability appraisal was provided to demonstrate whether a housing developer could afford to either include affordable housing in the scheme or to make an off-site contribution. Where this was financially viable, a legal agreement would be drafted to ensure either receipt of a specific sum of money or the delivery of a number of affordable homes on site. 

The Executive Member for Housing and Development stated that s106 agreements were just one mechanism to achieve affordable housing and that Homes England grant funding could not be used as s106 money but could still be used to develop affordable homes. He further stated that viability assessments were public and accessible through the Planning Portal and there was a lot of independent scrutiny of these. He explained that the Council was bound by the National Planning Policy Framework (NPPF) which viability assessments had to comply with. He stated that he would like the NPPF to be changed to award the Council more levers to deliver affordable housing through the viability process. 

The Director of Planning, Licensing and Building Control emphasised that all viability assessments were publicly accessible and that all assessments were reviewed robustly and independently. In-house advisors would then verify the findings of the independent assessors.   

The Director of Planning, Licensing and Building Control advised that triggers would be met at varying points in the development process and that thew Council had its first two application which met the trigger, one of which had been assessed further and no additional contribution could be provided.  

In response to a query regarding the proposed Community Infrastructure Levy, the Director of Planning, Licensing and Building Control explained that further guidance was still awaited from central government. She stated that the Council had been waiting further information on planning reforms for 18 months and it was understood that the levy was likely to replace s106, although it was suggested that there could be exceptional circumstances where an s106 agreement could still be used to deliver affordable homes. 

The committee was advised that the officer working group met once a decision on a planning application had been made. It was stated that a chart was available which demonstrated where members could be involved in the decision-making process for s106 monies. The Director of Planning, Licensing and Building Control advised that the department encouraged developers to engage with members at pre-application stage and explained that the Weekly List informed members of applications received for each ward. She also encouraged members to contact Planning Officers if they had any queries on an application or development. 

It was noted, however, that the Council could not mandate developers to undertake pre-application engagement or how long for.  

In response to the suggestion that the Weekly List email be amended to highlight the wards which have received applications so that members did not have to open the document to see what wards are included, the committee was advised that members and residents could sign up to email alerts for individual wards of interest to them. 

The Section Planning Manager clarified that agreements signed within the last 12 months were included in the main body of the report, but these would be included in the Obligations Schedule for future reports.  

With regards to benchmarking exercises, the Director of Planning, Licensing and Building Control explained that this had been challenging as authorities had different policies which made it difficult to compare. The Assistant Director of Planning and Building Control concurred with this and suggested that asking what s106 monies were collected for could be a more suitable measure to benchmark against. 

The Director of Planning, Licensing and Building Control stated that the state of the market had an impact on financial viability with supply chain and material costs being incorporated into the process. She advised, however, that the Council had been able to withstand these pressures but there had been some delays in development. She confirmed that the development industry remained engaged with the Council and aware of its priorities regarding affordable housing and zero carbon. 

In response to the Chair’s query as to how members could be advised of applications in their ward in advance, the Director of Planning, Licensing and Building Control endeavoured to consider this further but noted that there were issues around when this engagement would take place and what information could be shared given the confidential nature of some applications. 

The Executive Member for Housing and Development stated that the Council used the planning process to deliver its ambitious targets as set out in the Housing Strategy. He explained that developers were increasingly working with Registered Providers to create mixed-use developments across the city. He noted challenges with inflation but explained that there continued to be high demand for housing and employment space in Manchester. 

Decision:

That 

1.    the report be noted; 

2.    the Committee asks officers to undertake a benchmarking exercise with other core cities to understand what they collect Section 106 monies for; and

3.    delegated authority be given to the Chair, in consultation with the Executive Member for Housing and Development and the Strategic Director (Growth and Development), to request a report should progress be made on the proposed planning reforms.