Legal viewpoint - Credit scheme may conflict with levy

Practitioners all have days when we'd like politicians to see through our eyes.

One such day was 28 November, when planning minister Brandon Lewis announced that a financial credit, "equivalent to the existing gross floorspace of any vacant buildings brought back into lawful use or demolished for redevelopment, should be deducted from the calculation of any affordable housing contributions sought from relevant housing schemes".

So even where affordable housing provision remains viable following Community Infrastructure Levy (CIL) and other costs, councils will find that local plan headline requirements will be further eroded where a development site includes any vacant building. The new credit, already enshrined in planning practice guidance, will not apply to "vacant buildings which have been abandoned". But what is "vacant" but not "abandoned"? How do councils calculate the floorspace? How is this to be deducted from policy requirements, which are often calculated per housing unit?

The credit's interaction with CIL is also unclear. CIL is reduced where at least part of an existing building has been lawfully occupied for six months of the three years preceding - usually - a grant of permission. Developers could well secure this reduction but also argue that, for the purposes of the credit, the building is "vacant".

Meanwhile, the Autumn Statement promised to speed up section 106 negotiations. The aim is familiar and worthy, but political ignorance of some of the causes for protracted talks persists. The sector was sold the idea of CIL partly in return for a simpler section 106 system, which hasn't materialised. Affordable housing is usually the most complicated part of any section 106 deal. CIL does not address that. Indeed, its effect on viability puts more pressure on affordable housing. Also, the regulation 122 "necessity" test and the regulation 123 restrictions on pooled contributions are causing untold complications.

Outside CIL, we are in a political world where all physical and social infrastructure is sought from developers via amorphous negotiations - without clear ground rules - on such matters as healthcare, education and policing, often against changing administrative and funding regimes. Section 106 deals on any major scheme thus become bespoke public-private sector multi-million-pound delivery agreements.

Yet section 106 deal are also legal documents. It takes two to reach an agreement, and the stakes are high. Developers need to ensure that obligations are ring-fenced and do not render schemes unmarketable. Councils' resources are limited and complex agreements put normal life on hold if workable mechanisms are to be hammered out. No-one wants the uncertainty of an appeal against the background of a contentious unilateral undertaking. Against such an uncertain and difficult background, I am regularly impressed by how quickly section 106 agreements for major schemes are concluded.


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