The secretary of state's decision to turn down an appeal by developer Spenhill for the 705-home King George's Gate scheme in Tolworth, south-west London will act as a timely reminder for rigour in drawing up the section 106 agreements on developer contributions, experts have said.
Spenhill, which after submitting the application sold the site to developer Meyer Homes, had appeared to be on course to win an appeal against the locally controversial scheme's refusal, when the planning authority, the Royal Borough of Kingston Upon Thames, decided in February this year not to defend its original reasons for refusal at inquiry. But communities secretary Sajid Javid agreed with inspector Philip Asquith that problems with the scheme's section 106 undertaking were significant enough to justify turning it down.
The redevelopment of this former government site next to Tolworth station has been subject to significant opposition. Both the Lib Dem and Conservative general election candidates for the Kingston and Surbiton constituency gave evidence against the scheme at the public inquiry.
Early last year the borough's planning committee indicated it was likely to refuse the application, despite officer support, on grounds of scale, density and impact on local roads. The developer then reworked the application, prompting another officer recommendation to approve. Nevertheless, the committee decided in August 2016 to formally refuse it on the same grounds. When the developer appealed, the council took five months to decide not to defend its original grounds for refusal. Although the inspector eventually ruled against the scheme, he judged the council's behaviour to have been sufficiently unreasonable to justify granting partial costs against it.
However, the council maintained at inquiry that Spenhill's section 106 unilateral undertaking, which promised 93 affordable homes and a £1.9m transport contribution, had so many shortcomings that the appeal should be dismissed. The inspector agreed there were six separate significant problems with the undertaking, including a failure to provide evidence to justify the circumstances in which it said the affordable housing contribution would be reduced. Overall he found there were "deficiencies" that presented a risk that obligations "necessary to make the development acceptable" would not be delivered. A spokesman for Meyer Homes said it was "obviously disappointed" with the decision.
Stuart Andrews, head of planning at law firm Eversheds Sutherland, which has acted for Meyer Homes on other schemes, said it was "odd" the inspector had turned down the application rather than reserving judgment to allow the developer to address these concerns. Kathryn Hampton, senior professional services lawyer at Hogan Lovells, agreed this was "quite surprising", and Duncan Field, head of planning at law firm Norton Rose Fulbright said it was "unusual for a section 106 agreement to be the only reason for refusal."
However surprising, experts say the decision doesn't represent a new approach from inspectors, but does reinforce the need for developers to ensure that s106 undertakings are drafted precisely and contain enforceable triggers for delivering obligations within them. Oliver Wright, partner at law firm Forsters, said the decision had been "raised quite urgently" by clients and that consequently "we are paying much more attention to inquiry 106 undertakings." Elizabeth Christie, partner at Town Legal, said: "It is a reminder to practitioners to take care in drafting section 106 agreements to ensure that mitigation ... is secured appropriately."