Realising The Benefits Of Housing Delivery

 

Often when developers engage with the public their reaction is one of fear, mistrust and trepidation. ‘Why is there a need for these new houses? The schools, doctors and roads are full and we can’t cope with any more houses….we want the infrastructure first’. None of these thoughts are particularly irrational, after all parts of South East England are home to the most densely populated areas in Europe. Traffic congestion and long waiting times for GP appointments are not uncommon features of life in many parts of the UK.

One of my frustrations as a Town Planner working in this industry is the slow pace of investment in infrastructure, after the cheque has been signed by the developer. I am always reminded of one particular meeting with a Parish Council whose first question after my presentation was “there are two housing sites in the town being built, the developers promised us money for our community hall and we haven’t seen it. We don’t trust you or your industry”. When I pointed out to them that the monies had been paid to the District Council some 2 years previously, they simply didn’t believe me. However, a couple of days later, I did receive a very polite phone call from the Parish Clerk stating that yes indeed the six figure sum had been received by the council and yes, the District council had sat on it for two years and not told the Parish. They were particularly grateful to me for pointing it out. Unfortunately, that is not uncommon.

Section 106 agreements are legal agreements that are attached to a planning permission, legally binding the developer or landowner into paying monies towards local infrastructure improvements, that mitigate the impact of that particular scheme. However, as outlined in my tale above, the suspicion amongst developers and local communities is that councils are spending only a fraction of what they have received, and that the rest has disappeared into a sizeable black hole. Quite how big, no one knows.

There has been no requirement on the part of local authorities to disclose the figures and dozens haven’t. Until now. Councils are now required to publish an annual report disclosing the size of their payments and how much they have spent.

In February 2019, Property Week magazine sent freedom-of-information (FOI) requests to all 343 local authorities in England asking how much in Section 106 and CIL payments they had received between 2013 and 2018, and how much they had spent.

The figures obtained by Property Week, published in September 2019 revealed that local authorities across England received at least £4bn in infrastructure contributions from developers over the period, but only spent 37% of what they had received. More than £2.5bn – or 63% – of the money they were paid by developers remains unspent.

In that context, it is no wonder that local people remain sceptical about the benefits of housing delivery. House building remains one of the most important contributors to GDP in this country and the benefits are considerable. Directly employing over 250,000 people the industry contributes to the Exchequer through a range of taxes such as Stamp Duty Land Tax, Corporation Tax and Value Added Tax (VAT). Notwithstanding the aforementioned significant contributions towards infrastructure development and of course the provision of affordable housing, delivered without public subsidy. A report by the consultancy Lichfields published in July 2018 highlighted that in the year 2017/18, house building generated £38 billion of economic output to the economy.

Local Authority Planning departments are under resourced and the officers are doing their best to provide a service to their communities. Therefore, it is up to you the great British public to engage with your local councillors at all levels of local government to ensure that the monies generated from the provision of new housing is spent in your local area. After all, it is only right that your local community gets to share in this benefit.

Could your land have development potential?

David Morris - Planning & Operations Director: 01926 836910 / davidm@catesbyestates.co.uk