Planning gain: Difference between revisions
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'''Planning gains''' (or planning obligations) are ways that local authorities in the United Kingdom can secure additional public benefits from developers, during the granting of [[planning permission]].<ref>{{Cite web|url=https://www.gov.uk/guidance/planning-obligations|title=Planning obligations|website=GOV.UK|language=en|access-date=2019-08-06}}</ref> |
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'''Planning gain''' refers primarily to the increase in the value of land which results from planning permission being granted for that land. This increase in land value mainly accrues to the owner of the land, but a levy or tax may be applied to divert some of the planning gain to the public sector. In England and Wales, such arrangements are currently negotiated between the developer and the council, and take place under the terms of [[Town and Country Planning Act 1990#Section 106|Section 106 of the Town and Country Planning Act 1990]]. |
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Planning gains seek to capture some of the uplift in land value which is generated by the granting of planning permission, and can be used to ensure that commercially viable development is not socially or environmentally unsustainable. They are used to fund the provision of public goods, including affordable housing, community infrastructure (such as libraries or parks), or environmental safeguards. |
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==Criticisms of Section 106 Agreements== |
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The planning obligations put on developers by Section 106 agreements are sometimes criticised for: |
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* inconsistency |
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* unfairness |
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* lack of transparency |
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* length of time to negotiate |
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In England and Wales, such arrangements are negotiated between the developer and the local planning authority (LPA), and take place under the terms of [[Town and Country Planning Act 1990#Section 106|Section 106 of the Town and Country Planning Act 1990]]. In Scotland the equivalent is a Section 75 planning obligation (Section 75 of the [[Town and Country Planning (Scotland) Act 1997]]). |
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Obligations may be created that are more than the developer would consider a bare minimum, with local authorities seeking contributions from developers that go beyond the definition originally given in [[Department for Communities and Local Government|DCLG]] Circular 1/97.<ref>http://www.communities.gov.uk/archived/publications/planningandbuilding/contributingsustainable</ref> |
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Section 106 agreements are often used by planning authorities to provide new public realm development or [[affordable housing]] in England and Wales. |
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In addition to negotiations which take place under Section 106, in 2010 the UK Government introduced a new standard method for securing generalised contributions from developers in England and Wales, known as the Community Infrastructure Levy (CIL). |
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The Government announced the proposals in October 2008 and legislated for CIL in the 2008 Planning Act. CIL came into force in England and Wales on 6 April 2010. |
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Typically, a new housing development over a given threshold size (commonly 15 dwellings in many local authorities) would be required to provide a pre-determined proportion of affordable housing - see DCLG Circular 05/2005. This is a source of friction between developers and local planning authorities, because the developers attempt to maximise revenue while the councils attempt to maximise the amount of affordable housing. Many councils have a loosely worded Development or Local Plan to reflect s 54A of the Act, which requires any decision to be reached in accordance with the terms of the Plan unless material considerations indicate otherwise. Circular 6/98 states affordable housing itself is just one material planning consideration, therefore simply meeting a requirement for affordable housing provides no guarantee that other issues may need to be addressed. |
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On 2010 the UK Coalition Government proposed a number of reforms to CIL.<ref>{{cite web |
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One of the reasons that s 106 agreements are unpopular with developers is that, at present, the government makes more money from the sale of affordable rented housing (about £5 billion a year) than it spends (about £3.5 billion a year){{Fact|date=November 2008}} and it is arguable that the main cause of these proceeds is not ongoing government investment but private sector (developer) investment. |
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A counter-argument would run that developers seek to maximise revenue and would neither provide services for housing at a subsidised rate, nor subsidised rents for the vulnerable, unless such a provision forced them to do so. |
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The practice of bargaining for Planning Gain precedes the 1990 Act and a 1981 report by the Property Advisory Group<ref>Planning Gain - Report by the Property Advisory Group, Her Majesty's Stationery Office 1981, ISBN 0 11 751588 4</ref> concluded that: |
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<blockquote> |
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"(with limited exceptions) the practice of bargaining for planning gain is unacceptable and should be firmly discouraged." |
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</blockquote> |
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However, the report was not acted upon. |
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In 2003, criticisms of s106 agreements led to a report for the Government by eminent economist Kate Barker. The report proposed a tax on planning gain, to be known as the Planning Gain Supplement (PGS). PGS was never implemented, and after extended debate on its merits the Government announced in 2007 that a new Community Infrastructure Levy (CIL) was its preferred method of securing generalisd contributions from developers. The Government legislated for CIL in the 2008 Planning Act. Implementing Regulations followed, and CIL came into force in England and Wales on 6 April 2010. However at that stage its future was already in doubt because a Conservative Party Green Paper of February 2010<ref>{{cite web |
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|url=http://www.conservatives.com/~/media/Files/Green%20Papers/planning-green-paper.ashx |
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|title=Open Source Planning |
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|publisher=UK Conservative Party |
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|accessdate=2009-12-05}}</ref> indicated that were they to come to power they would scrap it in favour of a different mechanism (though many commentators indicated that they could not see much difference). By April 2010 the UK General Election was less than a month away; so few local authorities took steps to implement CIL until the new Government's intentions became clear. |
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On 18 November 2010 the new UK Coalition Government indicated that it would in fact be retaining CIL. However, the Government proposed a number of reforms to the instrument that they had inherited.<ref>{{cite web |
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|url=http://www.communities.gov.uk/news/corporate/176860911 |
|url=http://www.communities.gov.uk/news/corporate/176860911 |
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|title=Community Infrastructure Levy |
|title=Community Infrastructure Levy |
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|publisher=Communities and Local Government |
|publisher=Communities and Local Government |
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| |
|access-date=2009-12-05}}</ref> |
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The reforms included a number of selected changes to the primary legislation implementing CIL (the [[Planning Act 2008]]) through the vehicle of the [[Localism Bill]], introduced into the UK Parliament in December 2010. The key changes proposed relate to a requirement to be placed on CIL charging authorities to pass money to other bodies (the stated policy intention being to pass money to neighbourhood groups), a clarification of the purposes to which monies raised may be put, and a reduction in the powers of the independent person appointed by the charging authority to advise on whether the proposed charges are appropriate. The Bill received Royal Assent as the Localism Act in November 2011. |
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A number of the smaller changes proposed by the new Government were implemented in a set of amending Regulations brought into force in April 2011. Consultation on the detail of the more significant proposals followed once the Localism Act had been passed and a further set of amending Regulations completed the changes. |
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==See also== |
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* the 2007 Consultation Paper "Changes to Planning Obligations" which proposes reducing the types of contributions contained in s 106 Agreements, with instead creating a perhaps uniform or perhaps more open to review system of Planning Gain Supplements.<ref>http://www.dclg.gov.uk</ref> |
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* the [[Barker review of land use planning]], which recommended that higher authorities should seek an additional portion of s106 "revenues" for themselves in order to fund public realm improvement in the local area.<ref>[http://www.rtpi.org.uk/item/603/23/5/3 Kate Barker review of the land use planning system in England]</ref> |
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[[Newark and Sherwood]] District Council, which was the first in England to publish a preliminary draft charging schedule, in November 2010.<ref name="newark">{{cite web | url=http://www.newark-sherwooddc.gov.uk/pp/gold/viewgold.asp?ID=5531 | title=Newark & Sherwood District Council | access-date=March 7, 2011 | year=2010}}</ref> Others followed, and in late 2011 LB Southwark prepared a CIL known as the Elephant and Castle Section 106 Tariff.<ref>https://www.southwark.gov.uk/assets/attach/1936/Elephant-and-Castle-Section-106-viability-report-2011.pdf {{Bare URL PDF|date=March 2022}}</ref> On 1 January 2012 the [[London Borough of Redbridge]] became the first local authority to bring CIL into legal force in its area. The most significant use of the policy is the ability of the [[Mayor of London]] to charge CIL across the whole of London. The Mayor's CIL is specifically intended to assist in the funding of the [[Crossrail]] project. |
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===Reception=== |
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The Community Infrastructure Levy is not universally popular. For example, [[Richard Benyon]] [[Newbury (UK Parliament constituency)|MP for Newbury]] has expressed concern that it will raise less money for [[West Berkshire Council]] than the existing regime.<ref>{{cite web|url=https://publications.parliament.uk/pa/cm201314/cmhansrd/cm140205/halltext/140205h0002.htm |title=House of Commons Hansard Debates for 05 Feb 2014 (pt 0002) |publisher=Publications.parliament.uk |access-date=2014-03-01}}</ref> |
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The [[Association for Consultancy and Engineering]] produced an analysis of Community Infrastructure Levy in October 2018 which found that £443 million of CIL is currently unspent by councils in England and Wales. Their report called for CIL to be replaced with a property sales levy in the medium to long term.<ref>{{cite web|url=https://www.localgov.co.uk/Scrapping-the-Levy-Why-we-need-a-change-in-approach-to-CIL/46252 |title=Local Gov |date =25 October 2018 | access-date=2018-11-23}}</ref> |
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==See also== |
==See also== |
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*[[Planning Policy Guidance Notes]] |
*[[Planning Policy Guidance Notes]] |
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*[[Grampian condition]] |
*[[Grampian condition]] |
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*[[Planning Act 2008]] |
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*[[Localism Act 2011]] |
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*[[Land Value Tax]] |
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==External links== |
==External links== |
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*[http://www. |
*[http://www.legislation.gov.uk/ukpga/1990/8/contents Town and Country Planning Act 1990] on [[Office of Public Sector Information]] website |
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*[https://S106.co.uk Section 106 application to modify or discharge] |
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{{UK legislation}} |
{{UK legislation}} |
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Latest revision as of 22:00, 14 March 2022
Planning gains (or planning obligations) are ways that local authorities in the United Kingdom can secure additional public benefits from developers, during the granting of planning permission.[1]
Planning gains seek to capture some of the uplift in land value which is generated by the granting of planning permission, and can be used to ensure that commercially viable development is not socially or environmentally unsustainable. They are used to fund the provision of public goods, including affordable housing, community infrastructure (such as libraries or parks), or environmental safeguards.
In England and Wales, such arrangements are negotiated between the developer and the local planning authority (LPA), and take place under the terms of Section 106 of the Town and Country Planning Act 1990. In Scotland the equivalent is a Section 75 planning obligation (Section 75 of the Town and Country Planning (Scotland) Act 1997).
The Community Infrastructure Levy (CIL)
[edit]In addition to negotiations which take place under Section 106, in 2010 the UK Government introduced a new standard method for securing generalised contributions from developers in England and Wales, known as the Community Infrastructure Levy (CIL).
The Government announced the proposals in October 2008 and legislated for CIL in the 2008 Planning Act. CIL came into force in England and Wales on 6 April 2010.
On 2010 the UK Coalition Government proposed a number of reforms to CIL.[2] The reforms included a number of selected changes to the primary legislation implementing CIL (the Planning Act 2008) through the vehicle of the Localism Bill, introduced into the UK Parliament in December 2010. The key changes proposed relate to a requirement to be placed on CIL charging authorities to pass money to other bodies (the stated policy intention being to pass money to neighbourhood groups), a clarification of the purposes to which monies raised may be put, and a reduction in the powers of the independent person appointed by the charging authority to advise on whether the proposed charges are appropriate. The Bill received Royal Assent as the Localism Act in November 2011.
A number of the smaller changes proposed by the new Government were implemented in a set of amending Regulations brought into force in April 2011. Consultation on the detail of the more significant proposals followed once the Localism Act had been passed and a further set of amending Regulations completed the changes.
Newark and Sherwood District Council, which was the first in England to publish a preliminary draft charging schedule, in November 2010.[3] Others followed, and in late 2011 LB Southwark prepared a CIL known as the Elephant and Castle Section 106 Tariff.[4] On 1 January 2012 the London Borough of Redbridge became the first local authority to bring CIL into legal force in its area. The most significant use of the policy is the ability of the Mayor of London to charge CIL across the whole of London. The Mayor's CIL is specifically intended to assist in the funding of the Crossrail project.
Reception
[edit]The Community Infrastructure Levy is not universally popular. For example, Richard Benyon MP for Newbury has expressed concern that it will raise less money for West Berkshire Council than the existing regime.[5]
The Association for Consultancy and Engineering produced an analysis of Community Infrastructure Levy in October 2018 which found that £443 million of CIL is currently unspent by councils in England and Wales. Their report called for CIL to be replaced with a property sales levy in the medium to long term.[6]
See also
[edit]- Town and country planning in the United Kingdom
- Planning and Compulsory Purchase Act 2004
- Planning Policy Guidance Notes
- Grampian condition
- Planning Act 2008
- Localism Act 2011
- Land Value Tax
References
[edit]- ^ "Planning obligations". GOV.UK. Retrieved 2019-08-06.
- ^ "Community Infrastructure Levy". Communities and Local Government. Retrieved 2009-12-05.
- ^ "Newark & Sherwood District Council". 2010. Retrieved March 7, 2011.
- ^ https://www.southwark.gov.uk/assets/attach/1936/Elephant-and-Castle-Section-106-viability-report-2011.pdf [bare URL PDF]
- ^ "House of Commons Hansard Debates for 05 Feb 2014 (pt 0002)". Publications.parliament.uk. Retrieved 2014-03-01.
- ^ "Local Gov". 25 October 2018. Retrieved 2018-11-23.