The Government has been urged to bail out stalled transport and other infrastructure projects, put on ice, due to a rapid decline in Section 106 payments.
The County Surveyors’ Society made the call as money raised nationally from Section 106 agreements for essential infrastructure to accompany development plummeted from an estimated £9bn in 2007/08 to £3bn this year. Consultancy EC Harris predicted this would decline still further.
A number of local planning authorities, faced with developments where construction had halted, or not started, are considering easing requirements or allowing payments to be delayed.
Slough Borough Council is to renegotiate two previously-signed deals where developers had gone into administration, including a major scheme involving 229 flats and commercial office space. Gerry Wyld, head of planning and strategic policy, said ‘a difficult balancing act has to be struck’. He continued: ‘We can’t leave a half-built development outside Slough railway station, which is neither fully-clad nor watertight, which is why we’re proposing revisiting the agreement with the administrator.’
But, on the other hand, the authority faced ‘either a reduced contribution, or no contribution, to infrastructure if property values drop,’ Wyld said, jeopardising delivery of local transport improvements and other infrastructure.
EC Harris claimed that 50% of Section 106 agreements were being revisited. Other councils, such as Ashford Borough Council, want to revive housing delivery by allowing Section 106 contributions to be deferred until units are sold.
Ashford planners advised councillors that three major developments – including a mixed-use redevelopment of the town’s Old Railway Works – were on hold. Developers would be expected to make a small initial contribution and then additional payments later, dependent on the value of sales made.
Oxford City Council, meanwhile, is to consult on reduced developer contributions for schemes forming part of the redevelopment of the West End of the city, which would see less money provided for public realm improvements.
The communities and local government select committee warned the Government this week that ‘the viability of some developments may only be assured if there is increased public subsidy for social housing,’ thought to be responsible for 50% of the funding contributions.
Huw Jones, member of the CSS strategic planning and regeneration committee, warned against simply spiking new and improved infrastructure. ‘We want to build sustainable communities, not just housing estates. If the Government wants to revive the housing market, where there is a robust understanding of the local infrastructure requirements and these cannot now be funded by developers, it should step in to cover the cost.’
Register now for full access
Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.
Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors.
Use the link below to register your details for full, free access.
Already a registered? Login
