Author Topic: Barratt Appeal Against S.106 Planning Agreement Charges.  (Read 2021 times)

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Barratt Appeal Against S.106 Planning Agreement Charges.
« on: October 25, 2016, 08:47:49 am »
Barratt and other housebuilders are appealing against planning agreement charges.

In 2015 Barratt, a company that made a profit of £638million (15%) on a turnover of £3.759billion, in the year to 30 June 2015, won an appeal battle with Scottish Borders Council over how much it should pay towards improving the local roads network, as reported in the Border Telegraph.

Originally, Barratt was granted planning permission to build 70 luxury new homes at Meigle Farm in Clovenfords in 2007.  The planning consent required Barratt to make developer contributions to the council totally £700,000, comprising of £269,380 for education, £120,610 for the Borders Railway, £198,720 in commuted payments to provide affordable housing elsewhere, £42,000 for play park provision and £70,000 towards the roads network.

But in 2014, with the development nearing completion, Barratt asked the council to reduce these demands , specifically, Barratt wanted to cut its obligation to education and affordable housing provision by £278,800 and to have the road network contribution deleted from the agreement. When the Council refused, Barratt lodged an appeal with the Scottish Government’s directorate of planning and environmental appeals.

In October 2014, reporter Alison Coard dismissed the Barratt appeal, concluding that the sums sought by the council were "appropriate." However, on the issue of the contribution to road network improvements, Ms Coard noted "a lack of detailed evidence…on whether the guideline contribution of £1,000 per dwelling [£70,000 in total] is reasonable or necessary." Barratt then lodged a separate appeal to have the £70,000 deleted from the agreement. On 10 April 2015, another reporter Michael Mahony upheld the appeal concluding:
"The appellants [BDW Trading Ltd] are entitled to a definitive decision now…thus the planning obligation should be modified to remove the £70,000."


In another appeal, as reported in the Examiner , Kirklees councillors ruled on Barratts' financial issues as they sought to reduce the number of affordable units they were required to provide under the planning approval.

Barratt -David Wilson Homes had secured planning permission from Kirklees Council for 96 new homes off Grange Road, Golcar in November 2014. As part of the planning consent Barratt had agreed to provide 16 affordable homes on the site, a mix of two and three-bed homes priced as "affordable" for first-time buyers. Barratt submitted a viability appraisal with their application which aimed to justify a reduced level of contribution of affordable housing provision on the grounds that the development will otherwise be unviable, citing "abnormal costs" such as plot foundations, drainage and retaining walls costs which are far more than they anticipated.

Initially Barratt wanted to reduce the 16 affordable units to just two but Council argued the viability assessments showed Barratt  could afford to provide 11 affordable units in the scheme, which Barratt agreed to. Barratt were also required to contribute £88,360 for public open space; £237,223 for education services; £44,352 for a residents' METRO card scheme and £10,000 over five years for travel plan monitoring.

The house-builders' financial circumstances for the development were not made public but councillors may have been given details privately.

On another site the Examiner reported that Marsden-based SB Homes were granted planning permission for 28 houses, seven flats and a maisonette on land off Howgate Road in Slaithwaite in 2011. Negotiations had been taking place between the developer and Kirklees planners, who were asked to secure Section 106 (S106) contributions, paid by the developer in order to secure planning permission to build.

But in July 2015, Huddersfield Council were debating the builder's request to axe all section 106 contributions.

Steve Mitchell, speaking on behalf of SB Homes told the Council: "At this stage many developers would walk away from such sites, not withstanding that, the applicant is willing to continue with the development. He is prepared to take a risk and accept a profit level well below industry standards."

Kirklees officers had calculated that SB Homes would have to pay £84,016 towards local education, provide five affordable houses and pay £88,700 for off-site public open space.
SB Homes said that is unviable and they didn’t  expect to meet the industry-benchmark of 20% gross development value profit, even without a zero S106 contribution. As such, they asked Huddersfield's Planning Committee to axe all the contributions, which councillors reluctantly agreed to do.

So if a housebuilder, no matter how large can prove to councils they are only likely to make less than 20% profit, they appear to be able to get out of section 106 planning agreements.
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