Renewed Changes to s106 Planning Obligations

Changes to Section 106 (s106) obligations, implemented in a ministerial statement by Housing and Planning Minister Brandon Lewis in November 2014, regarding changes to s106 thresholds saw a change to a 10 unit threshold and 1,000 sqm gross floor space threshold for affordable housing contributions through s106 planning contributions.

These changes have subsequently been challenged by West Berkshire District Council and Reading Borough Council at the High Court under the following 4 grounds:

1. It was inconsistent with the statutory planning regime.

2. The Secretary of State had failed to take into account necessary material considerations.

3. The Secretary of State’s consultation upon the proposal was legally inadequate.

4. The Secretary of State had failed properly to assess the impact of the proposal upon persons with protected characteristics: Equality Act 2010 s. 149.

In July 2015 the challenge of the two Local Authorities was upheld and that the ministerial statement was unlawful. This, however, was taken to the Court of Appeal by the Communities and Local Government and in May 2016 in a joint ruling by Lord Justice Laws and Lord Justice Treacy, the appeal was upheld on all four grounds, thus restoring the statement.

This is a victory for small developers who will no longer face costs that could stop them from developing at all. Often small scale developments face tight profit margins and with the removal of planning obligations this will help to bring developments forward. The success of developments, however, can often be down to locational factors and an overarching policy such as this, may not take that into account. Policy of this type may therefore be more suitable in some areas than others.

In light of this, West Berkshire and Reading Councils are currently reviewing the verdict and it is likely that they will appeal against this contentious decision.