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During the next decade, London can expect to receive more than £1bn in direct financial contributions and many hundreds of millions more of benefits ‘in kind' from developers, in return for planning consent. This money is paid through Section 106 agreements to offset the disruption caused to the local community by development. Depending on where you stand, Section 106 might be described as animal, vegetable or mineral – or perhaps all three. For some, it is the milch cow which provides an apparently-limitless source of planning gain. Others think it is the carrot that encourages local authorities to come up with permission to build. For the rest, it might be the key that squares the circle of creating new development while protecting the quality of life for existing communities. Whatever, it is, it's the polluter that is paying. The London Assembly's planning and spatial development committee's new report Who gains? reviews how the Section 106 system operates in London. Not surprisingly, it finds that it operates with very different results depending on the sort of proposals put forward, the opportunities they present for negotiation, and the policies and skills possessed by boroughs to extract benefits for the community. Several questions surrounding the system prompted our investigation. Are some agreements difficult to enforce? Is there a coherent strategic approach to negotiating Section 106 agreements? Can councils afford to hold ‘big corporate players' to legal agreements, or are they forced into renegotiation, leading to a diminution of agreed community benefits. And, above all, does the community have any involvement in determining how the money is used? Our research highlights the variety of outcomes across London. While some boroughs have managed to secure benefits approaching £35m in the last two years, others have struggled to reach £155,000 over the same period. As our report states, we make no judgements about these figures, but recognise they are a product of different approaches and opportunities. While national legislation sets out the general principles under which these planning obligations can be negotiated, it is local authorities which are empowered to apply and negotiate Section 106. This is why there are different interpretations of this guidance. And that results in the considerable policy variations between local authorities across London. From what we have seen, the performance of London boroughs in this area has improved and is continuing to do so, although the boroughs themselves acknowledge there is still work to do. We saw excellent examples of innovation, corporate co-ordination and hard-headed negotiation in case studies from five London boroughs. But we also saw the effect that staff shortages, high turnover and relative inexperience in Section 106 negotiations can have when it comes to extracting the ‘public's dividend' from new development. Let us be clear, there is a degree of urgency about all of this. More and more demands are being made on the funds that Section 106 can extract. Eventually an upfront levy could bite into the profits developers make and that are made available to mitigate the negative effects of their proposals. And, for London, next month, like it or not – and personally, I do not – the mayor will assume his new planning powers that will allow him to take over some of the largest and, in Section 106 terms, most lucrative, applications for development. He will then be able to negotiate the planning obligations. My view is that those communities who suffer the disbenefit of development should be those who receive the negotiated benefit. Given the scale and pace of development we are seeing – and the potential for negative impacts on the community that exists – London is a city where Section 106 must work effectively. This is why our report calls for a renewed effort by all the boroughs to raise their game to match that of the developer and learn from the leaders in this area; to prioritise getting the most out of Section 106 as the community dividend; and, perhaps most important of all, to encourage greater civic involvement in making that happen. Click here to read Who gains? Tony Arbour AM is chairman of the London Assembly Planning and Spatial Development Committee

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WHITEHALL

Who gains?

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