Repealing Sections 106BA to BC – yet another example of the law of unintended consequences?

John Pugh-Smith

In Social Sciences 'unintended consequences' (or unforeseen consequences) are outcomes that are not the ones foreseen and intended by a purposeful action. Idiomatically, it is commonly used as a wry or humorous warning against the hubristic belief that humans (let alone politicians) can sufficiently control the world around them.

Section 7 of the Growth and Infrastructure Act 2013 (which added Sections 106BA to BC to the TCPA 1990) was intended to unlock 'stalled developments' due to over-burdensome affordable housing obligations making consent implementations 'economically unviable'. Having provided detailed statutory Guidance, DCLG has seen its Guidance correctly applied in at least 40 Section 106BC appeals determined by PINS since May 2013; of which 24 were allowed and 16 were dismissed. According to Planning Magazine (08 April 2016) the decisions involved schemes comprising nearly 4,000 homes of which developers had originally committed to providing nearly 700 as affordable units and to pay over £12 million in off-site  contributions. Furthermore, there has continued to be a steady stream of Section 106BA applications this year, and, for schemes that have not yet been commenced, all seemingly contributing to much needed five-year housing supply tables and to Treasury growth forecasts.

Therefore, it seems surprising that despite concerns being expressed over the same period about the "sunset" provisions of s.7(4) neither Ministers nor DCLG officials have yet grappled with the legal consequences. Indeed, with informal comments from officers within DCLG and PINS that provided a Section 106BC appeal is made before the end of April, it will still be considered, there would still appear to be no legal basis supporting this advice at the time of the writing of this article. At law, the wording of s.7(4) is unequivocal: "Sections 106BA, 106BB and 106BC of the Town and Country Planning Act 1990, and subsection (5) of this section, are repealed at the end of 30 April 2016".  Despite a positive reference in the last Autumn Statement, the Planning Minister has now let it be known in planning 'circles' that he has decided not to substitute a later date under the power given by  s.7(5) due to perceived concerns about the undermining effects of this legislation on the proposed 'Starter Homes' initiative, subsequent to which, on 11^th April,  Steve Quartermain, the recently returned DCLG Chief Planner, has circulated his "Planning Update Newsletter" in which he remarks:

"Ministers have now decided not to extend sections 106BA, 106BB and 106BC of the Town and Country Planning Act 1990, requiring authorities to renegotiate unviable affordable housing requirements, and providing an appeal mechanism for this. These sections will therefore be repealed at the end of April 2016. Applications can be submitted to the appropriate authority under section 106BA until the end of April 2016, and if an application is submitted before that date a subsequent appeal to the Secretary of State will generally still be considered"

Nevertheless, given that Ministers, albeit in the last Coalition Government were heavily criticised for "back door" policy amendments in the West Berkshire case [(2015) EWHC (Admin), and, albeit that the Court of Appeal's judgments are awaited it is surprising that common sense as well legal certainty has not been applied through the use of s.7(6) which reads:  "The Secretary of State may by order make transitional or transitory provision or savings relating to any of the repeals made by subsection (4)".

Without formal provision being clearly made under s.7(6), a judicial review by a frustrated local authority, or, a desperate appellant claiming legitimate expectation may yet lead to justified Section 106BC appeals being unnecessarily put in jeopardy. Let's hope that common sense and legal certainty will yet prevail.

It is also ironic that, at last, there is a High Court case on these provisions. On 18^th March 2016 Mr Justice Gilbart gave judgment in Medway Council v Secretary of State for Communities and Local Government & Byrne Estates (Chatham) Ltd [2016] EWHC 644 (Admin). The High Court challenge arose from an inspector's claim was brought by Medway Council following a decision of an Inspector to remove a requirement to pay a commuted sum of approximately £1.3m in lieu of on-site provision of affordable housing at a mixed use development in Chatham Quays. The Section 106BA application had been made after the residential element of the development had been completed but before the commercial element had been completed. The parties to the appeal had agreed that the development was not viable if the commuted sum was required, but the Council had argued that the appeal should be dismissed because the relevant development had been completed at the time of the application. The Judge rejected this submission on the basis that the assessment of the viability of a scheme related to the development authorised by the planning permission, including the commercial elements of the mixed use scheme as well as the residential part. Accordingly, the Inspector had not erred in recording that the parties were agreed that the development was not completed, since it was not disputed that the commercial elements were incomplete. He noted that he had found it unnecessary to go on to consider the Interested Party's alternative submission that an application under Section 106BA can be made even if the development in question has been completed

Co-incidentally, that issue was considered by this author in an earlier 2015 Newsletter following the decision of Inspector Paul Clark in a Section 106BC appeal concerning No. 53 Pavilion Drive, Southend-on-Sea (APP/D1590/Q/14/2228061). Although dismissing the appeal on his viability findings, he helpfully remarked:

"…The requirement to provide affordable houisng is subject to trigger which ahs been passed and so, has come into effect. But, for whatever reason, it has not been acted upon (and so, is stalled) but is still capable of of enforecement. It is not spent. So, at the operative date for this appeal (immediately before the date on which the applicenforecement. It is not spent. So, at the operative date for this appeal (immediately before the date on which the application aws made), which could be acted upon and enforced. I therefore conclude that it is open to me to consider whether this affordable houisng requirement means that the development is not economically viable and; if so, how the appeal should be dealt with so that the development becomes economically viable". 

Given that I am now dealing with the same point but this time for the developer, rather than the local authority, I may too need to make case law, again, if reason and common sense do not prevail. As is also said so often these days: 'a month is a long time in planning, not just in politics'. 

John Pugh-Smith has been and is currently involved with several Section 106BA applications involving the issues raised by this article including one that now has to proceed to a Section 106BC appeal before 30^th April 2016.