The Labour AM has asked the Welsh Government to
re-examine the system after planning inspectors ruled that a property
development firm did not have to pay £334,683 to Denbighshire Council for a
development of flats on land at Plas Derwen in Abbey Road.
Under Section 106 Agreements developers are bound in
contract to deliver a portion of the project in affordable housing or other
community benefits such as playgrounds or new roads.
However the economic slowdown is leading to more of
these agreements being torn up.
The AM said this pattern could be repeated across Wales
leading to a huge loss of funds for local communities.
Mr Skates said: “As a result of the economic slowdown we
need to see a change to the way planning law operates in Wales, particularly in
relation to the obligations that are enforced on private sector developers to
develop affordable housing.
“Up until now planning gain or Section 106 agreements
have placed conditions on developers to ensure a certain portion of the build
is affordable housing or other facilities such as a new park or playground that
would benefit the community.
“However, as we have seen from the Llangollen case, the
economic slowdown is leading to more and more developers being released from
their contractual obligations.
“If the Llangollen case is being repeated across Wales
this is millions of pounds potentially being lost by our communities.
“It’s a difficult situation because whilst we want to
get the economy moving again through more housing construction, there is the
risk that communities in Wales could lose more of this very valuable funding
stream.”
The Welsh Government said earlier this year it will work
with councils to revise the Section 106 guidance because "inconsistencies
in approach" can act as a barrier to housebuilding.
An investigation back In February by the BBC showed that
more than half of Welsh councils were owed nearly £2.3m from private developers
under section 106 agreements.
Mr Skates added: “We need to see reform thought through
carefully. Whilst there must be room for negotiation of section 106 agreements
as economic times get tough, developers must not be released from their
obligations lightly and it must always be with the consent of the council, not
forced upon them as happened in Llangollen.
“Maybe we could look to more innovative solutions such
as having the Section 106 agreement transferred into a long-term loan that the
developer could pay back over the longer term? We also need to look at the
powers councils have to enforce current agreements.
“Whichever way we go, we must ensure communities don’t
lose out and that we maintain confidence in contracts that have been signed in
good faith and we don’t undermine transparency in the planning process.
As llanblogger revealed last week, at an appeal
hearing in Llangollen Town Hall on September 4, Belgrave Homes (Llangollen)
claimed that because the original development of 20 apartments in Abbey Road is
set to make a financial loss, an agreement – or obligation - it signed with
Denbighshire County Council in 2006 to make cash contributions towards
affordable housing and public open space in the town no longer serves a useful
purpose.
But the council
argued that the sums covered by the Section 106 Agreement - £226,432 for affordable housing and £47, 526 for
open space making a total of £273,958, indexed
to £334,683 up until last April - should still be payable.
In his official ruling, the inspector, Emyr Jones, said:
“The appellants are not in a position to pay these sums and the bank, which has
to bear the bulk of the above loss, is not going to make any additional
payments on its own volition.”
Allowing Belgrave
Homes’ appeal, he said: “In the above circumstances, I am of the view that
there is no real prospect of the council recovering the commuted sums and its
principal solicitor accepted that the chances of so doing were slim.
“As a result, adopting a pragmatic approach, it can
be concluded that the obligation no longer serves a useful purpose.”
·
See llanblogger’s
full story at: http://llanblogger.blogspot.co.uk/2012/09/inspector-allows-appeal-over-plas.html
I'm not sure a change in the law will alter matters realistically, this developer like many others is in hoc to our friends in the bank. He was not in a position to come up with the monies and his bank certainly weren't going to pay on his behalf. It shows that Local Planning Authories can place any condition you like, Grampian style or otherwise and a speculative developer will always wriggle out of the obligation. Let's wait and see whether J Ross and D&C do something similar, net result no local print factory, but a massive supermarket which ruins our town centre. It's a waste of time having a Planning Policy Wales if Local Councils ignore it at will!
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