Government changes to Section 106 policy will ‘hit council income’

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Councils say Government changes to national planning policy will make it more difficult for them to provide affordable homes.

Ministers have changed the rules on how much money developers must give councils when they build houses.

Under a Section 106 agreement councils can ask developers for money towards local infrastructure and affordable housing in the area.

Previously there was no limit to the size of development on which the council could ask for money. But under the changes to the National Planning Practice Guidance, sites of five units or fewer are now exempt.

Rutland County Council’s portfolio holder for development Terry King (Con) said: “Section 106 contributions are a significant source of income for the council and play an important role in funding the construction of affordable homes here in Rutland.

“While we appreciate the Government is seeking to boost the national housing programme by introducing these changes, we would have preferred the adoption of an incremental system. This would allow us to seek contributions on a rising scale, based on the size of a development, rather than implementing thresholds which do not allow any degree of flexibility.”

The threshold of five units or fewer applies in rural areas. A higher threshold of 10 units of fewer applies in urban areas.

South Kesteven District Council’s strategic director Steve Ingram added: “Whilst it is recognised that the Government has introduced these changes to try and stimulate local house building, the raising of the thresholds for developers to enable affordable housing provision, will mean that our ability to deliver new housing that local people can afford will be increasingly challenged.

“However, we are proactively looking at the ways that we can provide such homes. Indeed we are already building 33 new council-owned homes, and are committed to investing in further housing development and encouraging others to do so across the district.”