Time for a health upgrade to Section 106

Section 106 is not in a good place. Originating from the Town and Country Planning Act of 1990 it was designed as a mechanism to mitigate the impact of development in local areas through legal agreements between a planning authority and a developer, ensuring that funds are available to do this in a locally beneficial way.

Over the decades these developer contributions, via Section 106, have provided an increasingly wide range of services and infrastructure for community use, including

·       affordable housing

·       green spaces

·       educational facilities.

·       traffic calming measures or road improvements.

·       public transport enhancements

·       NHS requirements

·       local employment initiatives.

But we’re now at a point where Section 106 is not delivering the community infrastructure or development mitigation for which it’s intended. There’s an abundance of evidence that Section 106 is misused, not used, and abused in too many places.

The Home Builders Federation has undertaken two investigations in the last year, one focusing on unspent Section 106 funds and the other focused on the delays to planning and construction due to negotiating Section 106 agreements.  

The first investigation, based on a Freedom of Information (FOI) survey which received responses from 208 local authorities in England and Wales, showed that, on average, councils hold £19 million in unspent Section 106 contributions. It concluded that local authorities in England and Wales are sitting on over £8 billion of infrastructure payments by developers, including over £6bn from Section 106 agreements and almost £2bn raised through the Community Infrastructure Levy (CIL).

It further reveals that London councils top the list in unspent funds.

The second investigation revealed how delays in Section 106 agreements have escalated and how these delays have impacted local communities.

“These significant contributions are rarely properly understood by the existing communities where development takes place. So often, opposition to local development is justified by concerns over strain on local infrastructure and facilities, so these agreements are a crucial part of ensuring that local communities see and feel the benefit that development brings to their area.

In recent years, the process by which these agreements are negotiated and approved has come under increasing scrutiny due to mounting delays that threaten to stall housing delivery and investment.”

The HBF investigation found that in just two years, the average time required to finalise a Section106 agreement has increased by 90 days - a 20% increase.

It points out that while there are no fixed timelines for these agreements, the current timescales are not sustainable and the process of negotiating them must be streamlined to reduce delays to housing delivery, provide greater certainty to developers and local authorities, and ensure that the associated community benefits - such as affordable housing and infrastructure - are delivered within a timely manner.

In other cases, Section 106 is not delivering community benefit because developers pull out of their funding commitments. Barely a week goes by without a story in a local community where a negotiated Section 106 commitment has been abandoned due to its adverse impact on the viability of the development, depriving residents old and new of vital community infrastructure. From Kent to Cambridge, Somerset to Shropshire, planning permission is maintained while these essential funding commitments are withdrawn.

The provision or expansion of GP surgeries in new housing developments provides an illustrative example of an unhealthy and unsustainable relationship between NHS primary care and Section 106, particularly amplified amidst the government’s ambitious housing delivery programme. I highlighted this in a blog earlier this year, citing research by the ipaper and the HBF which showed

·      the number of patients per GP has increased by more than a third in some parts of England since 2017, as residents move into new developments built without supporting infrastructure

·      Despite pleas from residents, funding for healthcare services from developers is not being spent

·      At least 17 councils had more than £1m in unused healthcare funds secured via the planning system in 2023

The issue here is not the concept of Section 106 itself, but rather the practical implementation and coordination between local authorities, NHS bodies (which have themselves shifted in structure and accountability), and developers. 

In some cases, the NHS is missing out on millions of pounds that could be made available to it through Section 106 planning contributions, according to some, and in others these funds are not available to provide care for an expanding population.  

The message to GPs on how to access Section 106 funds is also confusing and not applicable on a uniform basis. A recent article on this advising GPs stated

“If you are in an area where there are housing estates being built, the process for claiming this money is fairly easy”

And went on to explain

“when new housing estates are built, this can put further strain on healthcare facilities in the area. This may get worse given the Government is pledging 1.5 million new homes in their five-year term. Aside from that, many GP surgery buildings are already run down and need a cash injection to improve them and increase the number of clinical and admin rooms. But even with the new improved premises grants, where ICBs can offer 100% funding, there is simply not the money to keep up with the rising population. Practices in England and Wales are often unaware that a pot of money under Section 106 and the community infrastructure levy (CIL) is available for improving health facilities”

If only it were so straightforward.

But it’s in the provision of affordable housing through Section 106 that the problems are most vividly displayed. There’s either a surplus of (unused) funds or a deficit of funds which compromises viability of the development.

Earlier this year the London Assembly heard evidence on affordable housing from a group of housing providers. One stated

“Currently, the Section 106 system is kind of creaking at the seams. There is a lack of capacity from registered providers to take the number of affordable homes that are currently in the planning process. So we will be in an unusual position where developers will be building out affordable homes and there will be no one to take them.”

While Section 106 agreements have played a role in delivering affordable housing, the current challenges and criticisms highlight a need for reform and a more sustainable approach to affordable housing delivery. The financial pressures on housing associations, the management of unspent funds, and the complexities of Section 106 agreements all contribute to a situation where the system is failing to meet the needs of local communities. 

As Hollie Wright of the New Economics Foundation points out,

the existing system to fund social housing from developer contribution is too loose and needs clearer requirements and greater transparency.

New guidance from the G15 group of London’s largest housing associations provides a framework to help housing associations and developers work together to ensure Section 106 delivers affordable homes. It focuses on improved collaboration, stating

“by collaborating at pre-planning stage, any concerns about the quality and design of these properties can be addressed from the outset and together developers and social landlords can get on with the vital task of delivering more social homes.”

What if we reimagined the way developer contributions work and applied new rules and aspirations to section 106 – focusing on social determinants of health, and underpinned by health impact assessments that are based on robust data and analysis?  

As a reminder – social determinants of health, as defined and described by the WHO, are the conditions in which people are born, grow, work, live and age, and the wider forces that shape the conditions of daily life. Most of our health is determined by these non-medical root causes of ill health, which include quality education, access to nutritious food, and decent housing and working conditions.

Social determinants of health matter because addressing them not only helps prevents illness but also promotes healthy lives and equity.

Section 106, intended to provide community infrastructure, affordable housing and to mitigate impacts of development, can and should be all about this.

A starting point would be ensuring Health Impact Assessments are carried out through a uniform and robust process, that includes health bodies and community groups. Wales is already leading the way on this. Also important is the use of quality data that includes both social determinants of health as well as NHS data. This, too is becoming available.

Identifying initiatives and organisations that can improve local healthcare and also reinforce social determinants, particularly if they are community-led, would also be an effective and impactful use of Section 106 funds. Again, there are examples of this across the country.

How to best leverage Section 106 to support local health is a key focus of the Build for Health campaign, which is aiming to co design a new approach amongst industry leaders so that the Built environment sector can both set an example and press for changes in government policy where needed.

If this is something that you would like to contribute to, please get in touch.

Clare Delmar

Listen to Locals

6 June 1025