Clause 6 — Modification or discharge of affordable housing requirements

Part of Growth and Infrastructure Bill (Programme) (No. 2) – in the House of Commons at 6:02 pm on 17th December 2012.

Alert me about debates like this

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 6:02 pm, 17th December 2012

I am sorry to have to remind the right hon. Gentleman that it is his Government who have been in office for the past two and half years, over which time the economy, at the very best, has been grinding along on the bottom as the result of his party’s mismanagement of it. I do not, however, intend to go down that route. I want to return to a policy that has received widespread support from Members of all parties, including some of his hon. Friends, who have specifically welcomed my amendment. I hope that after he has listened more to my argument, he will recognise that there is logic to the amendment.

The exceptions policy has evolved to meet special needs without opening the floodgates to more indiscriminate development, which would have otherwise happened because the areas concerned are often highly attractive and desirable areas where there would be considerable financial return from building commercial housing.

Hastoe Housing Association is probably the specialist body in this field and its chief executive, Sue Chalkley, joined me and a number of other experts to talk to the Minister about the issue. I am extremely grateful to him for making time available to hear our case and hope he was persuaded by it. Hastoe describes its role as

“a rural specialist housing association” that has

“developed affordable homes for local people in more than 200 villages across the south of England. Most of these schemes are on Rural Exception Sites.”

Its briefing goes on to explain how the process works:

“The Parish Council approaches us for assistance because they have identified that local people need affordable housing. We arrange a housing needs survey to evidence the need. We then walk around the village, with the Parish Council and planners, to identify site options.

The sites are very often just outside the village envelope and are usually, but not always, farm land. They are ‘exception sites’”,

as defined by the national planning policy framework. The briefing continues:

“We agree the preferred site with the Parish Council and planners and discussions are held with the landowner about purchase.”

The following is the crucial part:

“The price for an ‘exception’ site is an enhanced agricultural value, averaging £8,000 per plot.

Tenures can be affordable rent or shared ownership. Shared owners cannot buy more than 80% of the equity, so the homes remain affordable for future, generally local, purchasers.

The NPPF allows a small number of market sale homes on exception sites to help the financial viability of schemes where grant subsidy is limited.

The S106 agreement provides landowners and communities with confidence about the future use of the land; that it will always be prioritised for local people and always retained as affordable housing.

The delivery of new homes on exception sites requires willing landowners and willing communities. There are often only one or two landowners in rural communities and, without their co-operation, no homes will be built. We need their co-operation.”

Sue Chalkley stresses that the process gives confidence to all parties that such homes will for ever be kept available for the need for which they were developed, and will not simply become market housing by the back door. The section 106 agreement is crucial to that process. Without it, landowners are inevitably reluctant to provide land, because they can see the risk that sites that they sell substantially below open market value—I have quoted the figure of £8,000 for enhanced agricultural value—might produce a windfall gain to some future occupier who is fortunate enough to find that the property is saleable on the open market. That is the first problem.

The second problem is that communities that have agreed to an element of affordable housing on the basis that it is for people in need would be horrified if the policy could be subverted and the properties could become available as open market homes, rather than be used for the specific needs for which they were approved. Landowners and communities would have a crisis of confidence in the policy if clause 6 was passed unamended.

In Committee, I gave the Minister one example of how the policy could be subverted, but I have now highlighted a number of other ways. The first example that I quoted was an individual working in forestry in a national park being helped by a national park authority to get permission for an individual, self-built home for his needs. If that individual received consent for an exceptions home, but it subsequently became unviable because the builders’ prices had gone up or because he could not get a loan from the bank because of the mortgage difficulties that Mr Redwood mentioned, he could say that it was no longer viable to proceed with the development as agreed. Under the provisions of clause 6, he would be entitled to ask the planning authority—in this case it would be the national park authority—to reconsider the section 106 agreement because it was no longer viable to proceed with building the home.

The legislation gives no let out. It does not allow the planning authority to consider the wider social impacts or the needs of the community. It simply requires it to look at financial viability. If the argument is a sound one—and in the scenario that I have quoted it is—the planning authority will ultimately have to say that the person has a strong case. However, it might decide to refuse the request because if it agreed, it would subvert the exceptions policy and destroy the confidence of local people in it, meaning that landowners would no longer provide land for such developments and local communities would no longer agree to them.

Then, of course, the next ghastly consequence of the clause bites, because at that point the decision is referred to the Planning Inspectorate, which has a remit to consider only viability. It does not have a remit to consider whether a development is desirable, whether it would subvert the exceptions policy, or whether it would result in inappropriate development in a national park or area of outstanding natural beauty. It is required to look only at viability. If it does so on the terms that I have described, it will inevitably find that the section 106 agreement has to be amended or set aside because it prevents viability.

At the moment when the first of those decisions is taken, the rural exceptions policy is dead, because shockwaves will go around the country rapidly and word will get around that this policy that has worked for 25 years; that has helped to secure housing in loads of areas for people in need; that has kept communities together; and that has given employment opportunities to people who need to work on a relatively low wage in such areas is no longer viable because people can no longer be confident that a section 106 agreement will bite and will remain in force. That is the terrible consequence of the Bill.

Amendment 4 is very modest. The Minister knows that its purpose is very limited. It is restricted to excepting four circumstances from the general impact of clause 6. It would exclude developments in national parks, in areas of outstanding natural beauty and in rural areas where the exceptions policy applies, as defined by section 157 of the Housing Act 1985. As a result of my discussion with the Minister, I have added a fourth circumstance: developments approved subject to neighbourhood development orders. In the course of our conversation, it became clear that some communities that are considering neighbourhood plans may well give consent to a development on the basis that it is affordable and would not want that to be subverted by the viability test in clause 6.

My amendments are tightly defined and would safeguard a policy that has been hugely successful and that is subscribed to by parties across the House. If they are accepted, there will be a huge sigh of relief in many rural communities that are rightly concerned that the Bill will subvert something that is of value to them and to people in housing need. I hope that the Minister is persuaded by the evidence that he heard from the people I brought to see him and by the logic of the amendments, and will feel free to support them tonight.