The affordable housing inquiry asked Robin Tetlow what he thought of section 106. Here's what he told them
I was recently summoned at short notice to give planning evidence to the Office of the Deputy Prime Minister's House of Commons select committee inquiry into affordable housing.

The fundamental questions the committee was seeking to answer were:

  • how successful has the section 106 agreement system been in securing additional affordable housing provision?
  • why has the system not been more successful?
  • how can the system be made more successful?
  • what is the unmet potential?

The answer to the first question has largely been provided by the just-published Joseph Rowntree Foundation report Planning Gain and Affordable Housing. Essentially, about 12,000 dwellings are being delivered each year but, significantly, of these, about 8000 homes have included at least some element of public subsidy, leaving only 4000 homes wholly additional to the mainstream programme.

As an alternative to public investment, the system can only be regarded as a failure; but it has proved a useful supplement, levering in additional subsidy and development opportunities as well as helping to create a better social mix within new housing developments.

So, on to question two: why the system has not been more successful. There are three main reasons.

One, local authorities as corporate entities have not used the tools available to them with sufficient rigour and determination and affordable housing has often not been given priority relative to competing planning gains.

Two, local authorities have lacked the necessary resources, negotiating skills and enabling culture to achieve optimum outcomes.

And three, there is lack of up-to-date, clear and practical national guidance to planning and housing authorities.

With those facts in mind then, let's look at question three: what can be done to make the system more successful?

It would be an important start for every local authority to have an up-to-date local plan and a recent, comprehensive and continuously updated housing needs assessment.

It would also help if both planning and housing authorities were given a clear statutory purpose to enable the provision of affordable housing – an entirely feasible suggestion, in view of impending housing and planning legislation. This needs to be complemented by actual joint working between planning and housing authorities, backed by appropriate supplementary planning guidance.

Last, but not least, there needs to be clearer government advice on the definition of affordable housing and a more flexible approach towards fixing lower site size thresholds.

What, then, is the unmet potential?

To begin with, it should be emphasised that there is a total underprovision of new housing which is impinging upon both affordable housing needs and the ability to deliver new affordable housing.

Furthermore, most affordable housing provision has to be provided within current planning allocations – housing associations are experiencing increasing difficulties in finding sites for traditional 100% affordable schemes. The indications are that the level of section 106 contributions must increase if the present level of affordable housing is to be maintained, let alone increased.

The select committee has apparently accepted the Alan Holmans estimate that about 80,000 affordable homes each year are required across England. Including all sources of provision, the current level of development is running at about half that.

I advised the select committee that it should be possible to double the existing level of section 106 provision over the next five years from 12,000 homes a year to at least 25,000. If this were to happen, and direct provision by registered social landlords were to remain constant, there would still be a shortfall of 24,000.

There are other significant caveats, too. First, bearing in mind the emphasis on difficult brownfield sites, it is unlikely the one-third proportion of schemes developed without public subsidy will increase significantly. Second, this will bring into greater relief the issue of sychronising funding with opportunities.

The planning system is hugely significant to the delivery of every new affordable home. The section 106 system will inevitably become more significant as a means of enabling delivery, but this cannot distract from the fundamental issue of providing sufficient public funding – in the right place at the right time.