Rowntree report slams government on planning gain

The government got a clear message today that it must keep its promises on planning after a highly critical report said planning gain resulted in only one in 10 housing completions being affordable.

The report, published today by the Joseph Rowntree Foundation, concludes that the growing use of section 106 agreements has "done little to raise the total number of affordable homes being provided".

It argues that although 12,000 such homes are built each year, 70% are funded by social housing grant – money that would already have been provided by the Housing Corporation.

Controversial proposals to replace section 106 with tariffs were dropped in the summer.

A spokesman for the Office of the Deputy Prime Minister said it was conducting a review of circulars 197 and 698, which relate to affordable housing, with the aim of announcing a bill in the Queen's speech in November.

He said the government had no official targets for homes to be delivered by section 106 agreements, but admitted: "Even our best estimates show we are falling short of the number of affordable homes needed."

Jon Watson, director of business strategy at registered social landlord the Home Group, said: "Section 106 has improved land supply and given more mixed tenure, but at the price of incredibly complexity in administration. The fundamental requirement [of section 106] is clarity, so that all parties know what they have to deliver."

One of the points made in the foundation's report, conducted by the Universities of Sheffield and Cambridge, is that the overall policy of planning gain requires clarification.

Robin Tetlow, managing director of planning consultant Tetlow King, said: "It is astonishing to see the different agreements that one authority can come up with for section 106 schemes that are only slightly different."

Marcus Keys, business innovation manager at housebuilder Lovell, said: "The lack of affordable housing through section 106 is due to the number of small sites on the market." He said if the government lowered thresholds, developers could refuse to build, stockpiling land while they waited for another policy shift.