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Contributions promised by builders
have dried up Lubbesthorpe New
Town -
Source
Leicester Mercury 22/02/2010
Leicestershire
community to miss out on payments from developers
Millions of pounds earmarked for community projects in Leicestershire
may never be paid.
Contributions promised to councils by house builders have dried
up because of the economic downturn.
Some companies have collapsed while others
are calling on councils to be excused from paying for play equipment,
transport benefits and community facilities.
They say projects will not be worth building
if all the profit is taken by payments under Section 106 agreements
which are imposed so that the builders will pay for facilities
needed by the people moving into the new homes.
(Section 106
(S106) of the Town and Country Planning Act 1990 allows a local
planning authority (LPA) to enter into a legally-binding agreement
or planning obligation with a landowner in association with
the granting of planning permission. The obligation is termed
a Section 106 Agreement.
These agreements are a way of delivering
or addressing matters that are necessary to make a development
acceptable in planning terms. They are increasingly used to
support the provision of services and infrastructure, such as
highways, recreational facilities, education, health and affordable
housing.)
County councillor Kevin Feltham said:
"Hundreds of thousands of pounds promised for community
facilities in my area will not be paid because of the current
climate. It could well run into millions in Leicestershire when
it is totalled."
He said: "Kibworth was promised
a six figure sum in return for a major house building project.
But progress on the site has been very slow and the payments,
which come due when houses are completed and occupied, may be
delayed for several years making it difficult, if not impossible,
to produce local plans to spend the money."
Harborough District Council has adopted a formula so that Section
106 payments can be waived or reduced in future.
It is calculated on developers making
a 15% profit before demands are made. Vice chairman of the Melton
Borough Council development committee Councillor Pru Chandler
said: "I wonder if the system is workable at this present
time. We have earmarked an area of land north of Melton for
1,000 homes.
"As part of government guidance,
40% have to be "affordable". That means if the builder
has to contribute to community facilities in Section 106 payments
that will fall on the 60% of homes which will have to be that
more expensive to make it viable."
Planning officers at Blaby district
council and Hinckley and Bosworth Borough Council have urged
a relaxation of the payments for community facilities.
Home Builders Federation spokesman Steve
Turner said: "Local councils have to be realistic of what
is affordable these days. In many cases demands for community
payments for education, playgrounds and transport and obligations
to provide affordable housing, make projects simply unviable.
"We are having companies walking
away from projects simply because it makes no financial sense
to continue because of the hefty demands from councils. "That
leaves much needed housing not being built."
Comments (1)
As a council taxpayer I am deeply concerned that Harborough
District Council in particular as well as other councils are
experiencing difficulties in obtaining monies owed under 'Section
106' agreements.
What is the point of having these
agreements? Some developers are awash with money other companies
have changed hands for astonishing amounts and these debts should
not be written off. I appreciate do go under in recessionary
times but, please, don't be too quick to let them off the hook!!
David Hankey, Great Easton, Leics.
Area "
C " covers the area south of Forest House
Lane Beggars Lane, to the M69 to the south and the M1 to the east
You can view the 58 page report by following
this link to the Blaby District Council web site
>> Blaby
District Council Local Development Framework - Core Strategy
Draft Submission (version 2) <<
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