Council approve giving S106 money to developers

Eden council cabinet approve giving £544,000 of S106 money to developers.

The Eden Council Cabinet meeting held on the 24th of May 2022 had on its set agenda at item 7. Capital Grants for Affordable Housing Projects to approve 4 separate grant applications and recommended to full council that Capital Grants totalling £544,000 be included in the Capital Programme 2022/23 to be funded from Section 106 receipts.

The information I have received is that Eden council currently holds a pot of around £1 million in S106 contribution receipts.

The grant the cabinet were asked to consider and approve for the developers are across 4 separate grant awards of capital grants for:

£190,000 - Appleby - 19 properties.

£180,000 - Penrith - 18 properties.

£100,000 - Calthwaite - 4 properties.

£74,000 - Newbiggin - extension to 1 property.

One of the above is for a development that is almost complete and the affordable 4 homes formed part of the application and S106 in that application approved in 2017 after the original application was refused due to a lack of affordable homes included.

So now that granted planning for the included affordable homes is now asking that Eden council pays £25,000 per affordable property to make the building of them as affordable homes to the same standard as the other properties on the development that is without would have “viability issues” for the developers.

So it appears not only are S106 pledges on affordable homes in developments now used as leverage to get applications passed that often see a reduction in the actual delivered provision made.

But now we are also seeing the council pay to deliver the provision of the developers S106 planning commitments.

At the cabinet meeting held on the 24th of May 2022 I put this question to the councils portfolio holder for Housing and Health.

I wish to ask how the cabinet can consider using S106 funding to provide capital grants to developers that in some cases have made the commitment as part of planning application S106 agreements to provide affordable homes that Eden council are now subsidising it appears if the grants are approved in item 7 tonight and other grant applications also for consideration by the cabinet for developments.

That based on information received over the weekend means the applicant has no planning application put forward or approved to Eden as the planning authority and also does not own the land the grant funding is proposed for to provide properties on.

Given the governments proposed changes to S106 requirements on affordable homes would Eden not be better placed by delivering directly affordable homes potentially via the councils own Heart of Cumbria Ltd company instead of subsidising already agreed affordable homes that are part of S106 agreements and giving grants for developments not even approved for development at this time.

Answer received from the Housing and Health Portfolio Holder.

Housing Developers and Registered Providers would ordinarily ensure they have all of the necessary funding in place prior to submitting a planning application. Notwithstanding that the council could approve initial allocation of funds, but any payment would still be subject to the necessary due diligence having been completed, such as proof of land ownership, planning permission and review of the business case.

In relation to the direct delivery of affordable housing units. The work undertaken to review the Heart of Cumbria showed that direct delivery is not financially sustainable and therefore funds from section 106 more appropriately spent in partnership with those providers who are delivering in the Eden District.

The council cabinet then voted to approve the grants with all memebrs of the cabinet voting to approve them.