THE section 106 agreement has never been particularly popular with the development community.
Introduced in practice more than 30 years ago to ensure that local authorities were not burdened with funding infrastructure costs arising from commercial development projects, the Section 106 has evolved over the past three decades to cover an assortment of civic improvements.
Taken at face value the Section 106 agreement has much to commend it; if a new housing scheme is going to make the developer untold wealth then it is almost certainly right that they pick up some of the tab for the additional facilities needed to service the increased population attracted to the new development.
But while there has long been a general acceptance that the Section 106 agreement, or Section 52 as it was before the 1990 Town and Country Planning Act, was a relatively fair way of preventing private developers making hay at the expense of the taxpayer, there is a suspicion that as local authorities become more savvy they are using the agreements to extract funding that goes beyond the “Needs directly generated by the development” as stipulated by the act.
During the boom years the development community has privately muttered its discontent but generally kept its counsel as the margins were still sufficiently thick to cushion even the most swingeing 106 demands.
But as developers feel the full force of the credit crunch and tumbling land and property prices, their patience with what they feel is an unnecessary burden is beginning to wear thin.
They may well have a point. Looking at the example of Sutton Coldfield one wonders how £300,000 of improvements to Sutton Park addresses the “needs directly generated” by a town centre apartment block? Admittedly the apartment block will bring more people to Sutton but it is a significant leap to claim that the improvements are a direct necessity of the development.
The fact that these improvements are still legally binding despite the fact that the development in question has gone bust is even more perverse.
As the city council has often proclaimed, successful development and regeneration is a key indicator of the health of our city and at the moment they need all the help they can get. Section 106 agreements are here to stay and rightly so but unnecessary intransigence and putting their importance ahead of the success of a development itself can only be bad for Birmingham.