Indicative saving: £1.45m + costs

This greenfield site originally had permission granted on appeal in 2019 for over 60 houses and more than 15 apartments. The site was allocated in the local plan.

It was the first part of a larger site allocated in the local plan for development, which had a significant impact on discussions with the council as they did not wish to set a precedent regarding reducing planning contributions irrespective of wider policy. 

An original viability assessment had been completed by an outside party during the first permission, which made very generic, high-level, percentage-based assumptions on important elements. Such elements included external and infrastructure costs, and adopting average BCIS build costs.

We were commissioned to re-assess the scheme’s viability along with the revised application. The development’s costs were assessed in full detail through an elemental QS cost plan in line with RICS advice to provide additional accuracy. In the meantime, several considerable infrastructure costs had been identified and negotiated with the council including highway, footpath and junction improvements, and pumping stations.

The council’s initial review of our report argued that these costs should be considered ‘abnormal’ costs, had not been fully agreed and, as such, should not be taken into account from a viability perspective.

S106M therefore negotiated agreement on all other matters with the council’s consultant, reducing the areas of disagreement down to only the contested infrastructure costs before seeking to reach agreement on this final point as well.

Discussions with the council revealed that they would not approve the development with a less than policy compliant contribution regardless of the outcome of the viability assessment, due to concerns this would undermine delivery of contributions across the larger site which had been allocated in the local plan. Such an approach was clearly not compliant with CIL Reg 122.

The council were not open to a compromise situation, irrespective of the strength of the data provided, stating that if the full contribution was not agreed to then the application would be rejected. Further attempts were made to reach agreement, including offering to pay the council’s reasonable costs for further external consultancy to resolve the point. These overtures were rejected.

The council brought negotiations to an abrupt conclusion, refusing to further engage on this point and rejecting the application without addressing the outstanding issues.

The applicants moved to appeal, seeking costs on the basisof unreasonable behaviour.

S106 Management provided full summaries of discussions to date as well as appeal statements and modelling which fully supported the approach taken.

The inspector comprehensively found in favour of the applicant on all points, allowing the appeal and awarding costs against the council for unreasonable behaviour.

On the first point, the inspector made clear that abnormal costs are defined specifically by PPG, and that the proposed infrastructure did not fall within this definition.

Further they noted that such infrastructure costs were actually defined in the LPAs local plan policy as linked with delivery of other obligations and viability, and that the council had not taken their own policy into account. This is logical when one considers CIL Reg 122 on the tests for planning obligations, particularly that they must overall be reasonable in scale to the development, and directly related to the proposed development.

If considerable investment in local infrastructure is being made then the development is contributing in ways other than through affordable housing to the local community, and this must be taken into account.

The inspector therefore considered it reasonable for these costs to be included, and that an area-wide generic assumption as proposed by the council rather than a site-specific one was not robust in the face of the detailed evidence provided.

The inspector concluded that they gave great weight to the reports S106 Management provided on this basis.

And on the point about undermining wider delivery, the inspector reiterated a basic planning point which is often forgotten: that each application must be determined on its own merits, on a case-by-case basis. Therefore, on the basis of the evidence before them, the development was unviable with the proposed contributions, and thus the appeal was allowed.

This followed closely the argument originally made by S106 Management during the course of the planning application prior to rejection.

Unfortunately, because of the stance taken by the council and their conduct - both in bringing negotiations to an abrupt conclusion despite all parties previously acting collaboratively and in pre-determining against the application without regard to their wider policies - the inspector also found that unreasonable behaviour had occurred and therefore awarded full costs against the council.

See APP/B2002/W/20/3263475 for further details.

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