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Pickles: Councils already cutting affordable homes through 106s

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Pickles: Councils already cutting affordable homes through 106s

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Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Pickles dismisses ‘fantasy’ section 106 figures Pickles dismisses ‘fantasy’ section 106 figures

Communities secretary Eric Pickles has dismissed fears that 35,000 affordable houses will be lost through the changes to section 106 agreements, adding that current renegotiations are seeing councils reduce obligations from 30% to 26%.

The Government is intending to allow developers to appeal the affordable housing element of section 106s – which places obligations on developers to deliver affordable housing – where they claim that schemes are rendered unviable. The measure was announced by the Government in a special housing and growth package in September.

To offset the loss of affordable homes it pledged to invest a further £300m to deliver an additional 15,000 affordable homes and bring 5,000 empty homes back into use. This funding, it said, will be made available alongside a £10bn loan guarantee for housing associations which aims to reduce the cost of borrowing.

The Government has also announced a team of expert brokers – offering a free-of-charge advice and support service to councils and developers – to help kick-start renegotiations of section 106s. They have begun work immediately with an initial wave of councils.

Mr Pickles was asked in the House of Commons yesterday by Labour MP for Easington, Grahame Morris, whether he accepted the view of National Housing Federation (NHF) chief David Orr who feared the abolition of section 106 agreements was likely to cost the country 35,000 affordable houses each and every year.

Mr Orr was in discussion with senior ministers, special advisors and key officials right up to the final hours before the announcement was made by the Government in early September.  In particular, he made the case that the abolition of Section 106s would “wipe out at a stroke 35,000 affordable homes a year”. It's understood that the Government was at one time considering the complete abolition of affordable housing through 106s and that renegotiation was a last minute concession won by the housing sector.

Mr Pickles said: “The truth is that 41% of local authorities have already started these negotiations. That is one of the reasons why we have seen the number of houses start to increase. Eighty per cent of authorities are willing to negotiate. Some lack the skills and experience to do so. We are willing to help there, but the truth is that, if we have a 50% target and nothing is built, 50% of nothing is nothing. The idea is to move things on. We have found in the negotiations that, rather than have a 30% target, many authorities have dropped to 26%. Many have managed a little higher than that, but they have shown flexibility to get the whole process moving.”

Liberal democrat MP for Bermondsey and Old Southwark, Simon Hughes, asked Pickles to ensure there is a much more transparent check on what developers say is “economically viable”.

He said: “Our experience on the south bank is that they say certain things are not economically viable. They then build the housing and flog it off at higher prices that were not revealed at the beginning.”

Pickles added: “Of course this is not going to be done on the basis of a developer’s word—developers will have to demonstrate clearly to an inspector that the current targets are uneconomic. I believe that we will get more social houses built because of this measure and I believe that we will have more affordable houses. We have put additional sums in, as my right hon. Friend will recall, and fairly soon the schemes will be going out to tender.”

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