Seagate Homes bid to reduce £1,031,882 planning contributions for Spalding estate to £229,000

A builder could have its planning contributions slashed from more than £1million to just £225,000 if its latest application is given the green light.

Seagate Homes is trying to amend a deal which determined it should pay £806,882 towards the Spalding Western Relief Road as well as education and NHS payments on viability grounds.

The developer was asked to pay £1,031,882 in Section 106 (S106) money and build 18 affordable homes as part of a planning permission, granted in February, to build 70 homes on the Ivanda Nursery site in Monks House Lane, Spalding.

A report to South Holland District Council’s planning committee meeting tonight (Wednesday) states that the developer is able to get funding from Homes England, which is the government’s housing and regeneration agency, for 17 affordable homes and is ‘willing’ to pay £225,000 towards its contributions.

Members of the committee are recommended to approve the application but request a total of £225,000 in S106 payments - but they were advised not to proceed with a mechanism to ‘clawback’ cash once the homes are sold and warned of an ‘extremely high risk’ losing an appeal if the council asked for the full payments.

The report states: “The previous report recommended approval subject to financial contributions totalling £1,031,882 which included £561,960 towards the SWRR (Spalding Western Relief Road) Delivery Strategy, an NHS health contribution of £42,200 and an education contribution of £420,333, the viability shows that only a £225,000 contribution can be made or two or three affordable units.

“Given that the agent has offered to provide 17 affordable housing units on site, via Homes England funding (which is only payable if policy compliant affordable housing is not required via a S106 agreement), it is recommended that approval be granted subject via to a S106 agreement that provides £225,000 in total for S106 items with no requirement for affordable housing.

“It is suggested that the full NHS contribution is provided and the remainder provided to Lincolnshire County Council, split between education and a transport contribution.”

Seagate Homes viability information has been assessed by the council’s independent assessor, CPV Viability which put forward suggestions of the asking for just two or three affordable homes or £225,000 and no affordable homes.

If the committee agree, Seagate Homes would pay £46,200 for the NHS, £89,400 for education and £89,400 for the western relief road.

If councillors agree to reducing the S106 contributions, the county council could be losing out on £477,560 for the relief road.

The road project, which is due to link Pinchbeck and Spalding Common, was devised to help ease the traffic woes in Spalding as a result of the increased freight traffic with councillors looking to developers to help fund this scheme.

Work is due to finish on the northern section in the coming weeks and it will be then blocked off while highways bosses seek ‘further funding opportunities’ for the remaining sections.

The county council has objected to reducing the relief road contributions.

The report states that LCC was asked for a view on which of the CPV Viability scenarios they would prefer ‘given the evidence that £1,031,882 worth of contributions is not viable’.

It goes onto say: “They declined to express a preference and objected to the lack of a contribution; stating that it would be up to the local planning authority (SHDC) to decide and also defend an appeal if refused. They confirmed any appeal costs would not be shared.”

CPV Viability suggested a ‘clawback’ mechanism in the agreement, which meant that viability could revisited once the homes are sold, but the report states that this has not been used in South Holland in recent years.

It adds: “Given that other S106 agreements do not use this mechanism it is not recommended to proceed with this.’

Members were also advised of the ‘possible ramifications’ of refusing planning permission due to not providing the full S106 requirements. They were advised that a planning inspector would have two viability assessments to work from, the council’s and the developer’s.

The report states: “Planning inspectors have to take an evidential approach to making decisions on viability and it is extremely unlikely (and would be unprecedented) for an inspector to go against an applicant and the council’s own viability conclusions.

“In a situation like this there is a subsequently an extremely high risk of losing the appeal if council wants to retain its stance for the full policy asks and also a high risk of costs being awarded against the council if that stance was attempted.”