While much of the media coverage of the government’s planning reform proposals have understandably focused on what they mean for affordable housing, they will have a significant impact on how apprenticeship and skills support is funded as well. It is vital that the government factors this into its reforms.
In August, the Government launched a consultation on the Planning for the future white paper focused on reform of the planning system. The paper includes plans to replace two key sources of local government funding – the Community Infrastructure Levy (CIL) and Section 106 (S106) planning obligations – with a nationally-set flat rate charge known as the Infrastructure Levy. CIL and S106 raised £7 billion in contributions from developers for local authorities in 2018/19 nationally, with London developments accounting for 28% of these contributions. (MHCLG, 2020)
Section 106 agreements are negotiated between Local Planning Authorities and developers who are seeking planning permission for new developments. Clauses in the agreements are used by planning officials to make developments ‘acceptable’ in planning terms. This could be things like stipulating a percentage of new housing developments that will be affordable homes, preventing the land from being used for certain purposes, or requiring developer payment contributions to the local authority.
Many organisations have expressed concern that scrapping the CIL and Section 106 and replacing them with a nationally-set flat rate could put the delivery of affordable housing at risk. (FT 2020, The Observer 2020, Inside Housing 2020). But there has been little discussion of the risk the reforms could have for apprenticeship and employment delivery.
Local authorities regularly use Section 106 agreements to improve employment prospects and provide opportunities in their area. Common obligations for developers include hiring a certain number of apprentices, requiring a percentage of workers to be local residents, or for developers to make payment contributions to skills and employment schemes and initiatives.
CLF’s boroughs make good use of Section 106 agreements to improve local employment. Haringey for instance currently have 30 sites which are required to have 20% of their peak workforce be Haringey residents and provide 1 apprenticeship per £3 million of development cost (Haringey, 2018). In Camden, Section 106 spend on local employment initiatives such as King’s Cross Recruit and King’s Cross Construction Skills helped in 2018/19 support 228 local people into apprenticeships, and a further 128 local people into construction jobs (Camden, 2019). The Elephant Park development in Southwark is employing over 1500 local people, and a Construction Skills Centre established jointly by developer’s Lendlease and Southwark trains over 2000 people per year. (Lendlease, 2020). Southwark require one new apprentice or in-work NVQ per each 2000sqm on developments 5000sqm or more. (Southwark, 2015)
There is a risk that changes to Section 106 might jeopardise local authorities’ ability to support employment in their areas. Currently the government’s planning paper focuses solely on the use of Section 106 as a means to raise developer contributions and there is no reference to its use by skills and employment teams. The government needs to provide more clarity on this.
A reduction in apprenticeship and employment opportunities would be especially unwelcome in the current context. The impact of coronavirus has meant there have been 38,110 fewer apprenticeship starts between March and June this year than last year (DfE, 2020) and the Sutton Trust reported 31% of organisations surveyed would be likely to hire fewer or no apprentices over the next year (Sutton Trust, 2020). Section 106 can be used by local authorities to proactively tackle unemployment.
Central Government must rethink their approach to Section 106 and the CIL in the new proposals. The use of Section 106 as a tool for contributing to skills and employment is invaluable and helps local authorities harness the social value of new developments. Any process that replaces it must meet or exceed the current amount of money raised for our councils. The proposed levy must also not preclude local authorities’ ability to obligate developers to provide employment opportunities such as apprenticeships through Section 106. These are vital for helping people into good work.
Chris Haley, 30th September 2020