Source · Select Committees · Public Accounts Committee
Recommendation 22
22
Accepted
Restrict developer renegotiation of Section 106 contributions to exceptional circumstances only
Recommendation
There is an asymmetry of skills, capacity and resources between LPAs and developers that means LPAs often struggle to challenge developers’ claims in viability assessments. Additionally, land values vary significantly across the country, so in some local areas, particularly less affluent areas, developers can argue that sites are not viable. Viability assessments are 28 Qq 44–45 29 Letter from the Permanent Secretary, 9 July 2025 30 C&AG’s Report, paras 2.9, 2.10 31 Letter from the Permanent Secretary, 9 July 2025 13 known to be difficult for LPAs to challenge as they are not transparent, and as a result, LPAs do not know if costs included by developers are realistic and reasonable.32 Sometimes developers will renegotiate their contributions with the LPA in the middle of a development using viability arguments as way to reduce their Section 106 contributions. This should be restricted to exceptional circumstances.
Government Response Summary
The government agreed to consult on a revised National Planning Policy Framework and publish updates to viability planning practice guidance by Summer 2026. The existing PPG already states that the role for viability assessment is primarily at the plan making stage.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2026 5.2 The government will be consulting on a revised National Planning Policy Framework before the end of this year. The government intends to publish updates to viability planning practice guidance (PPG) alongside the consultation and seek views on where further changes should be made to support revised policy. 5.3 The government’s existing PPG on viability is already clear that the role for viability assessment is primarily at the plan making stage. It is up to applicants to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. Such circumstances could include, for example, where development is proposed on unallocated sites of a wholly different type to those used in viability assessment that informed the plan; where further information on infrastructure or site costs is required; where particular types of development are proposed that may significantly vary from standard models of development for sale (for example build to rent or housing for older people); or where a recession or similar significant economic changes have occurred since the plan was brought into force.