My Lords, the noble Lord, Lord Young, has given me yet another argument for why we should reject Clause 143. Amendment 102B is in my name and those of the noble Baroness, Lady Parminter, the noble Lord, Lord Best, and the right reverend Prelate the Bishop of St Albans. It also has the support of my noble friend Lady Warwick, chair of the National Housing Federation, who cannot be in her place today. I also declare my intention to oppose the Question that Clause 143 stand part of the Bill.
In rural areas, housing associations build good-quality small-scale developments in partnership with local communities, providing much-needed affordable homes. Of the 281 homes built in four years by Two Rivers Housing in Herefordshire and the Forest of Dean, 109 were delivered through Section 106 agreements, many on small sites of fewer than 10 units. For Two Rivers, as for so many housing associations, Section 106 is critical to the delivery of affordable homes.
Yet in 2014, the Government attempted to exempt developments of 10 homes or fewer from having affordable housing contributions levied on them. The Rural Housing Policy Review recommended that the Government’s policy on small sites should be reversed and:
“Local Planning Authorities should require all sites, whatever their size, to make an affordable housing contribution”.
It was, of course, absolutely right. There is clear evidence —for example, from the Gloucestershire Rural Housing Partnership—that when the Government removed the threshold, opportunities to deliver much-needed affordable homes in small communities were lost.
Several councils took the Government to court and won, overturning the policy change. There was a huge sigh of relief, but the Government now appear to be giving themselves the power to make this change through Clause 143 of this Bill. Clause 143 gives the Secretary of State the power to impose restrictions,
“on the enforceability of planning obligations entered into with regard to … affordable housing”.
It gives the Secretary of State the legal power to make the change in relation to small sites and affordable housing contributions. The clause should be deleted.
Indeed, Clause 143 is simply not needed because the NPPF already requires that LPAs meet their objectively assessed needs for a range of housing and set contributions which mean that schemes are viable and deliverable. The policies already respond to local circumstances, such as the land supply and the local housing market, which the Secretary of State is simply not in a position to second-guess. Overruling these local policies would have a devastating impact on the delivery of affordable homes in rural areas, where sites of fewer than 10 units are the main source of development land. Last year, these small sites provided well over 50% of new affordable homes in communities with a population of less than 3,000.
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The Government sometimes say that their action is necessary to support SME builders. My Lords, we all support these small builders, who provide jobs and homes in rural communities, but the main challenges they face are access to land and finance, not the need to provide affordable housing.
Clause 143 would also have an impact on the provision of homes on rural exception sites. On very small sites, LPAs will often take a commuted sum in place of affordable homes. This is a critical source of capital funding for affordable homes on rural exception sites where income does not meet building costs. Commuted sums fill this funding gap and without them many of the schemes would not be built.
Amendment 102B would enable local authorities to require developments of sites of 10 homes or fewer in rural areas to make a contribution to affordable housing. The resulting protection is necessary for the sustainability of rural communities. It would also put localism back at the heart of housing policy in these communities. I firmly believe that local authorities should be able to set and negotiate the level of affordable housing contribution on individual sites to reflect local need. Without the amendment there is a real danger that action by the Secretary of State would result in the loss of all the routes by which rural homes are built.