‘Secrecy on one-sided deal with developers need serious review’

Brian O'Connell said it was not up to them to dictate a developer's profit margin in the same way they cant go down to Sainsburys and tell them how much to sell a packet of crisps for. A single packet of Walkers crisps from Sainsbury's in Horsham is 55p. SUS-160513-152159001
Brian O'Connell said it was not up to them to dictate a developer's profit margin in the same way they cant go down to Sainsburys and tell them how much to sell a packet of crisps for. A single packet of Walkers crisps from Sainsbury's in Horsham is 55p. SUS-160513-152159001
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A review of developer contributions has not addressed the council’s ‘failure’ to secure adequate infrastructure funding from the two West of Horsham developments, one resident has suggested.

Horsham District Council’s business improvement working group (BIWG) has published its final report into section 106 legal agreements, which are signed with developers when planning applications are approved, explaining the full process and at what stages councillors are involved.

Community campaigner Paul Kornycky. Pic Steve Robards SR1521917 SUS-150915-131927001

Community campaigner Paul Kornycky. Pic Steve Robards SR1521917 SUS-150915-131927001

Although HDC has affordable housing targets, developers often submit applications below these along with viability assessments, with the report noting a ‘perceived lack of consistency and transparency’ regarding the negotiation and agreement of current section 106 agreements on major projects in the last few years.

West Sussex County Council revealed back in 2014 there was a £14.5m gap between agreed funding and the total cost of the identified infrastructure package for the two housing schemes either side of the A24 at Wickhurst Green and Highwood.

Rudgwick resident Paul Kornycky, who has previously claimed that the original viability appraisal on Wickhurst Green understated the development’s Gross Development Value (GDV) by £6.35m but something the council has disputed, criticised the report when it was presented to HDC’s scrutiny and overview committee on Monday May 9.

He said the report had excellent recommendations to achieve better member involvement in the section 106 process, but challenged indications that the complexity and commercial sensitivity of the viability submissions precluded extensive scrutiny.

Brian O'Connell

Brian O'Connell

He described how the Wickhurst Green development’s clawback mechanism was ‘sloppily worded and frankly isn’t working’, pointing out that as of the last quarterly declaration in June 2015 the developer had received an extra £11m in GDV but also ‘declared nil overage and consequently paid us [the council] absolutely zilch’.

He added: “HDC has spent almost two years reluctantly drip-feeding me information about this one-sided deal. This secrecy is absolutely not how it should be done and needs serious review.”

He asked members of the scrutiny committee to reject the report’s assertion that ‘there have been no serious avoidable flaws and so commission further work’.

In response Brian O’Connell (Con, Henfield), chairman of the working group, said: “With regards to West of Horsham the best provision was secured that was possible at the time.”

He explained that the council had put a clawback mechanism in the legal agreement if the developer made additional profit which would go towards affordable housing provision.

He added: “There’s no secrecy when dealing with the viability assessments.

“Any viability assessment that is received is part of a planning application is fully and robustly reviewed by viability experts and queried where appropriate.

“This approach is fully in accordance with local and national planning policy.”

Mr O’Connell explained that they had looked at the idea of councillors sitting in on negotiations between developers and officers but this had been vetoed by the legal department, and he assured councillors ‘there’s nobody trying to keep any information from you’.

He hoped the report had ‘taken this veil of secrecy away and a lot of it was down to a lack of knowledge by members’, while figures being publicly available was something for the legal team to determine.

But he also stressed it was not up to councillors to dictate developers’ profit margin in the same way they ‘can’t go down to Sainsbury’s and tell them how much to sell a packet of crisps for’.

He continued: “That’s not to say it was all perfect in the past. We did not achieve what we could have done.”

After the meeting Mr Kornycky said the report had not addressed the council’s ‘failure’ to secure adequate infrastructure funding when it granted permission for the two housing schemes, and explained how he had asked for the unredacted information regarding the West of Horsham viability assessments, but was told he could not have them as they were commercially sensitive.

When he appealed the decision, he was then told HDC did not actually have copies.

Last week a spokesman for the council said: “Senior officers continue to work closely with Countryside Properties [the developers behind the Wickhurst Green development] and we have so far received figures to mid-June 2015. We are expecting to receive further figures, to the end of March 2016, later this week.

“With regards to the disclosure of information, all requests for information are addressed fairly and properly and within the Freedom of Information legislation. As has been previously stated, we do not have unredacted versions of viability information on both West of Horsham developments.

Meanwhile HDC is currently consulting on its Community Infrastructure Levy (CIL) Draft Charging Schedule.

CIL is set at a rate per square metre of residential development, and will in part replace planning obligations through Section 106 contributions and help fund infrastructure required to deliver new development across the district.

However the proposed North Horsham development north of the A264 has CIL set at nil as contributions towards infrastructure and affordable housing are due to be secured through section 106 agreements when a planning application for the site is submitted.

The deadline for comments is 5pm on Friday June 17, which can be emailed to strategic.planning@horsham.gov.uk or sent to: Strategic Planning Team, Parkside, Chart Way, Horsham, RH12 1RL.

To comment online visit HDC’s website.

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