Developer let off from paying tens of thousands in financial contributions

Ted Peskett Local Democracy Reporter

A developer who is set to build over a former chapel has been let off from having to contribute tens of thousands of pounds towards affordable housing.

Plans to demolish the former Eastbrook Methodist Chapel on Chapel Row, Dinas Powys, and build a bungalow in its place were approved in November 2022.

This was subject to the developer entering into a legal agreement that would see it contribute £27,631 towards affordable housing, but after reviewing their cost budget and consulting a surveyor last year, the applicant challenged the amount.

“Uncomfortable”

Some members of the council’s planning committee were uncomfortable about letting the developer off, with one saying the local authority needs to be more “robust” when it comes to financial contributions.

However, the council concluded that the proposed financial contribution would make the development unviable after considering viability information submitted by the applicant.

Planning committee member Cllr Chris Franks who is also one of the ward members for Dinas Powys said residents will be “disappointed” with the council’s recommendation to the committee.

Legal agreements to provide financial contributions that developers enter into with councils are known as Section 106 agreements.

Section 106 money can go towards a number of things, including offsetting the impact of a development, improving infrastructure in the community and helping to develop more affordable housing.

Rising costs

Fellow committee member Cllr Nic Hodges, said: “When it comes to [Section] 106, we do tend to lose out on a number of schemes.

“Developers develop at their own risk. Our costs are constantly rising as well.”

The Plaid Cymru councillor went on to say: “It does concern me and perhaps we need to be a bit more robust about [Section] 106 requests that we legitimately make.”

Another member of the committee, Cllr Mark Wilson, agreed with Cllr Hodges, adding: “We are in a situation where… funding is incredibly tight.

“Some of [Section] 106 funds housing, funds infrastructure… and we have got to be fairly strong in terms of this and have got to be careful about any precedent here.”

A viability assessment prepared by CTD Consult states that inflation on building materials has been running at over 10% per year for the past three years.

It also notes the increased cost of fuel, power and labour, adding: “In the current turbulent climate a small development such as this will struggle to make ends meet without the unnecessary burden of a commuted sum.”

The total cost of the project, including construction costs and the land purchase, is expected to be £445,860, which is about £45,000 over the estimated sale value of the property.

Vale Council planning officer, Stephen Butler said: “We are not disagreeing with what you are saying… but the applicant has followed the due process.

“It would be very difficult for us to turn around and say we don’t agree with your figures when we do agree with the figures. ”

Another council planning officer, Ian Robinson added: “It is incredibly frustrating, but we have to have regard to the evidence.”