Medway Developer Contributions and Obligations Guide

The Viability Assessment underpinning the emerging local plan bases its findings on the approved Medway Guide to Contributions and Obligations (paragraph 1.2.2) and it is evident that for "non strategic sites" excluding health contributions and offsite highway works this amounts to £17,000 per dwelling (paragraph 2.8.1). The health contribution that is set out in the approved Medway Developer Guide is £901.72 per unit. The education and health contributions as outlined in this current consultation significantly increase above the approved figures that the local plan strategy has used as its evidence base. This is not appropriate at this stage of the local plan i.e post submission. The proposed contribution increases outlined in this consultation for health and education from that which is set out in the approved Medway Contributions Guide, will alone increase the per dwelling S106 costs from circa £17,000 to circa £31,000 per unit. This significant circa £14,000 increase per dwelling is not accounted for in the Viability Assessment report that underpins the emerging local plan which, accounting for its strategic scale, already proposes to increase the S106 costs from the Capstone Valley allocation to £21,131 per dwelling as outlined at Page 199 of the Infrastructure Delivery Plan . These additional costs are not accounted for in either the Promoter's, nor Medway Council's own viability evidence base. This threatens scheme viability and delivery that is already stretched because of rising construction costs and general market concerns about sales values. These factors combined with proposed changes to the affordable tenure split to increase the percentage of social rent as well as the 5% increase in overall affordable provision also has added collective impacts by placing greater pressure on the delivery of housing in Medway for both affordable and open market provision. For this reason whilst the tenure mix and increase in overall affordable quantum by 5% has been accounted for in the evidence base in the Viability Assessment the proposed significant health and education contribution increases, the subject of this consultation, have not and these changes are not justified. Paragraph 2.8.3 of the Infrastructure Delivery Plan states that the Kent and Medway ICB will request contributions on a "case by case" basis. Medway's Viability Assessment also acknowledges that the Kent and Medway ICB are undertaking a review of local plan growth. Until these plans are understood and the evidence evaluated, the proposed health contributions levied per dwelling should continue to be maintained as set out in the Medway Guide (and used as part of the local plan evidence base to date) namely £901.72 per dwelling as a maximum, if applicable after accounting for the bespoke health infrastructure that will be deliverd by the strategic sites including the Capstone Valley allocation. For Education, Medway's IDP quantifies the total education funding required for planned infrastructure and suggests that the approved Medway Developer Guide contribution will deliver circa 50% of the required funding. However the "funding solution" should not be to load this funding shortfall on the Promoter, before other funding solutions are explored or planned educational infrastructure is reassessed or re-costed. This is critical because the Viability Assessment which underpins the submitted local plan does not take account of the increased education costs which are significant and threaten deliverability of the wider Capstone policy allocation requirements. For this reason the education contributions should revert to the approved Medway Guide to Development Contributions.

It is accepted that clear guidance should be provided on affordable housing provision so it can be accounted for in the calculation of land value. However, the cumulative impact of affordable on viability must also be taken into account with other planned increases in development costs including education and health contributions as outlined in this consultation. These two increases from that which is set out in the approved Medway Contributions Guide will alone increase the per dwelling S106 costs from circa £17,000 to circa £31,000 per unit. This significant circa £14,000 increase per dwelling is not accounted for in the Viability Assessment report that underpins the emerging local plan which already proposes to increase the S106 costs from the Capstone Valley allocation to £21,131 per dwelling. It is therefore important for policy makesr to appreciate that S106 contribution increases more generally together with proposed changes to the affordable tenure split to increase the percentage of social rent as well as the 5% increase in overall affordable provision has collective impacts by placing greater pressure on the delivery of housing in Medway for both affordable and open market provision. For this reason whilst the tenure mix and increase in overall affordable quantum by 5% has been accounted for in the evidence base in the Viability Assessment the proposed significant health and education contribution increases, the subject of this consultation, have not and this threatens plan housing delivery of which affordable is a part. The proposed health and education contribution increases of circa £14,000 per dwelling must be considered having regard to this wider context.