Section 106: Unlocking development or holding Birmingham back?

Why it matters

There was no dispute around the purpose of Section 106 agreements. They exist to ensure that new developments contribute to the local community, whether by funding infrastructure improvements, affordable housing, or community facilities. In principle, this is both fair and necessary – development should enhance, not strain, the areas in which it takes place.

However, the process of negotiating Section 106 agreements is where the frustration lies. Attendees shared their experiences of agreements being renegotiated late in the planning process, or expectations shifting unexpectedly between pre-application discussions and final approvals. This uncertainty creates both financial risk and delays that make Birmingham less attractive to investors when compared with more streamlined processes elsewhere.

Inconsistency across local authorities

One point raised repeatedly was the lack of consistency in Section 106 expectations across different local authorities within the region. In some cases, attendees noted, the approach can feel ad hoc, with requirements varying not just between councils, but between individual schemes within the same council area.

This makes it difficult for developers – and those providing funding – to confidently model costs and assess viability at the outset. For lenders, this uncertainty increases risk, making some projects harder to finance and ultimately slows down delivery of much-needed homes and commercial space.

Inconsistency across local authorities

One point repeatedly raised was the lack of consistency in Section 106 expectations across different local authorities within the region. In some cases, attendees noted, the approach can feel ad hoc, with requirements varying between councils and individual schemes within the same council area. 

This makes it difficult for developers and those providing funding to confidently model costs and assess viability at the outset. For lenders, this uncertainty increases risk, making some projects harder to finance and ultimately slows down the delivery of much-needed homes and commercial space.

Finding the balance between flexibility and certainty

Of course, flexibility in Section 106 negotiations is sometimes necessary, especially in uncertain economic times. Development viability can change due to rising construction costs or shifting market conditions, and local authorities understandably want to secure the best outcomes for their communities.

However, as highlighted during the discussion, too much flexibility creates unpredictability, making it difficult for developers to commit confidently to projects. Attendees agreed that the key to a better system lies in finding the right balance – allowing for some flexibility, but underpinned by clearer initial guidance, better communication, and a stronger commitment to consistency across local authority teams.

Why this matters for Birmingham's future

The sentiment among attending property experts and professionals was clear – Birmingham has huge potential, but if the city wants to attract more investment and accelerate delivery, fixing Section 106 will need to be part of the solution. 

Section 106 may sound like technical detail, but it plays a critical role in shaping the future of Birmingham’s build environment. When the process works well, it ensures high-quality development that benefits investors and the community. When it does not, it creates delay, risk, and reputational damage that can deter future investment. 

1. Upfront clarity: more detailed guidance at the very start of the planning process, setting clear expectations on likely Section 106 contributions for different types and sizes of developments
2. Standardised approaches: greater alignment across Birmingham’s various planning teams to ensure a more consistent experience for developers working across multiple schemes
3. Transparency: more open dialogue between councils, developers, and lenders throughout the planning process, reducing the risk of late-stage surprises
4. Viability reviews that work for all sides: when viability assessments need to happen, ensuring they are based on agreed and transparent methodologies that both developers and councils can trust. 

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