New guidance promotes the funding of new school places through developer contributions

New guidance from the Department for Education (DfE) reinforces the message set out in the recently revised National Planning Policy Guidance (NPPG), which for the first time included paragraphs on funding school places through developer contributions.

Guidance from both the DfE and the NPPG is clear in outlining a shift in responsibility of providing school places from central to local government. The planning system will be the primary tool used and whilst many authorities have been using both s106 and the Community infrastructure Levy (CIL) to fund educational facilities, the recent changes are in effect government policy and will place greater pressure on the planning system. At the same time, it is anticipated that DfE funding will be reduced taking account of the expected increase in funding from the planning system.

An important consideration, which may have been overlooked, is the potential for competing needs and limited resources. The provision of financial contributions towards education will typically be subject to viability considerations. However, the new guidance implies that education contributions will be forthcoming where viability is not an issue, bringing contributions towards education into direct competition with affordable housing, highway improvements, transport infrastructure and other necessary mitigation measures. Of particular importance, affordable housing is often funded via ‘leftover’ finance once other infrastructure types have been accounted for and will likely be squeezed as a result of the changing requirements for contributions towards education.

The impact of the new guidance will be most severely felt in areas of lower land values, where viability restricts the financial capabilities of proposed developments. Over time, this may lead to greater imbalance in the quality of educational facilities between areas of high and low land values.

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