Summary: Mrs X complained the Council refused to vary an agreement under section 106 of the Town and Country Planning Act. We find there was no fault in its consideration of the variation request, but it did fail to record its decision appropriately. That was fault. It has already apologised for the confusion that caused which is an appropriate remedy and reminded staff of the need to record emails sent.

The complaint

1. Mrs X complained the Council refused to vary an agreement under section 106 of the Town and Country Planning Act. Mrs X said this has prevented her from purchasing her home under the Voluntary Right to Buy scheme (VRTB).
2. Mrs X has purchased the property under the Right to Acquire (RTA) scheme but said she has suffered financial losses as she would have obtained a greater discount had she purchased it through the VRTB scheme. Mrs X wants the Council to compensate her.

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The Ombudsman’s role and powers

3. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
4. We investigate complaints about councils and certain other bodies. We cannot investigate the actions of bodies such as Housing Associations. (Local Government Act 1974, sections 25 and 34A, as amended)
5. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

6. I discussed the complaint with Mrs X.
7. I made enquiries of the Council and considered its response.
8. Mrs X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Voluntary Right to Buy

9. The Housing Act 1985 gave tenants of social landlords the right to buy their homes at a discount, provided they met certain criteria. If someone does not have the right to buy their home, they may still be able to purchase the property under the Right to Acquire (RTA) scheme. This also offers a discount, but it is less than that offered by the right to buy scheme.
10. In 2018, the government launched a pilot to allow housing association tenants in certain parts of the country the opportunity to purchase their home with VRTB level discounts. The Government provided guidance for housing associations that required them to have a published policy setting out circumstances where they were unable to sell a particular property, such as where there was a restrictive covenant or an affordable housing section 106 agreement.

Section 106 agreement

11. An agreement under section 106 of the Town and Country Planning Act is a legal agreement between a developer and a local planning authority. The agreement sets out measures the developer must take to reduce the impact of a development on the local community. Once the developer signs the agreement it is a legally binding contract. The developer or landowner can ask the local authority to alter the conditions of the agreement. If the local authority refuses to alter the agreement, the landowner/developer has the right of appeal to the Secretary of State.

What happened

12. The Council granted planning permission for a residential development. The permission was subject to a Section 106 agreement between the Council and the landowner that 30% of the new dwellings must be retained as affordable housing.
13. Mrs X moved into one of the new houses allocated for affordable housing. In 2018, she received a letter from the housing association and was told she could apply to purchase the house under the VRTB scheme. Mrs X applied to purchase the property, but her request was refused by the housing association after the Council said it would not amend the section 106 agreement.
14. In 2020, Mrs X contacted the Council to complain about its refusal to amend the section 106 agreement. The Council initially told Mrs X it had not received a formal request from the landowner to vary the agreement. However, Mrs X provided an email the Council sent to the housing association in February 2019. The sender and the recipient of the email were redacted. That email said the Council refused to amend the agreement as it would result in the loss of affordable housing stock in the area.
15. The Council sent a further response to Mrs X. It said the officer who sent the email had not recorded it on the Council’s systems, and it had contacted the housing association, but it was not possible to identify who it had been sent to or from. It said it would remind planning officers to attach significant correspondence to case records in future. However, it said irrespective of that information, the Council’s case remained the same and it was unlikely to agree to the variation of the section 106 agreement because of the Council’s declining stock of affordable housing.
16. Mrs X was unhappy with the Council’s response and complained to the Ombudsman. She said that VRTB meant the housing association got full reimbursement for the property unlike RTA. As she had bought the property through RTA she said the Council’s reasoning that it wanted to prevent the loss of affordable housing stock was flawed.

The Council’s response to my enquiries

17. The Council stated that it would not have considered amending the section 106 agreement because:
• The development was relatively recent and the planning reasons for needing the agreement had not changed.
• Varying the section 106 agreement would have set a precedent across the Borough.
• Despite VRTB providing full reimbursement to the housing association, it did not guarantee the replacement property would be of a similar type and size and may not be built within the Council’s area. Subsequently, it needed to protect its housing stock, as it has an annual shortfall of affordable homes.
• The Housing Association policy stated that houses with a section 106 agreement were exempt from the scheme. However, Mrs X could have ported her discount to an alternative property.
18. In addition, it said it had not received a formal ‘variation of deed’ application from either the landowner or developer. It stated they would have had to make a formal application, and if the Council refused, they could have appealed that decision. It said where the housing association had made formal requests for other properties to amend a section 106 it had done this through a solicitor.

My findings

19. The email Mrs X has provided demonstrates the Council did consider the request to vary the section 106 agreement in February 2019 but decided not to. The housing association could have challenged the Council’s response further if it was unhappy with it. It did not. That was a decision for the housing association and its actions are outside of the Ombudsman’s jurisdiction.
20. The Council’s failure to record the initial email on its system was fault. That meant in its initial responses to Mrs X’s complaint it said it had not received a request to amend the section 106. That has caused her avoidable uncertainty as to whether the Council properly considered amending the section 106 agreement. The Council has already apologised for the confusion caused by this. That remedies any injustice caused.
21. We cannot question the merits of the Council’s decision where there is no evidence of fault in how it was reached. The Council has provided further explanation about its decision not to vary the section 106 agreement. Although Mrs X disagrees, the Council’s view is that amending the section 106 agreement would impact on its affordable housing stock. The Council has set out several reasons why it believes that might be the case. The Council was not at fault.

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Final decision

22. There was no fault in the Council’s decision not to vary a section 106 agreement. It has already accepted fault for failing to update case records and provided an appropriate remedy to Mrs X. Therefore, I have completed my investigation.

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Investigator's decision on behalf of the Ombudsman