Education Contributions for Housing – New Guidance from the Department for Education

The start to 2019 has seen an increase in focus by the government on education contributions, which are seen as key to the acceptability of any new housing developments. In March 2019, the Planning Practice Guidance was updated, and in April 2019, the Department for Education released two guidance notes on the provision of education contributions for new housing developments, Securing Developer Contributions for Education ('Developer Contributions Guidance') and Education Provision in Garden Communities ('Garden Communities Guidance'). Although these notes do not introduce any new concepts, they helpfully set out best practice for education contributions in a comprehensive guide and should be the starting point for local authorities and developers when considering this at land acquisition and planning application stages.

1. Why is education provision an important component?

Given the housing shortage and the need to significantly increase housing numbers, greater emphasis is being placed on the creation of new garden communities and urban extensions. The majority of these are self-contained sustainable new settlements where the aspiration is to provide for the education needs of incoming residents at the right time either on or off site. The provision of new schools is an important component of place-making and there is strong evidence that it can positively impact on scheme viability through achieving faster home sales.

The government is committed to ensuring that that there are sufficient school places to meet local needs whilst also driving forward an ambitious housing growth plan. The Department for Education expects local authorities to seek developer contributions towards school places that are created as a result of the demand created by their new housing.

2. When should developers engage with the likely provision of new schools?

Developers should engage with the local planning authority, the local authority with education responsibilities and the Department for Education at an early stage to assess the need for primary, secondary, special needs and post-16 provision.

As education commitments can be secured by means of conditions, s.106 agreements or Community Infrastructure Levy, developers should work with the local planning authority in order to consider the most appropriate mechanism alongside other infrastructure funding priorities. The impacts of the development will need to be adequately mitigated, which will require an understanding of:

• The education needs arising from the development;
• The capacity of existing schools to serve the development;
• Available sources of funding; and
• The extent to which developer contributions are required and the degree of certainty that these will be secured at the appropriate time.

In considering this, the test for planning obligations set out in the CIL Regulations should be borne in mind, requiring a contribution to be necessary to make the development acceptable in planning terms, directly related to the development and fairly and reasonably related in scale and kind to the development.

3. Who is responsible for providing the education data for the area?

The education authority working jointly with the local planning authority are responsible for identifying the anticipated number, type and size of schools required based on a robust assessment of need and capacity. The local planning authority should look to allocate sites in the local plan and ensure they are identified in their Infrastructure Delivery Plans and Funding Statements.

Pupil yield factors should be based on up-to-date evidence from recent local housing developments, so forecasts for education needs for each phase and type of education provision can be made. This should allow for an accurate estimation of the number of school-type places required as a direct result of the development.

4. Who should be paying for the provision of the new schools?

The Department for Education expects local authorities to secure developer contributions from housing growth. National Planning Practice Guidance contains an initial assumption that both land and construction costs for new schools will be met by the new housing development subject to a viability assessment when plans are prepared and if necessary when planning applications are determined.

Alternative sources of funding include basic need allocations and centrally delivered free schools, but these should only be considered available to the extent that developer contributions are shown by viability assessment to be unable to pay for school infrastructure, or as forward funding when developer contributions need to be deferred to ensure viability.

The amount of money that is sought from developers should reflect the current cost of providing school places, linked to the policy requirements in an up-to-date emerging or adopted plan that has been informed by viability assessment. The Department for Education advises that contributions are index-linked to adjust for inflation until they are due and available to be spent over a ten-year period. Consideration should also be given to whether best value will be achieved through the school’s direct delivery by the developer; however public procurement and state aid rules will need to be assessed.

In new settlements, schools can be delivered in single or multiple phases, and the best solution will be dependent on local circumstances. In the early stages of development it may be appropriate for developer contributions to be made to allow for temporary expansions of existing schools and enabling transport costs if necessary. This would allow for a permanent new school to be provided in a single construction phase once the development has generated sufficient pupil number

5. Are there size limitations on new schools?

Yes. For primary schools the Department for Education recommends a minimum of two forms of entry due to financial viability and for secondary schools four forms of entry. Where a requirement has been identified for both primary and secondary schools, there may be cost efficiency, space saving and education benefits in providing an all-through school.

Consideration should be given to future-proofing a new school including the safeguarding of land in case future expansion or the reconfiguration of a school is required. Whilst developers can only be expected to provide land to meet the education needs of their development, the allocation of additional land should preclude alternative uses, enabling the site to be acquired at appropriate cost in the future. The Planning Practice Guidance provides advice on land valuation for the purposes of the associated viability assessment.

6. Can a new school building be used for anything else whilst the new garden community is populated?

In principle, yes. However, safeguarding and design will need to be considered if part of the building is to be used for an interim use at the same time as a school, and planning permission may be required for any temporary change of use.

Alongside the government publications, greater judicial scrutiny is also being placed on how education contributions are dealt with. In March this year, a High Court judgement was handed down in the case of Thompson v Conwy CBC [2019] EWHC 746 (Admin), which raised the question of whether a committee had been misled in the information provided to it relating to the education contribution. This is clearly an area which local communities are concerned about and which justifies the increased focus on it.

For advice or further information on the new Department for Education guides, please contact either Gary Soloman or Sarah Sutherland.