Harrogate and Knaresborough MP leads calls for reform of ‘failing’ housing system

This article is part of series of free-to-read investigations into a broken housing system that lets people down. See the links to the other articles at the end. Please help us investigate more issues that matter to you by becoming a subscriber here. It costs as little as 14p a day.

Harrogate and Knaresborough MP Tom Gordon has led calls to reform the arcane Section 106 housing system.

Under the system, North Yorkshire Council and housing developers agree payments for services such as schools, GPs and transport to compensate for new homes.

But Stray Ferret investigations this week revealed how funding pledges by developers to compensate for major developments in Harrogate, Ripon, Knaresborough and Nidderdale have been left hanging in the air.

One of our many troubling findings was that just £44,124 of Section 106 funding was actually spent in the entire Harrogate area in 2023/24.

We've shown how deals between councillors and developers delay payments for years, and how terms can be varied.

Residents have little say, find it almost impossible to track payments and don't know who to contact to raise concerms.

This shocking lack of accountability and transparency revolves around the Section 106 agreements that state what developers must pay.

You can read our Explainer article about Section 106 here.

'Unacceptable failures'

Liberal Democrat Mr Gordon said “residents are right to be frustrated” by “unacceptable” failures at North Yorkshire Council, which he said “lacks effective systems to track or enforce Section 106 commitments”. 

He said residents and local councillors shoud have a greater say in how money is allocated, adding:

Sir Alec Shelbrooke, the Conservative MP for Wetherby and Easingwold, said he “would expect local authorities to have a dedicated legal officer with oversight” of Section 106 agreements to improve accountability.

Sir Julian Smith, the Conservative MP for Skipton and Ripon, did not respond.

Council 'actively looking' to improve 

North Yorkshire Council has five staff working on Section 106 agreements. 

Although the original agreements are published online when developments are approved, nothing follows explaining how much is spent on each development, and there is no dedicated person dealing with public enquiries.

Councillor Mark Crane, North Yorkshire Council’s Conservative housing chief, said he’d tasked council officers with seeking ways to improve transparency around spending:

Cllr Crane acknowledged the system could be improved and that some developers slowed down housebuilding once they knew trigger points for payments were approaching.

But he said Section 106 payments provided many benefits and not one person had written to him with concerns in more than 20 years as a councillor. “I don’t think there’s a serious problem,” he said.

Half-built estates

People living on half-built housing estates with no buses, cycleways, shops or schools might disagree. 

“The people who have suffered are the thousands living on new build estates all over the county but especially in our district where people have no choice but to drive,” says Gia Margolis of Harrogate District Cycle Action. 

“We’ve seen that over the last 20 years, pots of money languishing, just not being spent,” she says.

North Yorkshire Council’s latest ‘infrastructure funding statement’ at the end of 2024, showed it had amassed over £11.5 million in unallocated Section 106 contributions, £5.5 million of which is for education, for the Harrogate area alone.

The council’s reasons for holding this level of funding – “that projects take time to start as they need full funding often from multiple developments before monies are allocated” – indicates the inherent slowness of Section 106.

Legal action

Some councils have threatened legal action against developers to enforce Section 106 commitments. This has occurred recently in Harlow in Essex, Barry in South Wales, Westminster and in Ashford, Kent.

However, Professor Alex Lord, chair of town and regional planning at Liverpool University, says the construction industry should not be caricatured as “evil, Trump-esque real estate”, saying they would jeopardise their relationships with councils if they failed to deliver on terms.

Rene Dziabas, former chair of the now wound-up Harlow and Pannal Ash Residents’ Association, agrees the problem is more about developers testing the limits rather than dishonesty:

Certainly, some builders contacted for this series – Taylor Wimpey and Harron Homes for instance – were eager to stress they had made all necessary payments and were compliant with the law. A Section 106 agreement is a legal deed after all.

Others, Persimmon for example, responsible for the 600-home King Edwin Park estate on the edge of Harrogate, simply did not respond.

'It doesn't help children who need a school'

Knaresborough town councillor Matt Walker recalls a meeting last autumn with Taylor Wimpey, which is building the eastern half of the 600-home Manse Farm estate that is still without a primary school originally slated to open in 2021.

The builder’s representatives said that although the homes hadn’t sold as quickly as they’d hoped, they were now on track to meet their targets.

“I get that,” says Cllr Walker, “but that really doesn’t help those children who need a school”.

Will issues be tackled as housebuilding increases?

The volume of Section 106 agreements is expected to mushroom as the government leans on councils to more homes. Ministers have trebled North Yorkshire’s housing need from 1,300 homes a year to 4,077.

We asked the Ministry of Housing, Communities and Local Government what it was doing to improve Section 106.

A spokesperson said a planning reform working paper in May sought views on how Section 106 negotiations could be “streamlined”. They added: “Ultimately, local authorities are accountable for their actions to their electorate and must act within their statutory powers.”

Residents' complaints, they said, should be addressed first to the council and then to the Local Government and Social Care Ombudsman.

More homes are inevitable — but will residents continue to be ignored through a system that appears deaf to their concerns?

Our investigation into Section 106 agreements is supported by the Public Interest News Foundation, which promotes the value of independent local news providers.