What is a Section 106 Agreement?

Partner Karen Jones, in our leading Planning & Environmental Law team, explains Section 106 Agreements.

Section 106 Agreements are formal Deeds  made pursuant to Section 106 of the Town and Country Planning Act 1990 (“the Act”) to secure planning obligations which are required in order  to make a proposed development acceptable in planning terms. The idea is that the planning obligations mitigate the impact of a proposed development.

What can be a Planning Obligation?

Section 106 of the Act states that a planning obligation can:

1. Restrict development and/or use of land;
2. Require specified activities or operations to be carried out on or over land;
3. Require land to be used in a specific way; or
4. Require a sum(s) to be paid to the local authority

Examples of planning obligations include:

• A requirement to provide on-site affordable housing
• A requirement to pay a sum of money towards the provision of affordable housing off site
• A requirement to provide community facilities such as a youth centre on site
• A requirement to provide access roads or to improve junctions

When can a Planning Obligation be required by a local authority?

Regulation 122 of the Community Infrastructure Levy Regulations 2010 (as amended) provides that a planning obligation can only constitute a reason to grant planning permission where it meets the following tests:

1. The planning obligation is necessary to make a development acceptable in planning terms
2. The planning obligation is directly related to the development
3. The planning obligation is fairly and reasonably related in scale and kind to a development

Example of obligation not meeting the tests: A development for up to 40 residential dwellings in North Warwickshire was refused by the local planning authority. The applicant appealed. Various planning obligations were found to meet the above tests. However, the Inspector concluded that he had too little information before him to be able to assess whether a requested library contribution was related in scale to the development or if there was a library close to the site “such that [the contribution] could be considered directly related to the development”. Accordingly, the Inspector could not take that contribution into account when making his determination of the planning appeal.

Can I refuse to enter into a planning obligation?

The short answer is yes. However, by refusing to enter into it if it is validly sought by the Local Planning Authority you are at risk of your application being refused. It may be that you are willing to swallow the planning obligation pill in order to secure planning permission but if you have reasons to advance to suggest it is not a justifiable requirement for your development you may be able to negotiate with the Local Planning Authority concerning its imposition.

If you do not think that a planning obligation is justifiable in light of the tests above these should be put to the Local Planning Authority. If you are able to advance your arguments with substantiated evidence or reasons then this would assist you. Any attempt to reduce an affordable housing planning obligation will likely need to be supported by a viability assessment. You should take specialist advice before approaching the Local Planning Authority.

Local planning authorities are required to consider each development on a case-by-case basis and if you can put forward substantiated reasons why a planning obligation cannot or should not be provided then this would strengthen your position.  It can be difficult to challenge a Section 106 Contribution if you are going to nonetheless sign up to it to achieve a planning permission. Any doubt as to the validity of the obligation sought could make your permission vulnerable to challenge.

For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.