Section 106 agreements
The House of Commons Library has published a briefing paper looking at recent changes to planning obligations, the appeals process surrounding them and how planning obligations interact with the Community Infrastructure Levy. The brief looks at England only: http://bit.ly/1OMOdMy
Planning obligations, sometimes known as section 106 agreements, are legally enforceable obligations entered into under section 106 of the Town and Country Planning Act 1990 (as amended). They are agreements made between a developer and the Local Planning Authority (LPA) designed to meet the concerns an LPA may have about meeting the cost of providing new infrastructure for an area.
In order for planning obligations to be used, they must meet three legal tests set out in part 11 of the Community Infrastructure Levy Regulations 2010 . A planning obligation may only constitute a reason for granting planning permission if it is 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.
In 2014 the then Government’s Planning Practice Guidance was amended to exempt developments of 10 units or fewer and developments with less than 1,000 square metres of floor space from the requirement to contribute towards affordable housing. The Government argued these changes would help increase housing supply. However, some local councils objected to the loss of income these exemptions would bring. In August 2015 the Government revoked this policy following a judicial review brought by West Berkshire District Council and Reading Borough Council after it was judged to be “incompatible” with the statutory planning framework. The Government appealed this judgement and, in May 2016, won its appeal. The Government has now reintroduced this policy in its amended planning practice guidance , from 19 May 2016.
The former Coalition Government made changes to how planning obligations interact with the Community Infrastructure Levy (CIL). LPAs must not double charge developers for the same infrastructure projects, and since April 2015 LPAs can no longer pool more than five planning obligations if they were entered into since April 2010, and if it is for infrastructure capable of being funded by the CIL.
In the HM Treasury’s July 2015 Productivity Plan, Fixing the foundations: Creating a more prosperous nation , the Government announced its intention to introduce a dispute resolution mechanism for section 106 agreements, in order to 'speed up negotiations and allow housing starts to proceed more quickly.' The Housing and Planning Act 2016, once in force, will provide for a dispute resolution process designed to speed up section 106 negotiations.