Worried/Bamboozled/Angry about Developer Contributions?

You are not alone!  Councils require financial and other contributions from developers as part of the planning permission for many types of development and this is usually on top of any highway or drainage works that may be required. Usually the person paying for the contributions is not the developer but the land owner or the end user.

Developer contributions come in two forms- Section 106 Agreements – these are legal agreements between the Council and the landowners/developers and sometimes other interests involved requiring works to be carried out, land to be set aside for a specific purpose and/or money to be paid as part of a grant of planning consent for development.-

Community Infrastructure Levy (CIL) – various Councils have a scheme of charging for specified types of development that has been through public consultation and scrutiny by a Planning Inspector. Not all Councils have been through the public consultation/scrutiny process for CIL and the Levy has only been in existence for around 3 years. If you have a development covered by a CIL, the proposal will be subject to the Levy at the published rate.

Various national bodies and developer  groups  are  coming  together  to  lobby  the  Government  to abandon the whole CIL procedure on the basis that it is not fulfilling its original aims and could be a break on development. Section 106 Agreements have been around for many decades and are for  covering  matters  that  cannot  be dealt  with  by  way of  a  planning condition  attached  to  a  planning  permission.  Many  Councils  seek  to obtain  financial  contributions  for  other  Council  services  e.g.  Schools, open space from developers.   However,  to  meet  legal  tests  the contributions  sought  have  to  be  fair,  reasonable  and  related  to  the development  concerned.   For  example,  for  a  major  housing  scheme where  local  schools  are  at  capacity,  it  would  be  “appropriate”  for  a contribution to additional classrooms to be made but this would not be the case for a scheme for housing for the elderly. There have been problems with Section 106 Agreements and these can be classified as follows-

Uncertainty. It is not necessarily clear at the outset of drawing up plans for a development whether a Section 106 Agreement would be necessary or the full extent of such an Agreement. – Protracted Discussions. Some discussions go on for months and in some instances years.

Scrutiny. Whilst it is public knowledge that discussions are taking place on such agreements, the exact negotiations are confidential between the principal parties.  There  have  been  calls  for  more transparency  regarding  the  process  of  arriving  at  Section  106 Agreements The Government is considering an overhaul of aspects of the Section 106 Agreement procedure and is consulting on measures to speed up the  process  and  resolve  conflicts  that  rise.

The  proposals  for consultation are summarised as follows;-a) Setting  clear  time  limits  for  the  negotiations  of  Section  106Agreements that are linked with the time periods for the associated planning application (usually 8 or 13 weeks) b) Requiring the parties to the Agreement to start the discussions at the beginning of the planning application process and not at an intermediate point or at the end of the process c) Setting up a dispute resolution process d) Standardising documentation. These measures would require legislation in the next Parliament.

CMM would welcome any comments on these matters from clients. Clearly, with a general election in May, the consultation proposals may not  lead  to  any  changes  and  a  new  Government  will  have  its  own priorities and legislative programme.  However, it would be of assistance for the appropriate planning minister to be aware of the concerns of the developers/landowners.

CMM provides support for clients who may be affected by Section 106 Agreements.

Richard Ling

CMM Planning Consultant

February 2015