What are Planning Obligations?

Introduction

What are planning obligations?

Section 106 (S106) Agreements are legal agreements between developers and the Council for certain types developments consented by major planning permissions. They are financial and non-financial requirements which are also known as “Planning Obligations".

S106 agreements are drafted when it is considered that a development will have significant impacts on the local area that cannot be mitigated by means of conditions attached to a planning decision.

When can planning obligations be sought?

Planning obligations can be sought on developments of 10 or more dwellings, or 1,000 square metres or more gross floorspace for provision, improvement or maintenance, these are known as major planning applications.

Planning obligations assist in mitigating the impact of development to make it acceptable in planning terms. Planning obligations must meet the tests set out by Government that show they are necessary to make the development acceptable in planning terms. The tests are:

• 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.

Where is policy on seeking planning obligations set out?

Policy in respect of planning obligations is set out in the Local Plan, which in Broxtowe is made up of the Greater Nottingham Aligned Core Strategy Part 1 Local Plan (2014) and Broxtowe Part 2 Local Plan (2019).

Policy 32 of the Broxtowe Part 2 Local Plan identifies what financial contributions may be sought for, with more specific requirements being identified in other policies throughout the plan. Planning obligations are typically sought in respect of affordable housing, open space, transport infrastructure, education and health.

Viability

The starting point for all applications will be that full, policy compliant contributions will be provided in accordance with the adopted local plan unless there is suitable, sufficient and justifiable evidence to depart from this.

If an applicant considers there to be issues of viability due to the level of contributions being sought which would render a proposal undeliverable, they are required to submit robust viability assessment. Where such an assessment is submitted this will be independently reviewed with the applicant required to pay the council’s costs for having this work undertaken. The person or organisation used for the independent review will be at the council’s discretion. 

Agreeing Draft Heads of Terms

In order to address and agree issues that would need to be covered by planning obligations at an early stage, the council requires a draft heads of terms to be submitted as part of a planning application where planning obligations are required.

The draft heads of terms should set out clearly the obligations that the developer/landowner is willing to be bound by, in order to meet the needs generated by the development that are not going to be met as part of the development scheme itself.

Community Infrastructure Levy

There is not currently a Community Infrastructure Levy in place in Broxtowe.

Monitoring and Administration Fees

All S106 agreements require monitoring on a regular basis to determine whether any triggers for payment have been reached. These trigger points can include for example commencement, completion or occupation of development.  It is only when these triggers are reached that contributions are required to be paid.  Although the onus is on developers informing the council when these triggers are met, this is not always the case.

To cover some of the cost of monitoring and administrating S106 agreements, Broxtowe Borough Council currently use a fixed 5% of financial contributions capped at £5,000 monitoring fee.

Legal Fees

The council's reasonable legal costs associated with the negotiation, preparation and completion of the s106 agreement are recoverable from the developer. These are not part of the planning obligation itself rather a charge for work undertaken by the council and they do not therefore form part of the planning obligation calculation.