What are S106 Agreements?

Section 106 (S106) Agreements are legal agreements between developers and the Council for certain types developments consented by major planning permissions. They 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.

Set out below is a summary of the type of S106 contribution that the Council may seek and the relevant Local Plan policies.

Type of Contribution

Policy

Employment and training

Policy EE4: Local Employment and Training Opportunities

Open space

  • Policy EN2: Open Space in New Development
  • Policy EN3: Playing Fields and Sports Grounds
  • relevant site allocations

Drainage and flood protection

Policy CC3: Water relevant site allocations

Transport

  • Policy TR1: Parking and Travel Planning
  • Policy TR2: The Transport Network
  • relevant site allocations

Community facilities including education

Policy LS5: Community Facilities

Affordable housing

Policy HO3: Affordable Housing

The above policies can be found in the Land and Planning Policies Document - LAPP (2020) (Part 2 Local Plan).  Since the adoption of the Local Plan, the government has made significant changes to the Use Class Order. The Council has prepared this Statement on Use Class Change which sets out how policies in the Local Plan and Supplementary Planning Documents that refer to specific use classes can be applied in light of these changes.

Other planning obligations may be necessary to make developments acceptable in planning terms. The need arising from the development will be determined by the scale and nature of the development on a case by case basis.

In certain instances additional guidance to Local Plan policies is provided in the form of Supplementary Planning Documents and Guidance.  Currently the following documents provide details of how contributions will be determined for the following infrastructure.

 Infrastructure Supplementary Planning Documents and Guidance 
Purpose Built Student Accommodation Affordable Housing Contributions arising from Student Accommodation Supplementary Planning see also Revised S106 Contributions.
Education

Education Contributions from Residential Development see also Revised S106 Contributions

Affordable Housing Affordable Housing and Developer Contributions see also Revised S106 Contributions.
Open Space  The Provision of Open Space in New Residential and Commercial Development see also Revised S106 Contributions.

Please view the Adopted Supplementary Planning Documents and Guidance page for further details.  Details of any new Supplementary Planning Documents including all consultations will be set out in our Latest News webpage.

The cost of S106 contributions will be updated when new information is made available.  Details of updates contributions will be set out on the S106 Contributions revised costs page.

To help make the process for determining of S106 open and transparent a new tool has been produced to give a summary of likely financial contributions for the following infrastructure;

  • Affordable Housing
  • Open Space
  • Education; and
  • Employment & Training

S106 Estimator

It should be noted that this is a working tool that will be adapted to changing guidance and will be reviewed as new Supplementary Planning Documents are produced and as contributions are reviewed annually. It is imperative therefore that the latest version of the S106 Estimator is always downloaded.

In order to address and agree issues that would need to be covered by planning obligations at an early stage, the council may require 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. The draft heads of terms should also include the agreed timing/triggers for satisfying the obligations.

If there are issues of viability, then developers can submit a Viability Assessments which will be independently assessed.  It is expected that the developer will pay for this independent assessment.  If there are any reductions in the level of contributions then the planning applications will then be determined by planning committee.

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 contributes 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, 3% of S106 contributions are currently top-sliced off to a maximum of £5976 (2022) subject to the maximum cost increasing in line with the Retail Price Index on 1 April each year. 

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 done by the Council and they do not therefore form part of the planning obligation calculation.

The Council in line with recent changes to Government legislation is required to produce an annual Infrastructure Funding Statement (IFS).

The IFS provides information on developer contributions, which are used to provide infrastructure to support development within the City to help mitigate impacts caused by development.  It includes information on the contributions required, received, how financial payments have been used and retained. 

Further details can be found on the Infrastructure Funding Statement page including the latest IFS.

Details of a new nationally set ‘Infrastructure Levy’ were published in 2020 in the government’s White Paper, ‘Planning for the Future’. The government has said that it should see at least as much money raised to pay for local infrastructure and affordable housing as by the existing system of developer contributions in the planning process which would be scrapped.

Instead of negotiated Section 106 Agreements and the separate, locally set CIL, the government is proposing to introduce a single, nationally set ‘Infrastructure Levy’ as a proportion of the sale value of a development, above a minimum threshold. The aim is to raise more money for infrastructure and deliver more affordable housing whilst removing the delay and uncertainty that is considered inherent in negotiated agreements.

Further details of how and when this replacement levy will be introduced are awaited. In the meantime, the current S106 requirements remain. Even when replaced, there will remain the need for the Council to monitor and administer existing S106 Agreements and developers to pay any monies owed or provide agreed infrastructure as part of an agreement.

The statutory tests are set out in regulation 122 (as amended by the 2011 and 2019 Regulations) and as policy tests in the National Planning Policy Framework.

S106 Regulations states that such agreements can only be imposed where;

  • 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.