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What is a Section 106 planning obligation?

Planning obligations are created under Section 106 of the Town and Country Planning Act 1990. They are legally binding obligations that are attached to a piece of land and are registered as local land charges against that piece of land. Planning obligations enable a council to secure contributions to services, infrastructure and amenities in order to support and facilitate a proposed development.

The requirements of a Section 106 obligation will vary according to the size, impact and nature of the proposed development.  At Guildford Borough Council, our planning officers rely on the adopted Local Plan 2003 as well as Supplementary Planning Guidance and Documents (SPGs and SPDs) to inform applicants of the requirements for their particular application.

What is the purpose of these obligations?
Planning legislation includes the essential principle that development should pay for the social and physical infrastructure to support and facilitate a development.  It would not be fair to expect a developer to contribute towards existing service deficiencies such as a shortage of school places or library facilities, or repairs to the highway, where no additional need would arise from the development.  However, it would be fair to expect them to contribute to limiting the impact of their own development on the local area.

Relationship between Section 106 and Community Infrastructure Levy (CIL)
Details of the operation of the CIL are outlined in CIL legislation that came into force on 6 April 2010. Information on the CIL is available via the Planning Advisory Service.

CIL attempts to make sure that almost all planning applications for new buildings or extensions, rather than just large applications, contribute towards funding infrastructure needed to support development in that area.  The CIL has been brought in as a standard national tariff, although the level is to be set locally.  CIL may be levied on new residential and commercial development new builds and extensions above 100 square metres.  Whilst the CIL rate will relate to the overall cost of identified infrastructure required in the area, CIL revenue may be spent on any infrastructure needed, anywhere in the borough, not necessarily in the vicinity of any particular development.

The CIL is simple, predictable, transparent, fair and efficient however it cannot be implemented before the there is an up to date plan or the Core Strategy has been adopted. In September 2011 the Council decided to adopt CIL in Guildford. The report with a timetable can be viewed by using the following link Executive - 29 September 2011. After this date Section 106 agreements were severely curtailed. Section 106 obligations will continue to be employed for site specific amelioration.

The legislation places three tests into law on the use of planning obligations.  Since 6 April 2010, in determining an application, it has been unlawful to take into account a planning obligation that does not meet all three tests, which are that the obligation is: 

(a) necessary to make the development acceptable in planning terms;
(b) directly related to the development; and
(c) fairly and reasonably related in scale and kind to the development

The key principles for establishing 106 contributions are defined and structured in the Office of the Deputy Prime Minister (ODPM) Circular 05/05, and are also referred to in a number of Planning Policy Statements (PPSs) and Planning Policy Guidance notes (PPGs) dealing with specific policy issues.  For example, PPG13 gives detailed guidance on contributions for measures to assist public transport. From 27 March 2012 Circular 5/05 which previously defined Section 106 has been replaced by the National Planning Policy Framework 2012 (NPPF).

How is the type and level of contribution decided?
Planning officers will not ask for any contribution unless it relates fairly to the development.  If a developer offers any unrelated contribution, that does not meet the three legal tests, as an inducement, planning officers will disregard this when determining the application.  For example, it may not be proper for a local authority to seek contributions towards the development of a swimming pool arising from an application for a supermarket development.  However, it could be proper to expect a supermarket developer to contribute towards highway improvements (if appropriate) and an enhanced landscaping plan.

In practice, it is not unreasonable for communities to identify those areas where there are weaknesses in social and physical infrastructure to which contributions could be sought from new development, provided that the contribution relates in scale and kind to the development.  For example, affordable housing, sheltered accommodation, open space and local environmental improvements.

How will the contribution be spent?
Section 106 obligations will often specifically identify what the financial contribution will be used for.  Working groups, including officers from all potential spending service units such as Housing and Leisure, work with the Section 106 Officer to ensure that contributions are correctly allocated and handled.  In addition, our Section 106 Officer makes sure that no agreed payments are missed or fail to be collected for whatever reason.

How do you establish priorities for contributions?
As the local authority, one of our key roles in this process is to identify and prioritise needs within our borough and to consider these alongside present and proposed developer contributions.  For example, affordable housing has been identified as one of the Council's Key Delivery Targets.

Who to contact for information and advice
Please contact the Section 106 Officer for more information.

Offsite links

Contact us

Planning Services
Guildford Borough Council
Millmead House
Millmead
Guildford
GU2 4BB
United Kingdom

Telephone: 44 01483 444609
Email: planningenquiries@guildford.gov.uk

Last updated: 18 December 2013 08:59 AM