3 July 2015
What does the restriction on local authorities pooling contributions from S106 Planning Obligations mean for developers? WYG associate planner Hannah Andrew explains.
Introduced on 1st April 2015, the Regulation 123, S106 Pooling Restrictions reflects the Government’s position that the Community Infrastructure Levy (CIL) is the preferred method for pooling contributions. But, as less than 20 per cent of planning authorities have an adopted CIL, the pooling restriction is now directly affecting planning applications.
You might think that those contributions subject to a pooling restriction could be removed as a cost on development. Then the remaining liability for the delivery of this infrastructure could be passed to the relevant authority or statutory body. But it’s not that simple. In practice, the pooling restriction, where it means no mitigation against the impact of development, can prevent councils from granting planning permission. If permission is granted without appropriate mitigation, or an applicant enters into a S106 agreement which includes contributions towards infrastructure where the pooling restriction has been exceeded, there is risk of legal challenge.
Clearly this is not in anyone’s best interests. Councils are seeking to bypass the pooling restriction by being far more specific. For example, some are linking a S106 contribution to an individual school rather than education generally. Others are seeking to link specific infrastructure requirements directly to the development proposed rather than as the more general infrastructure requirement you would expect to be covered by CIL. Whether these practices are lawful or practicable will be for the courts to rule.
Unilateral undertakings offer an alternative solution. Here the applicant enters into a voluntary agreement to provide funding which can then be put towards the delivery of infrastructure. But such agreements cannot be used as a reason to grant planning permission - any funding provided to mitigate the impact of a development cannot be taken into account in the decision-making process.
So the current situation seemingly undermines the Government’s intentions. Among the benefits claimed for CIL when it was introduced in 2010 was the increased certainty ‘up front’ for developers. The idea was that developers would know how much they would be expected to contribute. In turn, this would encourage greater confidence and higher levels of inward investment. Ironically, with the pooling restriction now in place, and very few councils adopting CIL, there is no certainty on how to secure appropriate mitigation or around the ability to fund key infrastructure required to support development. In reality, developers and councils are in the dark.
Did you know?
• The pooling restriction prevents councils from collecting more than five separate planning obligations for a project or type of infrastructure;
• CIL is not mandatory. Less than 20 per cent of councils have CIL in place currently and some are not progressing with CIL Charging Schedules at all;
• Planning permission granted without appropriate mitigation, or subject to a S106 agreement which includes planning obligations for a project or type of infrastructure where the pooling restriction has been exceeded, may be unlawful.
• Voluntary agreements such as Unilateral Undertakings cannot be taken into account in the decision-making process.
Hannah Andrew is Associate Planner, based in WYG Leeds.