What are planning obligations? 

Under national planning regulations the Council can require a developer to contribute towards providing infrastructure or taking other steps to offset the impact of a development; these are called Planning Obligations.  

Planning obligations may involve a developer making a financial contribution to delivering infrastructure or a service.  Alternatively, there may be an obligation on the developer to deliver something themselves (like a play area on a site, or a certain amount of affordable housing). 

Planning Obligations are negotiated during the process of assessing and determining a planning application to help to mitigate the impact of the development and/or to ensure it is policy compliant; making acceptable, development which would otherwise be unacceptable in planning terms.  

What is a S106 agreement? 

These obligations are contained in legally binding agreements, often referred to as Section 106 or S106 Agreements (after the relevant section in the 1990 Town and Country Planning Act). The agreement is usually between the council and the developer (and other parties with interest in the land); however a developer can make a ‘unilateral undertaking’ to obligate themselves to deliver something. 

Legal requirements relating to planning obligations 

A Planning Obligation is made by deed under Section 106 of the Town & Country Planning Act 1990 (as amended) and can be used to: 

1. Regulate or restrict the use of land or the way in which a development is to be carried out
2. Require the carrying out of specified actions
3. Require payments to be made to the planning authority for specified purposes 

They provide a means of ensuring that developers contribute towards the infrastructure and services that the Council believe are necessary to render the application acceptable in planning terms.  

There are very specific rules around when planning obligations can be sought by the council, and we need to clearly explain why we are asking for something. The government sets three tests for planning obligations to be ‘lawful’, and all three tests must be met. Planning Obligations must be: 

• necessary (so without it the development would be considered unacceptable from a planning perspective and planning permission would be refused);
• directly related to a development (so it is needed only as a result of the development proposed); and
• fairly and reasonably related in scale and kind to the development (so the obligation has to be in proportion to the development proposed) 

Examples of what obligations are used for? 

Planning obligations are used for a variety of purposes, including (but not limited to): 

• requiring housing to be used and transferred to a housing association as "affordable housing"
• requiring commuted sums for the provision of "affordable housing"
• requiring infrastructure (such as roads) to be provided
• requiring land to be dedicated and equipped as open space or playgrounds
• requiring sums to be paid for the provision of off-site infrastructure or the long-term maintenance of open space
• requiring sums to be paid to improve accessibility of sites by sustainable means of transport
• requiring payment of sums for improving healthcare, educational facilities, libraries, youth and childcare facilities.
• Securing significant Biodiversity Net Gains on or off site 

Types of obligations/legal agreements 

Planning obligations can be fulfilled either through completion of; 

• a s106 legal agreement (S106) - where multilateral agreement is reached by all parties (for example, developer, MKCC, landowners etc).
• a Unilateral Undertaking (UU) - where the owner/developer agrees unilaterally to make financial contributions to various infrastructure requirements, or  

Other types of agreements relating to planning obligations include: 

• Deed of Variation (DoV) - Applications for modifying or lifting planning obligations can be determined by us in one of three ways:
  • if the obligation no longer serves a useful purpose, it may be discharged;
  • if it still serves a useful purpose, it shall continue in force;
  • if it would still serve a useful purpose equally well subject to proposed modifications, it may continue in force so modified.
• S73 letter – All legal agreements (s106/UU) will include a clause which enables obligations to be transferred to the s73 new permission without the need for a fresh legal agreement.  This is done by a signed letter by all signatories to the original agreement (and/or current land owners) 

Identifying planning obligations 

The identification of planning obligations should begin as early as possible in the planning process. Across most of the borough, planning obligations are negotiated on a site-by-site basis. The primary policy framework for determining appropriate obligations is Plan:MK. 

Neighbourhood Plan policies prepared by Town and Parish Councils will also be taken into account where they form part of the statutory Development Plan. 

The Council has several supplementary policy documents that support the implementation of Planning Obligations. These are set out in the Planning Obligations Supplementary Planning Document (SPD). Affordable Housing is covered by a separate SPD, which should also be referred to where relevant. 

Evidence base for infrastructure requirements 

The evidence supporting the infrastructure requirements in Plan:MK is contained within the Local Investment Plan (LIP) and the Infrastructure Delivery Plan (IDP). These documents provide a broad overview of anticipated infrastructure needs and associated costs. The IDP is a living document and is updated regularly as new information and requirements emerge. 

As part of the preparation for the Council’s new Local Plan (“MK City Plan”) a wider infrastructure study called the Milton Keynes Infrastructure Study and Strategy was produced so as to inform a new IDP which identifies strategic infrastructure needed to deliver the growth in homes and jobs planned for in the City Plan, to the year 2050. The current stage of preparation of the MK City Plan and copies of its evidence base can be viewed at: Evidence Base | Milton Keynes City Council – all evidence relating to infrastructure can be viewed under the “Infrastructure Delivery Plan” heading. 

Once the MK City Plan is adopted, the new IDP will form the key evidence for requesting and justifying new planning obligations. 

Assessing planning obligations for individual applications 

When a planning application is submitted, the Planning Service will consult a range of stakeholders, including: 

• relevant Council service areas
• external infrastructure providers
• ward councillors
• Town and Parish Councils 

These consultees will be asked to identify potential planning obligations necessary to mitigate the impacts of the proposed development. 

The Planning Service will then assess the evidence received on a case-by-case basis, considering whether: 

• the proposed obligations meet the three statutory tests for planning obligations;
• they are supported by relevant policies in Plan:MK and applicable Neighbourhood Plans; and
• appropriate weight should be given to existing supplementary planning obligation policies. 

Planning obligation thresholds 

Planning obligations may be required for developments of any size unless specific thresholds are set in national policy or Plan:MK. The main thresholds are: 

• Affordable housing – required for residential developments of 11 or more homes.
• cultural wellbeing – required for residential developments of 11 or more homes, and non-residential developments of 1,000 sq.m or more.
• Carbon offset fund contributions – required for residential developments of 11 or more homes, and non-residential developments of 1,000 sq.m or more.
• Open space and recreation provision – generally required for residential developments of 11 or more homes (see Appendix C of Plan:MK for detailed requirements). 

Monitoring of S106 agreements 

All S106 agreements are monitored to make sure that payment of obligations is made on time and for the right amount.  Once paid obligations can be applied to infrastructure projects and to support other local projects across the Borough. These projects are also monitored by the Obligations Team to make sure that obligations are used for the right projects depending on the obligation definition.  Developers must pay a Monitoring Fee for each obligation, to see these fees go to our Fees and Charges page.  

Viability 

The policy requirements in Plan:MK were tested through a whole plan viability study completed in 2017. 

If a developer identifies viability issues on an individual site, these should be raised with the Council as early as possible, ideally at pre-application stage. Any viability assessment submitted to Milton Keynes City Council will be reviewed by an independent consultant appointed by the Council, and the developer must cover the associated costs.  

In line with national guidance, Milton Keynes City Council will publish viability reports, unless an alternative approach is agreed.