Planning Obligations and Section 106 Explained

Covid-19 Update: At this time requests regarding the availability and release of developer contributions to projects will be progressed as normal.  However the actual release of funds to agreed projects may be delayed depending on delivery timescales as all non-essential funding release has to be confirmed through a separate authorisation process at this current time.

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.  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, however a developer can make a ‘unilateral undertaking’ to obligate themselves to deliver something.

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 help to mitigate the impact of new development.

There are very specific rules around when planning obligations can be sought from 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)

Other Useful References:

Next section - How are planning obligations identified?


Last Updated: 6 April 2020