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Planning Obligations

Document Cited authorities 35 Cited in Related
Vincent
AuthorWilliam Webster
Pages201-215

Chapter 9


Planning Obligations

NATURE OF A PLANNING OBLIGATION1

9.1 A planning obligation2may be made with a local planning authority (LPA) or offered as a unilateral undertaking by a developer as an incident to the grant of planning permission.3Planning obligations assist in mitigating the impact of development and usually operate to confer benefits on local communities and to support the provision of local infrastructure. A planning obligation may, however, only constitute a reason for granting planning permission if it satisfies all of the following tests:

(a) it should only be sought where it is not possible to address unacceptable impacts through a planning condition;4and

(b) where the obligation is:

(i) necessary to make the development acceptable in planning terms;5

1NPPG at Paragraph: 001 Reference ID: 23b-001-20150731 to 23b-11-20150814.

2TCPA 1990, s 106(9): the planning obligation must be entered into by an instrument executed as a deed and must contain those particulars mentioned in s 106(10) and shall also be a local land charge under s 106(11). A s 106 agreement is subject to the usual rules of contract law with the result that invalid provisions may be severed leaving the remainder of the agreement enforceable (see R v Somerset County Council ex parte Dixon (1998) 75 P & CR 175 at 187).

3TCPA 1990, s 106 (planning obligations), s 106A (modifications and discharge of planning obligations) and s 106B (modification or discharge of affordable housing requirements).

4NPPF, para 203.

5Obligations to transfer land to the local authority (such as land intended to be used as public open space) could follow from a s 106 obligation (R v South Northamptonshire District Council ex parte Crest Homes Plc [1994] 3 PLR 47). In Jelson Ltd v Derby City Council [2000] JPL 203, it was held that a s 106 agreement should not impose an obligation to transfer land to a social landlord unless the latter was also a signatory to the agreement and thus complied with Law of Property (Miscellaneous Provisions) Act 1989, s 2 (which did not arise in Jelson as no housing association could be nominated until after the development had begun, which meant that there was no signature to the s 106 agreement from any housing association). This decision (which has not been overruled but was not followed in Milebush Properties Ltd v Tameside MBC [2010] JPL

202 Planning Law: A Practitioner’s Handbook

(ii) directly related to the development;6and
(iii) fairly and reasonably related in scale and kind to the development.

COMMUNITY INFRASTRUCTURE LEVY REGULATIONS 2010, REGULATION 122

9.2 The tests under 9.1(b) above are given statutory force by regulation 122 of the CILR, which applies to all planning permissions and was intended to clarify the role of section 106 agreements following the introduction of the Community Infrastructure Levy (CIL). CIL is intended to have a much wider reach when it comes to the funding of infrastructure in a district, whereas section 106 agreements are necessarily more site-specific.7

9.3 There are a number of helpful cases on regulation 122. In R (Welcome Break Group Ltd) v Stroud District Council,8Bean J said that:

An offered planning obligation which has nothing to do with the proposed development apart from the fact that it is offered by the developer is plainly not a material consideration and can only be regarded as an attempt to buy planning permission. However, if it has some connection with the proposed development which is more than de minimis then regard must be had to it. The extent, if any, to which it affects the decision is a matter entirely within the discretion of the decision-maker.

1303) would not prevent the imposition of a restriction whereby a specified proportion of the general market housing could not be occupied unless the affordable housing had been built and transferred to a registered housing association. It should be noted that Jelson was decided before the coming into force on 1/5/2000 of the Contracts (Rights of Third Parties) Act 1999 whereby identified third parties or persons of a particular description may sue on contracts that are expressly made for their benefit (there being no necessity that the third party was actually in existence at the time the contract was made for their benefit).

6For instance, it was held by the Supreme Court in R (Derwent Holdings Ltd) v Trafford Borough

Council [2011] All ER (D) 216 that for an off-site benefit to be material, it had to be related or connected to the development and that that connection had to be real rather than fanciful or remote. In R (Thakenham Village Action Ltd) v Horsham District Council [2014] JPL 772, the court reviewed the case law relating to when financial contributions may be directly related to a development. See also Good Energy Generation Ltd v Secretary of State [2018] EWHC 1270 (Admin) where it was held (following Forest of Dean DC v Wright [2017] EWCA Civ 2102 and R (Sainsbury’s Supermarkets Ltd) v Wolverhampton City Council [2010] UKSC 20) that a developer’s unilateral undertaking under s 106 proposing a community investment scheme and a reduced energy tariff for local residents, as part of its application for planning permission for a wind farm development, was not capable of being a material consideration as it failed to meet the requirements of the CILR 2010, reg 122.

7See also NPPF, paras 204 and 206, which mirror the statutory tests in reg 122.

8[2012] EWHC 140 (Admin) at [50].

Planning Obligations 203

9.4 See also R (Mid-Counties Co-operative Ltd) v Forest of Dean District Council9and R (Mid-Counties Co-operative Ltd) v Forest of Dean District Council,10both of which cases involved planning permissions (both of which were quashed) for an out-of-town retail store supported by planning obligations which required the developer to pay substantial contributions towards the enhancement of the town centre. Both cases were followed by R (Tesco Stores Ltd) v Forest of Dean District Council.11This case again involved the construction of a retail store on the outskirts of a town where the developer had put forward a section 106 planning obligation offering a package of financial contributions in order to help mitigate the adverse impacts associated with the proposed development. The planning application was recommended for refusal, but the LPA resolved to grant permission, subject to conditions, on the basis that the proposal would safeguard existing jobs at a site which was going to be demolished and rebuilt, that it would create new jobs and that the impact arising from the proposal would be mitigated by the section 106 agreement. The application to quash this decision failed, first, as it was found by Patterson J that the committee members were entitled to disagree with the recommendation of planning officers, provided they had a reasonable basis for doing so. Members were clearly entitled to give greater weight to employment considerations than the officers did, and the weight to be given to such a material consideration was entirely for the decision-maker. Secondly, it was said that it was axiomatic that an LPA had to apply the CILR to its decision-making process. That meant, in relation to a section 106 obligation which had been offered by a developer, that a decision-maker had to approach its assessment to the statutory tests with appropriate rigour. What was appropriate would vary with the circumstances of each case. The committee members had first to consider whether there was sufficient information available to them to take the section 106 agreement into account, and then to be aware of, and apply, the statutory tests. That was not something which, in the circumstances of the instant case, had to be applied with mathematical exactitude. The starting point for the committee members was an acceptance of harm to the city centre. It could be inferred that the members were satisfied that they had sufficient information to be able to take the section 106 agreement into account. They were looking for a partial amelioration of harm. The presumption in favour of refusal, applying the National Planning Policy Framework 2012 (NPPF) (the proposal was contrary to the NPPF and policy CSP.12 of the core strategy as there was insufficient need for a store of the size proposed and, due to its scale, it would have a significant impact on the vitality and viability of the town centre, and the proposed section 106 agreement also failed to make provision for the necessary contributions to mitigate the impact on the town centre), was capable of being overcome by the weight that members attached to the material consideration of

9[2013] EWHC 1908 (Admin).

10[2014] EWHC 3059 (Admin).

11[2014] EWHC 3348 (Admin).

204 Planning Law: A Practitioner’s Handbook

employment, and taking into account what was offered in the section 106 agreement. The committee members’ decision accorded with their view that the benefits were sufficient to mitigate the residual harm caused by the development, at least in part, and they were content to accept harm to the retail centre of the Lydney town centre. That...

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