Developer Contributions - S106 Agreements

Set out below is a summary of the type of S106 contribution that the Council may seek and the relevant Local Plan policies.

The above policies can be found in the Land and Planning Policies Document - LAPP (2020) (Part 2 Local Plan).  

Since the adoption of the Local Plan, the government has made significant changes to the Use Class Order. The Council has prepared this Statement on Use Class Change which sets out how policies in the Local Plan and Supplementary Planning Documents that refer to specific use classes can be applied in light of these changes.

Other planning obligations may be necessary to make developments acceptable in planning terms. The need arising from the development will be determined by the scale and nature of the development on a case by case basis.

In certain instances additional guidance to Local Plan policies is provided in the form of Supplementary Planning Documents and Guidance. Currently the following documents provide details of how contributions will be determined for the following infrastructure.

Please view the Adopted Supplementary Planning Documents and Guidance page for further details.  Details of any new Supplementary Planning Documents including all consultations will be set out in our Latest News webpage.

The cost of S106 contributions will be updated when new information is made available.  Details of updates contributions will be set out on the S106 Contributions revised costs page.

S106 Estimator

To help make the process for determining of S106 open and transparent a new tool has been produced to give a summary of likely financial contributions for the following infrastructure;

• Affordable Housing
• Open Space
• Education; and
• Employment & Training

It should be noted that this is a working tool that will be adapted to changing guidance and will be reviewed as new Supplementary Planning Documents are produced and as contributions are reviewed annually. It is imperative therefore that the latest version of the S106 Estimator is always downloaded.

In order to address and agree issues that would need to be covered by planning obligations at an early stage, the council may require draft heads of terms to be submitted as part of a planning application where planning obligations are required.

The draft heads of terms should set out clearly the obligations that the developer/landowner is willing to be bound by, in order to meet the needs generated by the development that are not going to be met as part of the development scheme itself. The draft heads of terms should also include the agreed timing/triggers for satisfying the obligations.

The starting point for all applications will be that full, policy compliant contributions will be provided in accordance with the adopted local plan unless there is suitable, sufficient and justifiable evidence to depart from this.

If an applicant considers there to be issues of viability due to the level of contributions being sought which would render a proposal undeliverable, they are required to submit robust viability assessment. Where such an assessment is submitted this will be independently reviewed with the applicant required to pay the council’s costs for having this work undertaken. The person or organisation used for the independent review will be at the council’s discretion. 

Where it is found the normal requirements (on site provision of infrastructure or financial contribution) would make the scheme unviable and the application is still recommended for approval without a policy compliant S106 agreement, the application will be determined by the Planning Committee with an officer report setting out the reasons for any reduction in contributions.

Monitoring and Administration Fees

All S106 agreements require monitoring on a regular basis to determine whether any triggers for payment have been reached. These trigger points can include for example commencement, completion or occupation of development.  It is only when these triggers are reached that contributes are required to be paid.  Although the onus is on developers informing the Council when these triggers are met, this is not always the case. 

To cover some of the cost of monitoring and administrating S106 agreements, 3% of S106 contributions are currently top-sliced off to a maximum of £6784 (2023) subject to the maximum cost increasing in line with the Retail Price Index on or around 1 April each year. 

Legal Fees

The council's reasonable legal costs associated with the negotiation, preparation and completion of the s106 agreement are recoverable from the developer. These are not part of the planning obligation itself rather a charge for work done by the Council and they do not therefore form part of the planning obligation calculation.

The Council in line with recent changes to Government legislation is required to produce an annual Infrastructure Funding Statement (IFS).

The IFS provides information on developer contributions, which are used to provide infrastructure to support development within the City to help mitigate impacts caused by development.  It includes information on the contributions required, received, how financial payments have been used and retained. 

Further details can be found on the Infrastructure Funding Statement page including the latest IFS.

Infrastructure Funding Statements (IFS)

Details of a new nationally set ‘Infrastructure Levy’ were published in 2020 in the government’s White Paper, ‘Planning for the Future’. The government has said that it should see at least as much money raised to pay for local infrastructure and affordable housing as by the existing system of developer contributions in the planning process which would be scrapped.

Instead of negotiated Section 106 Agreements and the separate, locally set CIL, the government is proposing to introduce a single, nationally set ‘Infrastructure Levy’ as a proportion of the sale value of a development, above a minimum threshold. The aim is to raise more money for infrastructure and deliver more affordable housing whilst removing the delay and uncertainty that is considered inherent in negotiated agreements.

Further details of how and when this replacement levy will be introduced are awaited. In the meantime, the current S106 requirements remain. Even when replaced, there will remain the need for the Council to monitor and administer existing S106 Agreements and developers to pay any monies owed or provide agreed infrastructure as part of an agreement.

The statutory tests are set out in regulation 122 (as amended by the 2011 and 2019 Regulations) and as policy tests in the National Planning Policy Framework.

S106 Regulations states that such agreements can only be imposed where;

• necessary to make the development acceptable in planning terms;
• directly related to the development; and
• fairly and reasonably related in scale and kind to the development.

The city council does not currently apply CIL but will continue to keep under consideration the need to introduce charging schedule, having regard to local viability conditions and any future review of the national system.

Set out below are definition of often S106 terms used.

If you have any questions, please direct them in the following ways: