Planning Obligations SPD

Ended on the 30th September 2015
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Chapter 4: Managing Planning Obligations

4.1 This section sets out for the guidance of applicants, infrastructure providers and community groups how Harborough District will manage the Planning Obligation process - from policy, considering applications, making and amending if needed S106 agreements, and monitoring the delivery of planning obligations.

4.2. The Development Plan - basis for considering obligations

4.2.1. Potential applicants and infrastructure providers should refer to the adopted development plan, coupled with national planning policy and guidance in order to help assess what may be required to mitigate the effects of development and comply with the CIL Tests. In Harborough District, for the purposes of planning obligations, this comprises the Core Strategy 2011 (to be replaced by a Local Plan during the period 2015-2018). Policy 12 seeks to secure appropriate infrastructure as part of development and a Local Infrastructure Delivery Plan sets out framework for what types of infrastructure are needed to support development levels specified in the Strategy. This is the starting point for the decision maker to assess whether planning obligations are needed to ensure delivery of appropriate infrastructure.

4.2.2. The Core Strategy is being replaced during the period 2015-2018 by a new Local Plan and a decision will be taken if a Community Infrastructure Levy should be set to supplement site specific planning obligations in order to help deliver infrastructure of District scale significance.

4.2.3. Infrastructure providers are encouraged to respond to consultation stages on development plans, particularly to help inform the Council's decisions on what is necessary to include within the Infrastructure Plan based on proposed development levels and the capacity of existing community infrastructure.

4.2.4. At this stage, the scope and scale of any requests for funding can be assessed and infrastructure providers can be engaged. Infrastructure providers can, through this process, understand the broader picture of service funding associated with a particular development or range of developments.

4.2.5. The District Plan has to be subject to its own viability assessment to confirm that its proposals as a whole are achievable and deliverable taking into account likely levels of developer and other funding of infrastructure. This does not replace the need to consider viability issues at a site specific level when individual planning applications are considered.

(3) Question 10:

Do you have any comments to make about Development Planning?

4.3. Pre - Application Stage

4.3.1. As set out in the Councils adopted Statement of Community Involvement, potential applicants are encouraged to discuss applications with the Council prior to submission..

4.3.2. At the pre-application stage discussions will take place between those submitting proposals for development and officers of the Council, in order to ascertain the potential impacts on infrastructure and the range of potential planning obligations for particular sites. Officers of the Council will decide based on the nature of the proposal whether specific infrastructure providers should be invited to attend to help advise at the pre application stage.

4.3.3. We also encourage potential applicants for all major residential, employment and mixed use schemes to carry out pre application consultation and as part of this to contact local organisations and identify what local infrastructure may need supporting The Parish Liaison Officer at Harborough District Council maintains a list of appropriate contacts at parish level and can help further.

4.3.4. It is important that appropriate information is available to a potential applicant to help assess how a proposal is likely to be considered and whether appropriate mitigation can be made through planning obligations to make the development satisfactory in planning terms.

4.3.5. Pre application discussions may be disclosed to District Councillors and Parish Councils where the potential applicant is content with this.

(10) Question 11:

Do you have any comments to make about Pre Application?

4.4. Submitted Applications

4.4.1. Planning applications should be accompanied by appropriate information which identifies the likely impacts of the development proposal on the local environment and local services. It is helpful if consideration can have been made as to the range of planning obligations considered necessary within the supporting information submitted.

4.4.2. Once a planning application is received, the authority will notify specified bodies, including all infrastructure providers representing services where there may be an impact.

4.4.3. The stakeholder will be directed to information concerning the application located on the Council's website and asked to respond within 21 days.

4.4.4. Relevant infrastructure providers /service areas may include:

Harborough District Council

  • Community and Sports Facilities;
  • Open Space and Recreational provision; and
  • Housing.

Leicestershire County Council:

  • Adult Social Care and Health;
  • Waste Management;
  • Education;
  • Economic Development;
  • Highways and Transportation;
  • Library Services; and
  • Sports & Recreation facilities.

Other Services:

  • NHS England;
  • Leicestershire Constabulary;
  • Leicestershire Fire and Rescue Service;
  • Water and Sewage Service Providers;
  • Public Transport Operators;
  • Utility Companies; and
  • Environment Agency.

4.4.5. All information related to submitted applications will be available electronically for infrastructure providers to examine. Infrastructure providers who identify that a planning obligation is required should set this clearly in a formal response to individual applications. The Council must decide that the obligation meets certain statutory tests set out in the Community Infrastructure Levy Regulations (known as the "CIL Tests").

4.4.6. In assessing whether a planning obligation should be applied to an application the Council will undertake a two stage process:

  1. Would the obligation meet the statutory tests as set out in Reg 122 of the CIL regulations?
  2. Is it of such significance in this particular instance that the application should be refused in its absence?

4.4.7. At stage 2 in particular the judgement should be informed by the impact of the obligation on the viability of the development where this is an issue (further information on viability is provided in para 3.52).

4.4.8. The LPA has to reconcile a number of competing demands in deciding whether any or all of the requests submitted should be met and where its priorities lie in determining which requests should be met.

4.4.9. Planning Authorities across Leicestershire have developed a protocol to assist in considering planning obligations. The purpose of this protocol is to set out three tests contained in Regulation 122 of the Community Infrastructure Regulations 2010 and provide details of what is assessed when considering these tests. It also sets out how the information supplied in support of an application for funding will be assessed. The Protocol is attached as Appendix 3 to this document.

4.4.10. Large commercial and employment generating developments may increase demands on infrastructure, therefore should there be a demonstrable need directly related to the development a contribution will be sought. The types of need may often be related to transportation, such as cycle ways and, footpaths but may extend to other types of contribution. One issue which the Council wishes to support in terms of larger employment generating development is the opportunity to work with developers to help secure local employment and, training opportunities during the construction and operation of commercial development. This may be done on a voluntary basis requiring no formal planning obligation - but the Council will investigate whether formal obligations may help to provide assurance and help ensure this occurs over time.

(9) Question 12:

Do you have any other comments about Making an Application?

4.5. Determining planning applications

4.5.1. In determining planning applications, the District Council as the local planning authority has responsibility for deciding which planning obligations are necessary to ensure developments are acceptable. In executing this responsibility the District Council will take account of adopted guidance and responses from all service providers listed in para 3.15 above.

4.5.2. Planning applications will not be determined unless there is a draft Heads of Terms for S106 Obligations agreed with the applicant in writing, placed on the planning register (the electronic database of planning applications and associated correspondence known as the Planning Portal) and included in reports, which sets out:

  • all specific types of infrastructure/projects to be delivered;
  • their cost (where this is agreed as a commuted sum); and
  • the timing of payment or delivery in relation to development.

4.5.3. This document provides guidance on practice but only covers the principal areas where contributions may be sought and it is neither exclusive nor exhaustive. Depending on the nature of the application the full range of relevant services or infrastructure will be examined, as needed, to mitigate the impact of developments, regardless of the responsibilities for different services or infrastructure.

(7) Question 13:

Would a model legal agreement template be useful?

(9) Question 14:

Do you have any comments about Determining Applications and appropriate Obligations?

4.6. Finalising the S106 Agreement

4.6.1. The Council's Legal Services section will draw up the draft S106 agreement - on receipt of full instructions from the relevant Case Officer from Development Management, in liaison with the legal representatives of the Applicant and any other interested party.

4.6.2. The initial draft will be placed on the Electronic Planning Register by the Case Officer from Development Management who will advise relevant Ward Members by sending a link to the Register.

4.6.3. Subsequent draft versions (version controlled, redacted as needed) will be placed on the Planning Register by the Case Officer following receipt from Legal Services.

4.6.4. Legal Services will negotiate the clauses and redraft the S106 as necessary in liaison with the Legal Representatives of interested parties, until consent to a final Agreement is reached.

4.6.5. All Members will be notified via the Member Information Service prior to the final Agreement being executed by the Council.

4.6.6. The Final signed version of the Agreement will be placed on the Planning Register as a public document by the Case Officer.

(10) Question 15:

Do you have any comments to make about Finalising the S106 Agreement?

4.7. Variations to planning obligations

4.7.1. Applications can be made to vary or remove a planning obligation at any time on the basis of a material alteration to circumstances since the application was originally determined e.g. that a viability issue has presented itself. Such applications will be processed as above, and relevant infrastructure providers will be notified and consulted where a change involves an obligation they have interest in. Councillors for the ward in which the application is made will be consulted.

4.7.2. If the application was originally determined by the Planning Committee rather than being delegated to officers, the Planning Committee will usually determine the application to vary the obligation.

(7) Question 16:

Do you have any comments to make about varying planning obligations?

4.8. Monitoring the implementation of planning obligations

4.8.1. Whether a planning obligation requires a developer to undertake some works on site or make a financial contribution, it is important that there is confidence that the planning obligation is delivered. The Council therefore employs an officer part of whose work is to monitor developments and ensure that, when development "triggers" are reached, the obligation is fulfilled (or in the case of a financial contribution - paid). Councillors for the ward in which the development occurs will be will be informed when such triggers are reached and obligations fulfilled.

4.8.2. The Council will also monitors the date when funding secured in relation to planning obligations has to be spent where these are set out in an agreement. Invoices are issued by the Council when the obligation involves financial payments.

4.8.3. Where there is a default on the fulfilling of a planning obligation, the Council will use its enforcement powers and in the case of a payment will deploy appropriate legal powers. Staged payment schedules may be agreed to assist developers. As referred to above the Council has to consider variations to planning obligations where viability issues are a concern which should mitigate this issue occurring.

4.8.4. The Council will alert those with responsibility for delivery of the relevant infrastructure to those dates when funding is transferred.

4.8.5. The Council will also monitor the delivery of the infrastructure improvement for which the planning obligation has been obtained. The Monitoring Officer will be informed from the relevant Council service manager when and for what purpose the planning obligation funding has been spent in relation to individual obligations, even where these have been pooled.

4.8.6. Monitoring and reporting will inform the community that appropriate infrastructure has not just been secured through a planning obligation, but that obligations have been fulfilled through the investment by the relevant agency in improved community infrastructure. It is also necessary to respond to past applicants who wish to establish that the obligation they made via a commuted sum has been spent on that for which they made the contribution.

4.8.7. Monitoring information relating to the above will be published within the Council's Annual Monitoring Report (AMR) (normally published each December) and will also be published on the Council's website.

4.8.8. The monitoring process not only provides a clear and transparent record of the obligations required but it also safeguards the developer in relation to the audit trail being provided of the record of payments and the proper use of contributions in accordance with the S106 planning agreement.

(7) Question 17:

Do you have any comments about monitoring planning obligations?

4.9. Other aspects of Planning Obligations

4.9.1. Tariffs or standard charges

4.9.1.1. Partially owing to the need to aid collective and fair contributions from a number of developments to help fund community infrastructure, the District Council has developed a series of standard charges (a tariff) in relation to aiding the funding of specified recreational provision and community facilities. These are referred to in subsequent parts of this document relating to these types of infrastructure. This parallels the County Council's approach to securing contributions to educational and other facilities and not only aids pooling of contributions by a number of developments to an individual project but helps to create certainty for developers about the levels of contributions being sought.

(6) Question 18:

Do you have any comments on Tariffs or Standard Charges?

4.9.2. Pooling

4.9.2.1. From April 2015, it is no longer possible to pool more than 5 or more planning obligations towards a specific project or type of infrastructure following amendment to the CIL (Community Infrastructure Levy) Regulations. TIn order not to prejudice the use of planning obligations to fund infrastructure, he Council will expect that infrastructure requests are made as specific as possible to a project, and that projects are described appropriately and justified accordingly. Given the need to retain some flexibility on how funding is spent it is considered that projects should be described no more specifically than "extending the capacity of (named facility / specific location) by the provision of (specific project)" .

>Question 19:

Do you have any comments on pooling?

4.9.3. Holding and spending of financial contributions

4.9.3.1. Financial contributions will be placed in a fund controlled by the signatory responsible for the provision of that service or facility. The contribution shall be spent on improvements to services or infrastructure to mitigate the impact of development.

4.9.3.2. The relevant service manager dealing with investment in service delivery shall be responsible for ensuring that the contribution is used in accordance with the terms of the agreement and for reporting on spending. If the facility is to be developed by a Parish Council, then the appropriate Parish Officer will be responsible. The relevant Monitoring Officer at either Harborough or Leicestershire County Council shall maintain appropriate information (obtained from the service manager) as to when the funding was used and for what purpose.

4.9.3.3. If the Service Manager or otherwise considers that more time is needed to spend the funding or to spend it differently, than provided for in the Agreement, he/she must provide the reasons for this and submit this to the Monitoring Officer. The Monitoring Officer will then contact the applicant to seek agreement and if there is need for a formal variation of a previous agreement, then the associated costs will be borne by the Service.

(9) Question 20:

Do you have any comments on holding and spending of contributions

4.9.4. Thresholds for planning obligations

4.9.4.1. Some obligations will only become due when a certain level of development is reached. These thresholds must be understood at the time of decision since a CIL compliant request for a planning obligation should set out this in the justification for the obligation.

4.9.4.2. The threshold should be set after a certain level of development has been reached and should be clearly set out by infrastructure providers in their responses to applications.

(8) Question 21:

Do you have any comments on thresholds for viability contributions

4.9.5. Viability

4.9.5.1. Should the requirement for developer contributions or for the provision of resulting infrastructure impact upon the viability of the development proposal, it will be the responsibility of the applicant to provide a financial viability assessment to seek to substantiate the situation and bear the cost of the Council's independent assessment of that viability assessment. The Council will determine and advise applicant of the cost for this work. The Council will use its contracted partner for this work.

4.9.5.2. The council will only proceed if the applicant agrees to meet this cost. Payment and terms are then agreed directly between the applicant and Council.

4.9.5.3. The re-appraisal will take the form of a written report that will assess the viability assessment submitted in relation to build costs (including land acquisition) and future sales values. It will conclude whether the author feels that the obligations being sought would make the development unviable or not.

4.9.5.4. The Council as the Local Planning Authority will decide the planning obligations that will apply. Each case will be considered on its own merits.

4.9.5.5. If the viability assessment is accepted as reasonable and shows that the development cannot proceed without reduced obligations, the Council may request lower contributions or no contributions for a particular site provided that the benefits of developing the site does not significantly outweigh the loss of planning obligations which were to make the development acceptable in planning terms.

4.9.5.6. The Council's practice is to seek to maintain, as far as possible, obligations towards community infrastructure and adopt a more flexible approach towards the affordable housing component (stock managed by social landlords) in order to assist in making the development viable. This may result in changes to the mix of the affordable housing component or look to, increase the numbers of smaller and cheaper market housing types (1 /2 bed properties) to help increase opportunities for private rented and first time buyers.

(6) Question 22:

Do you think the right balance is achieved between market reality and planning objectives? and Harborough's approach to viability generally?

(7) Question 23:

Do you have any other comments on viability?

4.9.6. Maintenance of assets secured through planning obligations

4.9.6.1. It is important that assets provided through planning obligations are delivered to an appropriate standard and are subsequently maintained. Subsequent maintenance of assets secured through planning obligations should normally be borne by the owner. If contributions are deemed appropriate, they will reflect the time lag between provision of the facility and inclusion within a wider maintenance budget. This is particularly an issue in respect of open space adoption. It should not be automatically assumed that such assets will be inherited by local authorities unless there are adequate sums transferred to fund future maintenance in perpetuity and prevent the present asset from becoming a future liability.

(5) Question 24:

Do you have any comments on maintenance of assets secured through planning obligations?

4.9.7. Legal, Other Costs and Management of the Obligation - Cost Recovery

4.9.7.1. It is appropriate for Harborough District Council and Leicestershire County Council who are party to S106 Agreements to recover costs associated with the negotiating, production and subsequent monitoring of developer contributions and to include these within the planning obligation.

4.9.7.2. This covers:

  1. the legal costs of creating agreements, (full re-imbursement of such costs);
  2. costs associated with obtaining independent or specialist advice to validate aspects of the contributions (full re-imbursement of such costs); and
  3. costs of monitoring the delivery of planning obligations for complex cases where monitoring is a reasonable requirement (the Council will normally seek a contribution of 15% of the total planning application fee within any agreement or £250 per individual contribution whichever is the greater, towards the costs of monitoring payments and implementation of schemes). In cases of large scale development which may require further monitoring work it may be appropriate to negotiate a fee based on Officer involvement rather than on the above formula.

4.9.7.3. Both Councils consider such obligations are CIL compliant. Given that monitoring cost contributions are relatively modest and given the size and likely time and complexity of any S106 agreement related to a development, it would seem appropriate and justifiable to require monitoring cost contributions especially where the scale of a development involves precise and complex monitoring, for example significant major developments and especially large urban extensions.

(7) Question 25:

Do you have any comments on legal, other costs and management of the obligation?

4.9.8. Bonds and Enforcement Action

4.9.8.1. Where officers deem there is a risk of defaults on the fulfilment of planning obligations (and payments in the case of commuted sums) the Council will request that a bond is obtained to mitigate against this possibility.

4.9.8.2. Notwithstanding the opportunity which exists for S106 obligations to be varied as described in section (e) above, the Council will seek to ensure that all obligations are fulfilled and will be prepared to accept staged payment methods if needed so long as these are within the terms and spirit of the original agreement.

4.9.8.3. The Council will use its corporate debt recovery process where necessary and its enforcement powers to stop development where the necessary obligations have not been made.

(8) Question 26:

Do you have comments on bonds and enforcement action?

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