Planning Obligations SPD 2021
4.0 TRIGGER POINTS FOR PLANNING OBLIGATIONS
4.1 For larger development schemes payments can be staged with the payment of obligations required when specific stages of a development are reached. These stages, often referred to as trigger points should be agreed in the S106 agreement and linked to the time and/or delivery of particular milestones for example commencement of development, first occupation, or at 50% occupation of the number of dwellings.
4.2 Generally the first tranche will be required on commencement of development and can be up to 50% of the total amount of the contribution. The remaining tranches would be required at an agreed level of occupation, for example, 50% of the total number of dwellings occupied.
Indexation
4.3 Financial contributions are based upon the costs of infrastructure. Financial contributions may therefore be indexed (i.e. index-linked to inflation) to ensure that they retain their original 'real value'. The base date and appropriate index for the planning obligation(s) to be applied will be set out in the legal agreement. Where a formula has been set for the calculation of contribution levels, any cost figures used will be updated regularly to take account of inflation (for example using BCIS, RPI or CPI). The cost figures are the sums required at the time of negotiation. The County Council may also request their payments are index linked.
Interest
4.4 Late payment of financial obligations significantly beyond the stipulated trigger points will attract interest at 4% above the Bank of England base lending rate in force at the time, from the date that the payment falls due to the date the actual payment is made. This rate of interest will be specified in the legal agreement.
Maintenance of assets secured through planning obligations
4.5 It is important that obligations are delivered to the required standard and are subsequently maintained. A developer should ensure that there are adequate arrangements made to ensure appropriate maintenance and management of the asset to prevent it from becoming a future liability.
4.6 It should not be assumed such assets will be taken on by the local authority. Each case will be considered on its own individual merits. Where the Council does not take on the maintenance of an asset, the maintenance may be provided by a Management Company (MANCO) or by a Parish or Town Council.
Questions
The SPD has been amended to provide further details on assets maintenance.
(7)Q4. Do these revisions provide clear guidance on this issue? YES/NO Please explain your answer.
Legal and Monitoring Fees
4.7 The District Council as a party to the S106 agreement or unilateral undertaking will seek its full legal costs associated with the negotiating, preparing, drafting, amending, producing and sealing of S106 agreements/unilateral undertakings. It will include, where required, the costs of obtaining independent or specialised advice to validate aspects of the contributions.
4.8 Part 10 of the Community Infrastructure Levy (Amendment) (England) Regulations 2019 permits a local authority to secure fees to monitor and report on planning obligations contained within a Section 106 agreement, especially where the scale of development is complex and needs long term monitoring.
4.9 The sum of the monitoring fee to be paid to the Council must not exceed the Authority's estimate of its cost of monitoring the development over the lifetime of the planning obligation(s). Monitoring fees based on current costs are set out in the schedule of costings and will be reviewed periodically as necessary in line with changing costs.
4.10 Generally the first tranche will be required on commencement of development and can be up to 50% of the total amount of the contribution. The remaining tranche would be required at an agreed level of occupation, for example, 50% of the total number of dwellings occupied.
Questions
The SPD has been updated to include further guidance on monitoring and a Monitoring Fee Background Evidence Paper has been prepared.
(5)Q5. Does this revised section of the SPD provide clear guidance on this issue? YES/No. Please explain your answer.
(5)Q6. Do you have any comments about the Monitoring Fee Background Evidence Paper? YES/No. If Yes, please provide details.
Bonds and Enforcement Action
4.11 The Council may request that a bond is obtained to mitigate the risk of defaults on the fulfilment of planning obligations (and payments in the case of commuted sums) based on the merits of each individual case.
4.12 Notwithstanding the opportunity that exists for obligations to be varied, the Council will seek to ensure that all obligations are fulfilled and may be prepared to accept staged payments if needed to ensure that the terms of the original agreement are met.
4.13 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 or not been made on time or in accordance with agreed payment schedules or "trigger" points. For further information on the approach to planning obligations please contact: Planning Obligations Officer, Harborough District Council.