Waverley Borough Council Home Page Waverley Borough Council Home Page

Waverley Borough Council Committee System - Committee Document

Meeting of the Environment and Leisure Overview and Scrutiny Committee held on 13/03/2007
Planning Obligations and Infrastructure Provision



Code of Practice

Interim Supplementary Planning Document - Draft for Consultation

This Code of Practice explains how Waverley Borough Council (and in general the other district councils in Surrey) will implement Planning Obligations under section 106 of the Town and Country Planning Act, 1990 (as amended). Such obligations are a recognised delivery mechanism for matters that are necessary to make a development acceptable. They have become increasingly important to the provision of many public services including highways, recreational facilities and education.

It contains:

1. Status of this Code of Practice
2. Background Guidance about Planning Obligations
3. Specific guidance about how Planning Obligations will be implemented by Waverley Borough Council.
4. Formulae and Standard Charges
5. Procedure Flow Chart

A separate document is available setting out in more detail the basis on which the formulae and standard charges have been calculated and the rationale behind them. See ‘Planning Obligations and Infrastructure Provision Code of Practice – Basis for Calculating Formulae and Standard Charges’

1 Status

1.1 Government advice in Circular 05/05 ‘Planning Obligations’ (Office of the Deputy Prime Minister July 2005) is that local planning authorities should include general policies about the principles and use of planning obligations in their new-style Development Plan Documents. It adds that more detailed policies applying these principles ought to be included in Supplementary Planning Documents.

1.2 This will allow developers to predict as accurately as possible the likely contributions they will be asked to make through planning obligations, and therefore anticipate the financial implications for development projects.

1.3 The advice continues that even where a local planning authority does not have a ‘high level’ policy specifically relating to planning obligations in its adopted local plan, it should set out detailed implications of other policies for planning obligations in a Supplementary Planning Document, based on the policies set out in Circular 05/05. This arrangement should only be followed in the transitional period before the general policies referred to in 1.1 above are adopted.

1.4 This Code Of Practice was initially prepared as part of a collaboration project among all 11 Surrey Districts as well as the County Council. It does not seek to change previously adopted or saved policies. Its purpose is to set out common practice and procedures for capturing infrastructure contributions across the Surrey Districts in accordance with adopted policies and nationally recommended best practice. Districts will use it as an interim administrative measure and eventually incorporate the work into an appropriate Supplementary Planning Document.

1.5 The principal innovation is the codifying of certain infrastructure contributions for smaller ‘windfall’ schemes, e.g. up to 14 dwellings. Previously these have often escaped any charges in Surrey, resulting in a significant shortfall in potential contributions to public services.

1.6 If national legislative changes such as the proposed Planning Gain Supplement become enacted then those parts of the scheme covered by the supplement would migrate to it.

1.7 Although it is a primarily administrative measure the Code of Practice was nevertheless the subject of consultation before formulation as a draft interim Supplementary Planning Document. The views of stakeholders have been taken into account and appropriate amendments made. Details of the consultation are set out in the background paper at www.etc.

2. Background Guidance about Planning Obligations

Legal Context

2.1 The power of a local planning authority to enter into a planning obligation with anyone having an interest in land in their area is contained within section 106 of the Town and Country Planning Act, 1990 as amended by the Planning and Compensation Act 1991). Planning Obligations made under section 106 comprise both obligations and unilateral undertakings. Government advice on the use of section 106 is contained within Circular 5/05 ‘Planning Obligations’ (Office of the Deputy Prime Minister July 2005).

2.2 An obligation may only be created by a person with an interest in the relevant land, and may be created either by means of an agreement with the local planning authority or by means of a unilateral undertaking. An obligation may restrict development or the use of land, need specific works to take place or need a financial contribution towards something (for example a new community building or play area). Contributions may be in the form of one-off payments, phased payments over a period of time, related to defined events during a development or may cover maintenance payments.

2.3 The main features of a planning obligation are:

· It applies to the land, and not to the individual owners or applicants seeking planning permission. This means that enforcing an obligation can involve the person or people who made or agreed to, the original obligation and anyone who subsequently acquires an interest in the land.
· It can also be enforced by a legal injunction (or a court order). Where a person has defaulted on a requirement to carry out works on the land the local planning authority may also enter onto the land to enforce the terms of the obligation and to claim back its reasonable costs arising from this action.
· It can contain a restriction or requirement for an indefinite or defined period. In the latter case, an obligation may end, for example, when specific works have been provided.
· It can provide for payments to be made, either by specific amount of by a formula, and need regular on-going payments to be made or for payment over a fixed period.
· It must be registered as a local land charge, for the purpose of the Local Land Charges Act, 1975). The land charges register is open to public inspection.
· It can be varied with the agreement of the local planning authority; there is also a formal application and appeals process in certain circumstances.

What can be included in Planning Obligations?

2.4 The planning system works on the principle that planning permissions cannot be bought or sold. Negotiations to gain benefits from development proposals must take place in a way which is seen to be fair and reasonable. By working in this way, planning obligations can improve the quality of development proposals which would otherwise be refused.

2.5 Planning Obligations must be related to the scale and nature of the development being proposed. Circular 5/05 requires Planning Obligations to meet the following tests. They have to be:

· Necessary to make a proposal acceptable in planning terms;
· Relevant to planning;
· Directly related to the proposed development;
· Fairly and reasonably related in size and type to the proposed development; and
· Reasonable in all other respects.

2.6 It follows that the Council acting as local planning authority cannot allow unacceptable developments because of unnecessary or unrelated benefits that the applicant may be offering. Equally applicants cannot be expected to pay for facilities which are only needed to deal with existing shortfalls in the area.

Current Best Practice

2.7 In recent recommendations the Audit Commission (Securing Community Benefits Through The Planning Process - August 2006) describes three different policy approaches to planning obligations dealing with community benefits: · The detailed service based policy, described in Circular 05/05. The basis of the approach is to develop detailed supplementary planning guidance (now SPD). This would determine the cost of mitigation based on formulae and standard charges that would vary according to the type of development and its location.

· A discretionary case by case approach based on Local and Structure Plan policies, with no detailed supplementary policy in place. · Fixed tariffs and formulae similar to the service-based policy above, but in aggregate form (as pioneered at Milton Keynes). The total contribution is based on the impact of all the proposed developments in the area, and shared between them. 2.8 The Commission's advice is that the first approach is preferred to the second, as experience has shown it is more successful in delivering benefits. In respect of the third approach they comment that it has potential advantages of clarity, transparency and simplicity of operation, but is still at an early stage of development.

2.9 Also relevant is the DCLG’s Best Practice Guidance, also published in August 2006. This guidance brings together a range of case study examples illustrating how local planning authorities (LPAs), developers and others are working together to deliver planning obligations effectively. The aim of the guidance is to provide LPAs and anyone carrying out development with practical tools and methods to help improve the development, negotiation and implementation of planning obligations.

Obligations and Planning Policies

2.10 The implementation of Planning Obligations in xxx Borough/District Council is supported by policies contained in the Surrey Structure Plan ( Policy DN1 ) and the ………….. Local Plan (Policy ).

Structure Plan Policy DN11 explains:

Local planning authorities will not permit development unless the infrastructure that is required to service the development is available or will be provided within a timescale determined by the local authorities. · By seeking to accommodate most of the additional development within settlements, existing infrastructure can be used more efficiently by utilising spare capacity and the provision of major new infrastructure can be kept to a minimum.
· LDFs should include an assessment of infrastructure capacity and opportunities for expansion. This will inform the scale and location of development opportunities. Where such a local assessment has been undertaken, it will justify a standard approach to developer contributions for all proposed developments within the relevant area.
· There is established good practice guidance in Surrey: Infrastructure and Amenity Requirements to Support New Development. This aims to set out a consistent and co-ordinated approach to securing infrastructure contributions throughout the county.

The Approach in this Code of Practice. 2.11 In the collaboration work that developed the initial draft of this document it was acknowledged that the existing situation in Surrey is unsatisfactory, and does not follow current best practice. Very few authorities have any formal guidance on handling S106 contributions, and those that do relate mainly to larger developments. There are a vast number of smaller schemes that escape any contributions, despite cumulatively adding significantly to the population and the infrastructure burden. The established Surrey Infrastructure Guide referred to above was a worthy attempt to address the problem was not followed through to implementation. 2.12 The situation cannot be resolved fully until each district has completed the necessary work on the Local Development Framework. Only during that process will formal detailed assessments be made of infrastructure capacity, allowing the kind of location-specific contributions advocated in the best practice guidance to be developed should that be appropriate. 2.13 However, in carrying this through it is important to consider the advantages of achieving some degree of common approach across all the districts in the county. There are many examples where general problems are encountered countywide resulting from the increase in population. Transport, education, open space and community facilities are all areas that are administered by local authorities and where experience has shown there is a general under-provision of facilities. There is already much evidence about the level of infrastructure capacity.

2.14 To this end a good degree of co-ordination will be encouraged in the emerging development plan documents. This will aim to establish standard charges and contributions for the same type of infrastructure. It is also evident that the ‘fixed tariff’ approach (the third approach referred to by the Audit Commission) has much to commend it for some of these types of contribution throughout Surrey, delivering clarity and simplicity. It is particularly appropriate for the smaller ‘windfall’ schemes that characterise much of the housing delivery in the county.

2.15 This Code of Practice aims to do two main things in advance of the main LDF process. First, standardise the administrative procedures and monitoring across the districts to improve delivery, clarity and transparency. Second, set out tariffs for those types of infrastructure contributions already collected on an ad hoc basis and which are suited to that approach. Again, this would improve delivery of finance and at the same time make the system more predictable for users. 2.16 What it cannot do is include tariffs on those types of infrastructure where each district already has very specific policies, for example affordable housing. These will have to continue to be addressed on a case by case or district by district basis as at present, until the LDF process has moved further forward. Further details are set out below.

3. How Planning Obligations are Implemented at xxx Borough/District Council

3.1 In the interests of providing a transparent process minimising uncertainty for applicants and unnecessary delays, the Council implements the Planning Obligations Code of Practice set out below. This incorporates the use of formulae and standard charges, up front use of Standard Heads of Terms, model section106 agreement (and model clauses), model wording for Committee reports and a scheme for monitoring obligations.

Overview of Process

3.2 The process is shown in summary form on the attached ‘Planning Obligations Flowchart’. The key components of the process are:

Formulae and Standard Charges

3.3 The formulae and standard charges which are expected to be built into a Planning Obligation, to meet the provision of infrastructure that is necessitated by a development proposal are set out in the attached ‘Formulae and Standard Charges’ document.

3.4 Circular 5/05 recognises that the use of formulae and standard charges can help to speed up negotiations and ensure predictability, by indicating in advance the likely size and type of contributions in advance. They are particularly suited to smaller ‘windfall’ sites where individual case-by-case negotiations would be time consuming and potentially expensive, yet result in a very similar outcome.

3.5 In some cases it is better to provide the infrastructure itself rather than a standard contribution towards it. This is more frequently the case on larger sites, where some of the infrastructure necessary to accommodate the new population would be provided directly on site. A good example would be children’s play space, and in these circumstances the standard tariff would be waived. See ‘Formulae and Standard Charges document. Where standard charges are applicable, they have been calculated using the cost of new provision per additional person. These will normally be reviewed annually and updated as necessary.

Pre-Application Discussions

3.6 Prior to the submission of planning applications for major development, applicants are recommended to contact the Council, with a view to seeking pre-application advice. Applicants will be expected to have familiarised themselves with the details of this Code of Practice and the Formulae and Standard Charges Document. Pre-application discussions should aim to provide an early opportunity to obtain the local planning authority view of proposals and also to clarify the likely content of a Planning Obligation. A Draft Heads of Terms document is attached and may assist in pre-application discussions.

Application Submission

3.7 Whether pre-application discussions have taken place or not, applicants should include with their applications a draft section 106 agreement or where appropriate a unilateral undertaking. Applicants should ensure that the requirements of the Formulae and Standard Charges document have been reflected in their submitted application. If the application does not include the required draft agreement or unilateral undertaking the Council will ask for these details to be supplied. If it is not received in a final form before a decision on the application is made there is a presumption that the application will be refused (see 3.10 and 3.11 below).

Model section 106 Agreement

3.8 A draft model agreement is attached and should be used as a template to adapt for submission with the application. This is based on the Law Society’s model agreement. Relevant parts of the agreement should be used to suit the circumstances of the proposal.

Application processed

3.9 With a completed application, to include a draft agreement, the Council will aim to process the application within the national target time for determination of applications.

Officer Report

3.10 This Code of Practice is front loaded to achieve the necessary early commitment to Planning Obligations that may be necessary to make a proposal acceptable in planning terms. Provided the code is followed, and necessary work is undertaken on the requirements of the Planning Obligation at an early stage, determination should be relatively quick. In view of this the Council will operate a practice of using dual recommendations where Planning Obligations are involved, and if the applicant has not completed the necessary work on the Obligation, the Council will refuse the application.

3.11 Model Wording for Committee Report Dual Recommendations:

Recommendation A

Subject to the applicant first entering into an appropriate legal agreement (at no cost to the Council) for/to secure………… , by no later than (date – 8 or 13 week target), permission be granted subject to the following conditions;

Recommendation B

In the event that the requirements of recommendation A are not met by (date – 8 or 13 week target), the Head of Planning be authorised to refuse planning permission on the following grounds:

1. In the absence of a completed legal agreement under section 106 of the Town and Country Planning Act, 1990 (as amended), the applicant has failed to comply with Policies …… of the……………..Local Plan in relation to ………….issues.”

Register as a Local Land Charge

3.12 Once completed the legal agreement is entered as a land charge and is available for inspection by the public.

Implementation and Monitoring of Planning Obligations

3.13 It is important that the undertakings given are complied with and any contributions are provided on time or as otherwise required by the Council or other benefiting stakeholder. The developer will be expected to inform the local planning authority when development is about to commence which will trigger the necessary steps to be undertaken to comply with the terms of the agreement.

3.14 Each district council will develop a monitoring database and will chase up contributions etc. Failure to comply may result in warning letters being sent and ultimately injunctive action to halt development on site until the necessary undertakings have been met.

3.15 Variation and discharge of undertakings will only be considered formally, whether by a deed of agreement or an application following the necessary publicity. If specific obligations are time limited and cannot be met within the prescribed period then arrangements will be made for any unspent financial contributions to be returned to the developer or owner. Note this would not normally apply to tariff payments.

3.16 Annual reports will be produced to highlight the various benefits resulting from undertakings implemented throughout the year and show how such improvements have contributed to the infrastructure and essential public services of the area.

3.17 Due to the level of new monitoring work that will result from the scheme a monitoring charge of 5% will be added to the total contributions calculated for each S106 document. This would be available to fund officer time in the Planning teams to ensure that money is collected and allocated to the appropriate beneficiaries, as well as collating and publishing the periodic reports highlighted in 3.16 above. It will also cover the time necessary to review the tariffs to ensure they are up to date.


4.1 The Audit Commission has identified the following areas where community benefits are secured through the planning process. In the following lists they have been grouped together to identify those that should be negotiated individually and those that are subject to a standard charge.

Individual Assessment or On-Site Provision Affordable Housing
Flood Defence
4.2. For larger sites applicants should always contact the Council first, as there may be circumstances where site-specific provision is more beneficial than payment of a standard charge.

4.3. More detail about the basis on which the formulae and standard charges have been calculated and the rationale behind them is set out in the separate document ‘Planning Obligations and Infrastructure Provision Code of Practice – Basis for Calculating Formulae and Standard Charges’.

4.4 The standard charges specified in the standard charges sheets below are set at a level to cover the new infrastructure needed by the number of additional occupants or workers that would be generated by the development. For the transport element of the tariff the number of additional parking spaces is also a factor in the calculation. 4.5 Where demolition is involved the figures for the existing development should be subtracted from the new development.

4.6 For a mixed residential and commercial development the charges sheets for both types of development should be completed and the totals added together.

4.7 In all cases a 5% monitoring fee should be added to the final figure.

4.8 Once calculated the total figure should be entered on the standard charges sheet and included with the application. It will become payable on commencement of the development. S106 Standard Charges Sheet - Residential Development

Stage One

Calculate the number of occupants in the development by completing the following table:
House Size
Number Proposed
Occupancy Rate
Number of Occupants
1 bed
2 bed
3 bed
4 bed
5 bed +
Stage Two

Identify the number of parking spaces: ______
Identify the number of occupants minus number of parking spaces: _______

Stage Three

Complete the following tables:

Charge Per Occupant
Total payments
Education (Primary)
Education (Secondary)
Equipped Playspace
Community Facilities
Environmental Improvements
Charge Per Parking Space
Charge per Occupant minus Parking Space
Total payments
Transport (Vehicle Access)
Transport (Sustainable Access)
Stage Four

Add totals from both tables to calculate total contribution: £_________________
Last reviewed on 1 January 2007

S106 Standard Charges Sheet - Commercial Development

Stage One

Calculate the number of workers in the development by completing the following table:
Land Use
Sqm proposed
Sqm per worker
Number of Workers
Financial/professional services
Restaurant or Pub
Research & Development
Light Industrial
Storage & Distribution
Community Services
Stage Two

Identify the number of parking spaces: ______
Identify the number of workers minus number of parking spaces: _______

Stage Three

Complete the following tables:

Charge Per Worker
Total payments
Environmental Improvements
Charge Per Parking Space
Charge per Worker minus Parking Space
Total payments
Transport (Vehicle Access)
Transport (Sustainable Access)
Stage Four

Add totals from both tables to calculate total contribution: £_________________
Last reviewed on 1 January 2007
1 For minor applications advised tariff applies; for major applications advised tariff used as basis for negotiations
2 See Model Unilateral Undertaking and Model Agreement
3 Committee report dual recommendations: 4 Record in Parts I and II of the Planning Register, as a local land charge, and within the Planning Obligations monitoring system

5 Regular reports made to committee as to monetary receipts and progress with implementation