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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 27/03/2007
Surrey Collaboration Project - Section 106 Agreements Code of Practice

Waverley Borough Council


environment and leisure overview and scrutiny Committee
13TH MARCH 2007


[Wards Affected: All]
Summary and purpose:

This Code of Practice was prepared as part of the collaboration project amongst the 11 Surrey Districts and Surrey County Council. Its purpose is to set out common practice and procedures for capturing infrastructure improvements across the Surrey districts in accordance with adopted policies and recommended best practice. It is suggested that Districts will use it as an interim administrative measure and eventually incorporate the work into a Supplementary Planning Document.

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

It is proposed that the Code of practice be implemented from 1st July 2007. The report was considered by the Environment and Leisure Overview and Scrutiny Committee on 13th March 2007 and its comments are set out below.

Environmental implications:

Some environmental stakeholders would be beneficiaries.

Social / community implications:

It is likely that there will be many positive social/ community implications

E-Government implications:

No direct e-government implications.

Resource and legal implications:

It is anticipated that this policy will generate a significant level of funding for investment in infrastructure and services within the Borough. Officers will develop a process for identifying projects and areas where expenditure is needed to ensure the funds are utilised appropriately. This process will also include the control of monies due to be spent by partner organisations such as Surrey County Council, and it will propose arrangements for monitoring and reporting. It is also essential that a robust legal procedural framework is established.


1. This work has been produced after assimilation of recent advice, including Government advice in Circular 05/05 ‘Planning Obligations’ (Office of the Deputy Prime Minister July 2005), and Audit Commission recommendations published in August 2006: “Securing Community Benefits Through the Planning Process – Improving Performance on Section 106 Agreements”

2. The latter commented that S106 Obligations have become increasingly important to the provision of public services. However, there is a wide variation in what Councils secure under the S106 process – some are missing out on opportunities to secure benefits through the planning process.

3. Both Government and the Audit Commission recommend the preparation of detailed planning policy on planning obligations. The latter audited a number of Councils and found that those without a detailed policy secured substantially fewer community benefits than others in similar circumstances.

4. The Surrey Collaboration Project was set up in 2006, and comprises a number of groups of officers and Members working under a series of subjects which it was recognised would benefit from joint working practices. As well as S106 Agreements, these include Local Development Frameworks, training, new guidance and legislation, enforcement services, conservation services and joint advice.

5. The issue of Section 106 Agreements was chosen because it was evident 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 Local Development Framework

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

7. It is likely that the revised Core Strategy will eventually include an appropriate general policy about the principles and use of S106 obligations. More detailed policies will be included in a stand alone ‘Planning Contributions’ SPD. It is likely that this will be produced before the Core Strategy, and will therefore be derived from the Local Plan Policy D14: Planning Benefits.

The Draft S106 Code of Practice

8. The collaboration project has produced the draft Code of Practice included as Annexe 1 with the intention that this is brought into use at the earliest opportunity across the county. The current working assumption is that it will be used for all applications submitted after 1 July 2007.

9. Work has concentrated in three areas, starting with the development of formulae and standard charges for smaller developments (the 'tariff'). This is an innovation in Surrey and will capture contributions from those smaller schemes that make up the majority of housing and commercial applications.
10. Second, the simplification of the application procedure, using a flow chart and standard documents. This is important because the preparation of a S106 obligation has historically been a time consuming process, resulting in applications failing to meet the delivery grant targets. It is essential that the many smaller applications that will now be covered by S106 obligations continue to be dealt with quickly.

11. Finally the development of a robust monitoring system, to ensure that funds are collected and then spent. At the time of writing there is still work to be done on this element, but it is anticipated it will be ready before first implementation of the code.

12. A number of developers were consulted on the Draft Code at the end of 2006, but few comments received. It was considered that developers were expecting this practice to begin in Surrey as it has been in other South East districts, and that they would build the tariffs into their costs.

13. Counsel’s advice has also been sought and incorporated into the Code of Practice.

Status of the Code

14. The Code of Practice includes a section explaining the status of the document (see attached) so it is not necessary to repeat it here. Suffice it to say that it uses current Structure Plan policy as its base.

15. Given that much of the content is administrative and it is based on existing policy there is no reason why early implementation is not possible. However, Government advice is that such policy statements are best embedded in the LDF. As a result, taking into account the specific advice and recommendations in Circular 05/05, the best option is for it to be processed individually by each district and adopted as an Interim Supplementary Planning Document. In principle that can be done relatively quickly and it is not necessary to wait for the adoption of the emerging Core Strategy policies.

16. Further detailed recommendations will be made by the Collaboration working group on how this should be progressed in detail. The important task at this stage is to add the work to the current Local Development Scheme to allow the adoption process to move forward in accordance with the regulations.

Implementation of the Code: Timetable

17. The work to produce the final Code is still ongoing, and it is likely that further amendments or enhancements, with particular emphasis on avoidance will need to be made. It is anticipated that this will be achieved by the 1st March. It is requested that these minor amendments may be delegated to officers.

18. A workshop for Development Control staff is proposed for the end of March.

19. At the beginning of April, launch information will be prepared and districts will circulate this to stakeholders, regular applicants and prospective developers to alert them of the need to include the tariff payment in their cost calculations. It will also be displayed on the Council’s web site and attached to application packs.

20. A similar note will need to be circulated to prospective beneficiaries to alert them to the commencement of an enhanced income stream.

21. Both developers and beneficiaries will be involved in the statutory consultation as part of the SPD process and the code may need to be amended in the light of that before final adoption.

22. It is also anticipated that by 1st April the group will have provided a separate Tariff Justification document addressing the main principles and county tariffs, and this is seen to be particularly necessary in relation to the larger charges for education and highways. Each district will need to develop programmes for spending the smaller district tariffs, and will need to add their individual authority’s local tariff justification. The Tariffs and Monitoring Costs

23. Details of these are set out in the attached code. To summarise, the likely tariff levels currently proposed will result a payment of about 8,000 per unit for a 2 bed flat and 11,500 for a 4-bed house. When fully operational there will be significant additional monitoring workload so a monitoring charge of 5% will be added. This would be likely to generate sufficient funds in each district to employ a dedicated S106 monitoring officer.

Environment and Leisure Overview and Scrutiny Committee

24. The Environment and Leisure Overview and Scrutiny Committee considered this report at its meeting on 13th March 2007. Members were concerned about transparency of accounting, particularly in respect of County issues such as highways and schools and were keen that monies raised would be spent on infrastructure in the villages/towns/wards where the development was situated. Officers confirmed that it was the aim for monies raised to go to specific local infrastructure and that how the collected monies were spent would be monitored. It was also confirmed that affordable housing would be excluded.

25. It was also stated that the implementation date of 1st July 2007 would relate to applications determined after that date, and not applications submitted. Members also emphasised the need for the training element to be highlighted.


It is recommended that

1. the Section 106 Code of Practice be adopted as an interim document prior to the production of a Planning Obligations Supplementary Planning Document; and

2. the Council be recommended to grant delegated powers to the Director of Planning and Development, in consultation with the Planning Portfolio Holder, to make any revisions to the Code of Practice, as put forward by the Surrey Planning Collaboration Group, and the Scheme of Delegation be amended accordingly.

Background Papers (DoPD)

Government Circular 05/2005; DCLG Planning Obligations: Practice Guidance; Audit Commission 'Securing Benefits Through the Planning Process'


Names: J. A. Falconer Telephone: 01483 523294
E-mail: jfalconer@waverley.gov.uk