Community infrastructure levy and Section 106 agreements

Planning expert Ben Garbett successfully acted for the developers of a motorway service area whose planning consent had been challenged under the Community Infrastructure Levy Regulations.

First published in Planning Magazine.


Development will often give rise to impacts which require mitigation in the form of new infrastructure, services or facilities. The traditional means of securing these benefits is via 'planning obligations', commonly known as section 106 agreements, which are entered into between planning authorities and applicants for planning permission.

The use of s106 planning obligations has been scaled back by the introduction of the Community Infrastructure Levy (CIL) Regulations 2010 in preparation for the roll out of CIL charging schedules by authorities. The CIL will be levied on various types of new development, and assessed according to the authority's assessment of economic viability in different areas.

Whilst the nationwide adoption of charging schedules is likely to be slow and patchy the basic idea is that, where adopted, CIL monies will be used to fund previously identified infrastructure requirements, such as roads, schools, and hospitals. This will reduce the scope for s106 obligations negotiated on site by site basis, although they will continue to be used to deliver site specific mitigation where deemed necessary.

Over the years s106 agreements have become the dumping ground for a host of planning authority demands, which may sometimes have only a loose connection with the proposal, leading some objectors to complain that permissions can be 'bought and sold'. This issue now comes under the spotlight again with regulation 122(2) of the Community Infrastructure Levy Regulations 2010.

Since 06 April 2010 regulation 122(2) CIL has required that a planning obligation may only constitute a reason for granting planning permission if it is necessary to make the development in question acceptable in planning terms, is directly related to the development, and is fairly and reasonably related in scale and kind to the development. This puts much of the previous guidance onto a statutory footing, whilst it has long been a requirement that an s106 planning obligation must be 'necessary' to the grant of permission.

So, in what circumstances is it now permissible for a section 106 agreement to be counted as a reason for the grant of planning consent? That question has been raised in the first court case of its kind scrutinising the legal effect of regulation 122(2) CIL, where Keystone's Ben Garbett acted for developers defending its grant of planning consent.

R (Welcome Break Group Limited, Roadchef Limited and Others) v Stroud District Council and Another

The development in question was a new motorway service area (MSA) close to junction 12 of the M5 motorway near Gloucester. The planning agreement entered into by the developer included requirements for the applicant to submit a local employment and training policy and to use reasonable endeavours to stock retail goods and produce sourced locally and regionally in the shops and cafe. The applicant's planning statement identified the relevant national and regional policy justification for these commitments.

Planning permission was originally granted in December 2010, on completion of the s106 agreement. The operators of the motorway service areas to the north and south of the site, together with local Parish councils and objectors, issued judicial review proceedings challenging that decision on various legal grounds. The matter reached a hearing in the High Court, where one of the issues concerned legal compliance with regulation 122 CIL.

The High Court judge specifically rejected the claimant's argument that regulation 122 compliance was a matter for the court, and that in granting permission, the local planning authority had taken into account obligations that were unnecessary and immaterial. This was a matter firmly within the discretion of the decision maker to decide, and there was no obvious error in the way that the authority had approached that question, having referred to the relevant guidance (Circular 05/05). So then, the legal position is apparently unchanged: if the obligations are materially connected to the development then it is for the authority to decide what significance it places on those matters when deciding if permission should be granted or refused.

The claimants are currently seeking leave to appeal.

Ben Garbett is an experienced planning law specialist in the Keystone Commercial Property Team. Ben deals with a broad range of planning, highways and compulsory purchase matters.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

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