When councils can charge planning agreement fees and when they cannot

We have written an article for Waste Planning magazine.

You can read the article in full below, or read "When councils can charge planning agreement fees and when they cannot" on the Waste Planning website [Paywall].

Many planning applications for waste related schemes require the completion of a planning agreement under S106 Town and Country Planning Act 1990, to mitigate the effects of the scheme.

In the recent case of Oxfordshire County Council v Secretary of State for Communities and Local Government [2015] EWHC 186 (Admin) the High Court heard a County Council challenge to a planning inspector’s decision that provisions in a S106 agreement - which required developer payments towards Council administration and monitoring costs associated with the S106 agreement obligations – did not comply with regulation 122 of the Community Infrastructure Regulations 2010 (“Regulation 122”).

Under Regulation 122 planning obligations can only be required if they are necessary to make a development acceptable in planning terms, are directly related to the development and are fairly and reasonably related in scale and kind to the development.

The S106 agreement submitted to the planning inspector contained a “blue pencil clause”. This means that the inspector was able to strike out any provisions that did not meet the Regulation 122 tests. The inspector found that a number of the obligations in the agreement were not compliant with Regulation 122, including the requirement to pay the administration and monitoring costs.

The County Council challenged this decision in the High Court. It was rejected. The judge found that the inspector’s decision was correct and that it was part of an authority’s normal functions to monitor, enforce and administer planning obligations. Payment of these costs was not necessary, therefore, to make the development acceptable in planning terms, as Council staff were already employed to deal with these tasks.

In addition, the Council proposed to charge a standard fee based on a set proportion of the financial contributions. This approach to determining the level of a fee is not uncommon. The High Court held that such standard fees, payable in advance of the commencement of the development, were also unacceptable, as they did not reflect any assessment of the work which a Council would have to undertake to monitor and administer the relevant obligations.

The Court acknowledged that there may be exceptional cases where such charges would be justified (such as where the obligations relate to a particularly large or complex development that requires additional resources to be employed to enable monitoring to take place). This case does not, therefore, present a blanket prohibition on imposing such charges.

That said, this case could have significant implications for local planning authorities (LPAs) and applicants, as the imposition of monitoring and administration charges, especially if calculated by reference to a particular formula, could well be resisted by applicants unless they can be justified. It may also lead to challenges to other comparable S106 provisions if they can equally be argued to be unnecessary to make the development acceptable in planning terms.

However in some - perhaps many - cases where an applicant considers that the LPA’s proposed charges are outside the scope of this decision, the sums involved and the potential costs of an appeal (to try and avoid such contributions) may make an appeal unattractive – unless, perhaps, there are other aspects of the matter that they want to challenge in any event.