Section 106 Obligations and Grant Funding

Ensuring new developments provide the required services, infrastructure and ammenities to serve new and existing communities

This section provides information about Section 106 (S106) planning obligations and the subsequent grant funding 

What is a Section 106 Planning Obligation?

Planning obligations are created under Section 106 of the Town and Country Planning Act 1990.  They are therefore known as 'Section 106 obligations'.  They are legally binding obligations (agreements) that are attached to a piece of land and are registered as local land charges against that piece of land.  Planning obligations enable a council to secure funding contributions towards services, infrastructure and amenities in order to support and facilitate a proposed development.

The requirements of a Section 106 obligation will vary according to the size, impact and nature of the proposed development.  At Malvern Hills District Council, our planning officers rely on the adopted Malvern Hills District Local Plan 2006 as well as Supplementary Planning Documents (SPDs) to inform applicants of the requirements for their particular development proposals.

What is the purpose of these obligations?

Planning legislation includes the essential principle that developments should pay for the social and physical infrastructure to support and facilitate a development.  It would not be fair or reasonable to expect a developer to contribute towards existing service deficiencies such as a shortage of school places or existing deficiencies in public open space sport and recreation facilities, or repairs to the highway.  However, it would be fair and reasonable to expect them to contribute to limiting the impact of their own development on the local area.

How is the type and level of contribution decided?

The key principles for establishing Section 106 obligations are defined and structured in the Circular 05/05, and are also referred to in a number of Planning Policy Guidance notes (PPGs) dealing with specific policy management issues.  For example, PPG13 - Transport, gives detailed guidance on contributions for measures to assist public transport. Circular 05/05 defines the parameters for the negotiation process and establishes that contributions must be:

• Relevant to planning;
• Necessary;
• Directly related to the proposed development;
• Fairly and reasonably related in scale and kind;
• Reasonable in all other respects.

Planning officers will not ask for any contribution unless it relates 'fairly' to the development.  If a developer offers any unrelated contribution as an inducement, planning officers will disregard this when determining the application.  For example, it may not be proper for a local planning authority to seek contributions towards the development of a public swimming pool arising from an application for a supermarket development.  However, it may be appropriate to expect a supermarket developer to contribute towards highway improvements.

In practice, it is not unreasonable for communities to identify those areas where there are weaknesses in social and physical infrastructure to which contributions could be sought from new development.  For example, affordable housing, public open space, sport and recreation facilities and local environmental improvements.

How will the contribution be spent?

Section 106 obligations will often specifically identify what the financial contribution will be used for.  Working groups, including officers from all potential 'spending' service units such as Housing, Community Services and Economic Development, work with the Section 106 Officer to ensure that contributions are correctly allocated and handled.  In some cases, individual S106 financial contributions will be pooled over a number of years, to provide major infrastructure or service improvements. In addition, our Section 106 Officer monitors completed agreements to make sure that once the development has been started, agreed payments are received by the District Council on-time and if they are not for any reason, arrangements are made to collect late payments. 

How are priorities for contributions established?

As the Local Planning Authority, one of our key roles in this process is to identify and prioritise 'needs' within our District and to consider these alongside present and proposed developer contributions.  This work identifies where there might be a lack of play equipment in a residential area; no community hall where one is needed; or a very limited amount of affordable housing, for example. The District Council has commissioned an audit of existing public open space, sport and recreation facilities across the District to identify where there were deficiencies, so that future developer contributions could be targeted into these areas.

As part of this process and by working with partners such as Parish and Town Councils we aim to build up a Community Ideas Database.  This contains 'needs' or 'wishes' that have been identified by councillors, parish councils, residents' associations and other interested groups.  Planning officers will then be able to refer to this list when they are negotiating Section 106 obligations with developers.

Application to Vary a Section 106 Planning Obligation

• Application to Vary a Section 106 Planning Obligation

Who to contact for information and advice

If you have any questions about planning obligations please contact the Section 106 Officer, email:- developmentcontrol@malvernhills.gov.uk

If you would like advice about the sort of schemes that may be supported through S106 obligations please contact the Community Services Team.

For further information on the relevant policies,

Please follow the links below:

Affordable Housing SPG -The purpose of this document is to provide guidance on the implementation of the Council's affordable housing policies (from new housing development).

Open Space SPD - Malvern Hills District Council has prepared an Open Space Supplementary Planning Document (SPD) as part of the Local Development Framework (LDF) for the District.

Developers Contributions and Obligations - This provides detailed policy guidance on the nature and level of contributions (usually either land or financial) required from development sites.  

• PPG 17 Open Space, Sport and Recreation Assessment Report

• Section 106 Education Contributions - April 2012 Table of Charges

To view details of successful projects that have been funded through Section 106 Contributions, please follow the link below:

Section 106 Case Studies