Councils now ask applicants to enter into planning obligations with developers. This requires the applicant or developer to provide, or make contributions towards the cost of infrastructure made necessary by new developments (generally referred to as Section 106 agreements and unilateral undertakings).
Obligations have delivered community facilities such as playgrounds to schools, highway improvements and affordable housing. It is a cost that most people are unaware of being applied at the planning stage and paid for by the applicant or developer in return for obtaining planning permission. This applies across the country with councils asking for various obligations or funding in return for granting permissions. For example a recent levy now in place in a number of London Boroughs set up to contribute towards London Cross Rail. It is applied with varying contributions ( the more the closer you are to the affected areas), there are various triggers one being building an extension over 100 square metres.
To make these planning obligations work, officers within the Council have to do various things to facilitate this, for example:
> prior to the grant of planning permission negotiations are made between the planning officers and the developers to ensure the best outcomes are formulated,
> various Council departments etc are consulted and asked for their requirements and suggested contributions to be made from the developer or applicant.
> drafting of the legal documents by the Council’s solicitors to make the obligations binding.
However once this has been agreed and planning permission issued there still needs to be monitoring of the requirements of the obligations. Monitoring officers within the council ensure that triggers for ‘works’ or payments set out in the obligations are met, works are satisfactorily carried out, and funds are distributed, spent and properly accounted for. This subsequent work has to be accounted for with a cost attributed to it.
Whereas the planning officer’s costs are covered to a certain extent by the planning application fee, and the solicitors fees are directly charged to the developers at the time of drafting of the obligations, – the on going monitoring is not currently covered. Wiltshire Council does not apply a uniform county-wide charge for the monitoring officers time. This is now going to change from 1 May 2013 and be a chargeable item. All applicant/developers entering into planning obligations will be required to make an additional payment towards the monitoring costs.
The council has determined that this ‘charge’ will be 6% of the value of the obligation where the value exceeds £1,000 (subject to a maximum charge of £50,000). The charge will apply to each clause within the obligation. – That’s a fair bit of extra dosh for the poor applicant or developer to find. Typically if the obligation is £30,000 for housing/open space that’s a further £1,800 to monitor what appears straight forward processing. On a check this ‘monitoring fee’ seems vary across the country from less than £300 per obligation to excesses of 10% of the value. I just hope we can negotiate the obligations better than in the past applying a more pragmatic approach to expected funding amounts in obligations compared with the overall build out costs. Viability analysis will be important to keep down excesses in contributions expected. Maybe with the forthcoming Community Infrastructure Levy things may change for the better, however as I understand it for the moment Section 106 obligations for Affordable Housing will stay.
Regarding the monitoring charges now introduced, the Council claims the charge is a reasonable requirement to ensure infrastructure made necessary by development is properly provided and accounted for. The charge has been calculated to meet the cost of providing the service only. It will contribute towards the continued delivery of high quality developments with all necessary infrastructure in place in the interests of Wiltshire’s communities.
The new charges will replace charges already in place for South Wiltshire. Any obligation where negotiations have commenced prior to 1 May 2013 will not be subject to the new approach provided the legal document is completed and/or sealed prior to 1 August 2013.
Should negotiations on these particular obligations continue after this date then clauses relating to the new monitoring fee will be added at this time.
How things have changed over the years since I started in Planning and Building Control, when Planning or Building Regulation approvals were free and Section 106 agreements were for relatively minor things such as approving planning permission for a house in the countryside for an agricultural worker only to prevent sporadic building in open countryside.