Section 106 agreements

When developers build new houses, the development may have an impact on the local community. For example, the growth in the local population might lead to greater pressure on local schools. We can use section 106 agreements to require developers to pay for infrastructure to help reduce the impact of developments. In addition, we can use section 106 agreements to secure the delivery of affordable housing.

Section 106 agreements are legal agreements negotiated between the council and the developer. You will find a copy of each legal agreement with the relevant planning application in our planning application search.

Under the government's National Policy Planning Framework (NPPF), which sets out the government's planning policies and how they should be delivered, we can only ask for funds for infrastructure which meet the following three statutory tests:

  • The project is necessary to make the development acceptable in planning terms
  • It is directly related to the development and
  • It is fairly and reasonably related in scale and kind to the development

This table shows how this might work in practice.

Test (as set out in the NPPF) We can ask for funding if We can't ask for funding if
Necessary to make the development acceptable in planning terms The catchment primary school is already operating at full capacity and the development will increase the demand further. There is spare capacity at the catchment primary school even allowing for the increased demand due to the development.
Directly related to the development There is a play area next to the development which needs new equipment and which residents of the development will use. There is a play area some distance away from the development which needs new equipment but which the new residents are unlikely to use.
Fairly and reasonably related in scale and kind to the development There is already traffic congestion and the new development will increase the problem. We could request a contribution to make improvements to the highway network of the total cost of fixing the problem. There is already a traffic problem but the new development won't make it significantly worse - section 106 funding can't be used to tackle existing problems not linked to the development.

When is the money paid?

The money is paid when the development reaches a certain stage, which might be when building starts, when the first house is sold and occupied, when the 100th house is occupied, and so on. These stages are called trigger points.

As it may be some time before these trigger points are reached, there may be a long delay - possibly several years if it is a large development - before payments are made.

How long do we have to spend the money?

There is usually a time limit on spending the money, which can range from 5 to 10 years.

What section 106 monies does the council hold and what is it to be spent on?

We hold information on section 106 monies on a ward and parish level.

Search for section 106 monies available in your area