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Planning Obligations

Volume 481: debated on Tuesday 21 October 2008

To ask the Secretary of State for Communities and Local Government whether monies collected under section 106 agreements can be used to pay for infrastructure projects other than those specified in the original agreement. (227345)

The Secretary of State's policy on planning obligations is set out in Government Circular 05/05, which is available in the Library of the House. The Secretary of State's policy says that planning obligations (also known as section 106 agreements) can be attached to a planning permission to make acceptable development which would otherwise be unacceptable in planning terms. Such obligations can prescribe the nature of development, compensate for loss or damage created by a development, or mitigate a development's impact. Planning obligations must be directly relevant to the proposed development. However, the impacts of a proposed development may extend beyond the immediate development site and therefore, developer contributions can be used to mitigate these off-site.

Contributions may either be in kind or in the form of a financial contribution. Policies on types of payment, including pooling and maintenance payments, should be set out in local development frameworks. There should be a clear audit trail between the contribution made and the infrastructure provided. The use of developer contributions under section 106 agreements should reflect the purpose for which they were collected and be directly relevant to the proposed development. Therefore, monies collected under section 106 agreements should not be used to pay for infrastructure which was not intended by the original agreement. Planning obligations should never be used purely as a means of securing for the local community a share in the profits of development. The policy indicates that in the event that contributions are made towards specific infrastructure provision but the infrastructure is not provided within an agreed timeframe, arrangements should be made for contributions to be returned to developers. Local planning authorities must take the Secretary of State's policy into account and have reasons for departing from it.