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Costs and s.106 obligations

Money iStock 000008683901XSmall 146x219Can authorities claim admininstration and monitoring fees as part of planning obligations? Alex Round reports on a recent High Court ruling.

In Oxfordshire CC v Secretary of State for Communities and Local Government [2015] EWHC 186 (Admin) the High Court held that a Planning Inspector had not misinterpreted Reg 122 of the CIL Regulations 2010 nor had he acted irrationally in determining that a local planning authority was not entitled to fees for administering/monitoring planning obligations in a s. 106 agreement.

The section 106 agreement entered into by the parties included various infrastructure and a contribution towards administration/monitoring (£3,750). The application was said to be a routine one, with obligations based on a standardised table and the admin/monitoring cost calculated as a percentage of the other contributions rather than reflecting an assessment of the work actually required to administer or monitor the obligations.

The agreement included a ‘blue pencil clause’ allowing the Inspector to strike out contributions that did not meet the Reg 122 tests. The Inspector duly took his ‘blue pencil’ to various contributions in the s.106 including the administration/monitoring fees.

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The claimant local authority applied to overturn the Planning Inspector’s decision on the grounds that the inspector had misinterpreted the ‘necessity’ test in Reg 122 and had made an irrational decision in finding that although (some) planning obligations were necessary (to make the development acceptable in planning terms), monitoring of the obligations was not.

The application was refused by the High Court on the grounds that there was nothing in the wording of the TCPA 1990, the Planning Act 2008, the CIL Regs, the NPPF or the NPPG which suggested that authorities should or even could claim admin/monitoring fees as part of planning obligations.

The Court noted that legislation made provision for payment of fees for planning applications, discharges of condition etc, but not for the administration or monitoring of s. 106 obligations. It was held to be part of the local authority’s functions as a local planning authority to administer, monitor and enforce such obligations and that the cost of doing so should be met by their budget.

The relevant allowable contributions, (education and library services – as determined by the Inspector) did not even require ongoing management or maintenance in any event as they were single payments payable in advance of the commencement of development. The door may still be open for an argument in exceptional cases, but it is clear that routine requests for standardised administration and monitoring fees may fall foul of the statutory tests.

Alex Round is a trainee solicitor at Mills & Reeve. This article first appeared on the firm’s Plan-it Law blog.



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