Planning obligations frequently asked questions (Section 106)

Your questions about planning obligations answered.

How are section 106 agreements created?

The nature of planning obligations and the legislative requirements which govern their use means that each obligation needs to be considered individually having regard to the site specific circumstances of a development proposal. Notwithstanding this, it is possible to identify common issues that are likely to arise from the majority of development schemes, and for which planning obligations may be required to mitigate impacts. The planning obligations supplementary planning document identifies six types of planning obligation:

1. Open space
2. Education
3. Public Realm
4. Transport
5. Affordable housing
6. Other site specific obligations

Who decides a section 106 agreement?

It is the Planning and Transportation Regulatory Panel which approves the ‘heads of terms'. These are the key principles of the section 106 agreement attached to the granting of planning permission.

Will all developments have to pay section 106 contributions?

Section 106 agreements are linked to the granting of planning permission. However, if a development does not go ahead there will be no mitigation required and no section 106 contributions will be payable. If a development was to provide services or facilities within the development site then section 106 contributions may be reduced or not required at all.

When are section 106 monies paid?

Section 106 monies are usually paid in instalments at key stages during the construction and/or occupation of a development, these are known as 'trigger points'. For example, a typical approach to phasing of payments for a development of houses might be:

• 25% of the total upon completion of the first dwelling
• A further 50% upon completion of 50% of the dwellings and
• The balance upon completion of 75% of the dwellings

An alternative approach is typically required for apartment schemes, as all of the dwellings may be completed at the same time. For apartment schemes it will often be more appropriate to link the phasing of payments to construction stages and first occupation. As developers usually have three years to commence a development once planning permission is granted, it can therefore take a number of years before section 106 contributions are received by the council from the time permission was originally granted.

Are there any restrictions on how section 106 can be spent?

Each section 106 agreement is different and will include individual requirements as to how the contributions are spent. Section 106 agreements also include expiry dates which limit the amount of time available to spend them.

Section 106 contributions are required to be spent within the vicinity of, and must be directly related to the development in question. In addition, since April 2005 no more than five obligations may be pooled towards the provision of any single infrastructure project or type of infrastructure.

These limitations can often severely restrict the nature and location of a scheme funded by Section 106 contributions.

Why are section 106 contributions sometimes spent away from the development?

Section 106 contributions must deliver a scheme that is related to the development that paid those monies, but the impact of any development can affect the wider community. This means that section 106 contributions can be used to deliver improvements to facilities that are located some distance away from the development, such as a local town centre or major road corridors.

How are section 106 contributions spent in Salford?

The city council has to identify at the point of determining a planning application the specific infrastructure project which the contribution will be directed towards, for example, 'towards the improvement of Ordsall Park'

A list of eligible infrastructure projects has been prepared relating to the provision and improvement of open space, public realm, and transport across each of the city's eight neighbourhood areas. The projects reflect the city's corporate priorities as derived from the City Plan and other approved strategies. Where applicable Section 106 contributions are direct towards projects within the eligible infrastructure which support the city's corporate priorities. Education contributions are directed towards projects that will increase capacity at primary schools within the vicinity of new development.

Why are section 106 contributions spent in this way?

As a section 106 agreement is a legally binding document, the council must ensure that any monies received are spent in line with the details of the agreement. Key council documents/strategies and frameworks enable the council to identify areas where there is a need for improvements to local amenities.

For details of local planning policies see our local planning policies page.

How to obtain a copy of a Section 106 agreement

Section 106 agreements are held with the documents associated with the planning application. You can view these online.