Planning Obligations - A Guide to Section 106 and Developer Contributions 2014 (SPD2)

Ended on the 15 December 2014

2. Southend Borough Council’s Approach to Planning Obligations

How Planning Obligations will be applied Across Southend

2.1 To some extent CIL replaces planning obligations. From April 2015, or once a CIL charging schedule is adopted, whichever is sooner, it will not be possible for a local authority to enter into s.106 planning obligations that pool together developer contributions from more than five schemes for any particular infrastructure item. However, site specific impact mitigation may still be necessary in order for a development to be granted planning permission, and this will continue to be secured through Section 106 agreements, Section 278 agreements or planning conditions (in addition to CIL payments). Further guidance on how CIL relates to other developer contributions can be found in the National Planning Practice Guidance (NPPG).

2.2. To ensure that local authorities do not charge twice through seeking contributions through S106, S278 and CIL, CIL Regulation 123 states that a planning obligation cannot be entered into where it would fund or provide relevant infrastructure listed on the Council’s website that may be funded through CIL. The potential infrastructure projects that CIL will contribute funding to are set out in the Council’s ‘Regulation 123 Infrastructure List’, and planning obligations will not be sought for any item of infrastructure included in this list. The Council will normally require a planning obligation where it is felt that a proposed development of whatever nature or scale, will in itself give rise to unacceptable pressure on public infrastructure or where the development is of such a nature or scale that it is considered that it should contribute to the supply of affordable housing in the Borough. The Council may also seek an obligation in pursuit of adopted policy, such as the provision of public art on large sites in the Southend Central Area, which seeks to provide for quality natural and built environments and sustainable communities. The precise scale and scope of a planning obligation will be determined, by negotiation, in relation to the specific circumstances of the development, including viability. In all instances, planning obligations will only be sought where they satisfy the tests set out in The Community Infrastructure Levy Regulations 2010 (as amended) i.e. necessary to make the development acceptable in planning terms; directly related to the development; and fairly and reasonably related in scale and kind to the development.

2.3 Southend Borough Council has decided on an approach that identifies the impacts of the development and sets these against its priorities for planning obligations, based on its knowledge of the locality and community. Whilst the Council does not seek to apply a blanket approach, it is necessary to have a consistent and transparent approach so that applicants can be aware early on in the development process what the Council's expectations might be.

2.4 Commercial developments bring employment and economic benefit but there is a need to integrate such developments into the local community and environment, hence planning obligations may be sought to achieve this. Both employees and other users require effective transport provision and a safe and functional environment. This may be achieved by improvements to the highway (including cycle paths and public footpaths) and the wider public realm. The increased workforce may also place increased demands on services such as libraries, health centres, leisure and recreational facilities.

2.5 Similarly, entertainment uses such as bars, restaurants, nightclubs and cinemas attract tourists, shoppers and after work patronage which needs to be balanced with Southend’s residential communities. Many of these activities also operate late into the evening and so issues of safety, provision of transport, night time noise, litter and street fouling arise. These activities need to be managed in order to maintain the local character that people find attractive as well as protecting the amenity of residents and other business users.

2.6 In respect of new housing, such developments bring new residents who will use existing facilities and create a demand for additional ones, hence planning obligations may be sought to address this. Education and training, health facilities, arts and culture, open space and leisure demands will arise. Therefore, community facilities are also likely to be required in support of residential schemes where there is a demonstrable need for this supporting infrastructure.

2.7 For residential schemes of 10 or more residential units or 0.3 hectares as set out in Core Strategy the Council seeks the on-site provision of 20-30% affordable housing, depending on the scale of the development, in accordance with Policy CP8 ‘Dwelling Provision’. For sites providing less than 10 dwellings (or below 0.3 ha) or larger sites where, exceptionally, the Borough Council is satisfied that on-site provision is not practical, the Council will negotiate with developers to obtain a financial contribution to fund off-site provision. The Council will ensure that any such sums are used to help address any shortfall in affordable housing. Preferred arrangements for financial contributions will be set out in a subsequent Development Plan Document.

2.8 Planning obligation requirements may be applied more flexibly to applications for community, voluntary sector or education facilities. For example, such a development may be fulfilling Southend Borough Council’s key policy priorities for a location such as provision of a local health care facility, an educational, leisure or cultural facility (e.g. pocket park, community theatre or arts centre). Planning obligations will also not normally apply to householder applications or small-scale commercial development (under the 1000m² threshold), which should have limited impact or be sustainable in their own right.

2.9 The Council acknowledges that in certain circumstances the costs associated with a development may be such that all the issues which ideally should be included within a planning obligation cannot be addressed without the scheme becoming unviable.

2.10 If a developer considers that the Council is placing unreasonable obligations upon a development scheme, the Council will require a developer to adopt an ‘open book’ approach, whereby relevant development finances are shared with Council officers and/or an appropriate assessor carrying out an independent financial appraisal, in order to provide appropriate and necessary information to support such a claim. For a full independent appraisal of the scheme’s viability to be carried out, using a residual land valuation methodology, the following information must be provided:

  1. Supporting reports for site abnormals etc.
  2. QS cost assessment – the evidence should include a current day full build cost estimate, not summary, showing how the costs have been estimated (and include a full breakdown of both gross and net internal areas).
  3. Market evidence – this needs to comprise:
    1. Estimate of sales/rental values
    2. Market evidence in support of the sales/rental values
    3. Values assessed for affordable housing.
  4. Detailed valuation reports (include tenures, easements, description etc.). This needs to include a valuation of the site in its existing or potential or alternative use with an explanation showing how these values have been assessed and supporting evidence as appropriate.
  5. Viability appraisal including cash flow. This needs to be an electronic viability appraisal model, and should be provided as an Excel document to see how the calculations have been done.
  6. Development programme – this would show the anticipated period involved in development, including pre-build, build period and marketing period.

If issues of viability arise and there is a need for the Council to obtain independent valuation and financial advice, it will be expected that the costs from this would be met by the developer.

2.11 If the Council agrees that a development cannot reasonably afford to meet all of the Council’s specified requirements, these requirements will then be prioritised by the Council in negotiation with the developer, subject to the proposal being acceptable in all other respects. While commercially sensitive information and detailed figures will be treated in confidence, it may be necessary to report the key issues and broad conclusions in reports to elected members at the time of their consideration of a planning application.

2.12 In assessing the precise nature of on-site and off-site planning obligations to be required on individual sites, the Council will take into account viability considerations. Proposals may be considered unviable owing to unforeseen and abnormal costs associated with the development. The Council does however expect that abnormal costs will have been reflected in any residual land valuation, which should inform the land purchase price, and should not therefore affect a developer’s ability to meet planning obligations. However, consistent with the advice relating to pre-application discussions, the Council will be seeking to agree draft heads of terms prior to submission of an application and any likely difficulties should be brought to the attention of the Council at this pre-application stage. This will avoid delays to the planning application process and will also avoid planning applications being refused on the basis of non-compliance with planning obligation requirements.

2.13 To inform the CIL Charging Schedule, issues in relation to viability have been considered upfront in a comprehensive Viability Study. The study included appraisals for a variety of uses and scale of development representing typical development in the Borough. And, based on an analysis of Section 106 records for the last 5 years (April 2008-December 2013 inclusive), the appraisals supporting Southend’s CIL have factored in an allowance to address any S106/S278/planning condition costs of site specific mitigation. Any S106 contributions that are currently pooled were excluded from the analysis to accurately reflect the residual S106 payment that may be due in addition to CIL. As affordable housing (required by Core Strategy policy CP8) will continue to be secured by planning obligations, this requirement was also been factored into the appraisals. Therefore, in most instances, viability should not be a matter requiring further discussion at planning application stage.

2.14 In accordance with Regulations 73, 73A, 73B and 74 and the Council’s Payment in Kind & Infrastructure Payments Policy, the Council may at its discretion accept a proportion of a CIL liability in the form of a transfer of land or infrastructure provision to the Council as payment. This would be secured by a legal agreement although will be considered separately from any Section 106 planning obligation requirements.

Planning Obligation Types

2.15 Southend Borough Council recognises the need to achieve positive planning for sustainable communities within the Borough. This includes using developer contributions (including planning obligations and CIL) to provide infrastructure to support new development. The obligation types that may be required as part of any Section 106 Agreement and what will be covered by the Southend Borough Council CIL are set out in the following sections:

  • Transport, Highways and Accessibility
  • Education, Training and Skills
  • Community Facilities,
  • Public Art and the Public Realm (including the Historic Environment)
  • Natural Environment and Conservation
  • Affordable Housing
  • Flood Risk, Waste and Resources
  • Administration and Monitoring of Planning Obligations

2.16 The above categories are broadly consistent with the categories of infrastructure set out in the Council's Infrastructure Delivery Plan, which outlines what infrastructure is required to support the growth as outlined in the Core Strategy. The details in relation to each of the infrastructure types also reflect the objectives, needs and requirements of all Council strategies, and the policies and aims contained in national and local planning policy.

2.17 The infrastructure types are not set out in priority order and details of the planning obligations likely to be sought are not exhaustive. Other obligations not mentioned below may be sought to ensure the delivery of key policy and sustainable regeneration objectives depending upon the individual characteristics of a development proposal, as well as other requirements which may arise from specific circumstances. Similarly any thresholds and calculations, which may be applied once adopted, are not rigid and may be updated as and when it is deemed necessary. The Council's CIL Regulation 123 Infrastructure List, which is reflected below, may also be subject to change and this SPD will be amended accordingly if and when this occurs.

Transport, Highways and Accessibility

2.18 Following the introduction of CIL, the intention is that the needs arising from new development in respect of this infrastructure type will be delivered using the following combination of CIL and S106/S278 agreements:

CIL S106/S278
A127 east-west strategic transport and freight corridor improvements (including Kent Elms, The Bell, Progress Road, Sutton Road, East/West Street, JAAP, etc.)
Local public transport measures
Local walking and cycling measures to upgrade network
Site specific traffic management measures

2.19 Some development schemes will require specific works and improvements to mitigate direct impacts in terms of transport, the highway network or access. Site specific mitigation measures that will be secured through S106/S278 may include:

  • On-site works to footways/cycleways/bridleways
  • Raised kerbs
  • New/improved junctions
  • Access roads within the site
  • Link/slip roads
  • Traffic Regulation Orders e.g. to impose waiting restrictions
  • Traffic lights
  • Pedestrian/toucan crossings
  • Signage
  • Where a new lay-by is required as a direct consequence of a development within the vicinity
  • Local traffic calming measures
  • Parking management schemes if required as a direct consequence of a development within the vicinity

Education, Training and Skills

2.20 Most new development will lead to an increase in demand for school places or will place pressure on these services leading to a need for either new accommodation or refurbishment and improvement of existing educational facilities. The Council has a duty to ensure that there are sufficient school places in the local authority area to meet present and future demand for places. The Council are mindful of the impact new development may have on the level of education provision in the area and the cumulative effect on the Borough.

2.21 The Council is committed to achieving the economic, social and environmental well being of all residents so as to ensure that a better quality of life and prosperity is shared by all. To achieve this, the Council proposes that in appropriate circumstances contributions should be made by developers towards the training and skills base needed to achieve the jobs led growth and regeneration.

2.22 Following the introduction of CIL, the intention is that the needs arising from new development in respect of this infrastructure type will be delivered using the following combination of CIL and S106 agreements:

CIL S.106
Provision, improvement, replacement, operation or maintenance of Primary and Pre-School education facilities
Site specific contributions to local skills and training provision, including improved recruitment and access to jobs locally

Community Facilities including ‘Open space, sport and recreation’ and ‘Health, social care and physical community needs’

2.23 A key priority for the Thames Gateway is to create places where people want to live and work, as well as delivering sustainable communities. Southend is a compact densely developed urban area, which presently has heavy demands placed upon its infrastructure. Community and cultural facilities, therefore, have an essential role to play in ensuring that a balanced and quality environment is created. The quality and quantity of fundamental services need to be maintained and improved, while simultaneously achieving the regeneration objectives for the town, to ensure that the quality of life of individuals is maintained and improved.

2.24 The town’s existing facilities will need protecting and enhancing according to the level of additional housing and commercial development and the pressures that these place on them. Any further growth within the Borough must not only safeguard the existing community infrastructure but seek to enhance the infrastructure balance. Improvements to and/or re-provision of community infrastructure, delivered through planning obligations, must therefore accompany development or act as a pre condition to it.

2.25 Following the introduction of CIL, the intention is that the needs arising from new development in respect of this infrastructure type will be delivered using the following combination of CIL and S106 agreements:

Open Space CIL S.106
Provision and management of on or off-site open space if required to offset a loss that would otherwise result from the development
Sport and Recreation
Children’s Play Areas (Sidmouth Avenue Play Area, Priory Park, Warrior Square Gardens)
New play or sports facilities required on or close to a development site as a result of the need generated directly and solely by that development
Youth facilities including Multi-Use Games Areas, parkour and wheeled sports (Priory Park, Southchurch area including Southchurch Park or Southchurch Park East)
Social and Community
Provision, improvement, replacement, operation or maintenance of libraries
Southend New Museum (Western Esplanade)
New allotment space
New community centres
Replacement community facilities such as allotments or community centres required as a result of new development (i.e. to offset a loss that would otherwise result from the development)
Health and Social Wellbeing
Provision, improvement, replacement, operation or maintenance of Primary Healthcare facilities
Infrastructure to enable people to remain living independently
Refurbishment or redevelopment of Delaware and Priory House
Health, social wellbeing and emergency services where provision is required to meet a need generated directly and solely by a development

Public Art and the Public Realm (including the Historic Environment)

2.26 The quality of the built environment affects the way in which people perceive and enjoy places and spaces. Well designed, accessible and legible urban places and spaces will help promote and support greatly the creation of cohesive, pleasant and sustainable local communities. An environment and its surroundings, whether natural or built, will play a significant role in shaping the quality of life experienced by a population. Interesting and innovative buildings, quality streets, good relationships between new and existing development, the use of public art and soft and hard landscaping can all help to develop local identity, create places which people are proud of, and thereby, improve their quality of life and a sense of belonging. Accordingly, there is a need for greater emphasis on the use of buildings, streets, open spaces and landscaping – the public realm – and an understanding of how these elements relate to each other to create a unique ‘sense of place’ and identity. Indeed the public realm, comprising both ‘physical’ and ‘social’ elements, has a significant role to play in creating a quality environment, as it encapsulates the spaces and settings which facilitate and support social interaction and public life.

2.27 Following the introduction of CIL, the intention is that the needs arising from new development in respect of this infrastructure type will be delivered using the following combination of CIL and S106 agreements:

CIL S.106
Provision of or contribution towards public art for all major developments
Three Rivers Trail
City beach Phase Two (Eastern Esplanade)
Victoria Gateway Phase Two (London Road)
Provision of Information Communication Technology (ICT), CCTV and street lighting on development sites and within the vicinity if required to mitigate the impact of a development
Community facilities that contribute to the quality of the public realm that are required as a direct consequence of the development (e.g. public toilets)
Contributions towards the conservation, restoration and enhancement of the historic environment and archaeological sites and monuments (including provision for public access and interpretation, and future management of historic assets where appropriate) where an impact is directly linked to a development site and requires mitigation

2.28 In addition, all development will be expected to be designed to comply with Core Strategy policy CP4 and be consistent with the objectives set out in the Design and Townscape Guide SPD including policy and guidance relating to landscaping, the public realm and public art.

2.29 The commissioning of public art work should involve professional art organisations and including stakeholder and community engagement. A written public art statement, with the commissioning process, artist briefs and budget is usually expected to be in place prior to the commencement of development; and if provided with the planning application the art work can be secured by planning condition. The completion date for public art will vary dependent on the nature of the development and the location of the art work, but will usually be expected to be completed prior to first occupation of a development.

Natural Environment and Conservation

2.30 The cumulative effect of new development has and will impact greatly upon the physical and natural environment. Even though many developments are relatively small scale, their accumulation results in major effects on the overall natural systems of neighbourhoods, towns, cities, regions and, eventually, on the earth’s biosphere. Given serious concerns in relation to global climate change, pollution of the natural environment, and the depletion of fossil fuel sources, the need for environmental responsibility is an important consideration for those involved and associated with development. Development will need to have regard to environmental impacts as well as social impacts and long term economic viability to contribute towards the creation of truly sustainable communities and lasting environments.

2.31 In view of future development demands and pressures within the Borough, the Council will ensure that development contributes towards the provision of additional public open spaces, biodiversity and nature conservation areas, especially in circumstances where existing amenities would be impacted upon by development. It will also be necessary for developments to contribute towards enhancement, retention and management of these areas, in order to meet national, regional and local objectives and to offset any additional pressures and demands.

2.32 Following the introduction of CIL, the intention is that the needs arising from new development in respect of this infrastructure type will be delivered using the following combination of CIL and S106 agreements:

CIL S.106
Any measures to offset/compensate/mitigate for the loss of/impact on any natural or environmental resource, which is a direct consequence of a development. For example, woodland, grassland, open water, foreshore, hedgerows, allotments, public open space, species or habitat etc. This includes any impact on designated Special Protection Areas (SPA), Special Areas of Conservation (SAC), Sites of Special Scientific Interest (SSSI) and RAMSAR sites and Local Nature Reserves (LNR’s), including Southend-on-Sea foreshore
Any measures to mitigate/compensate against loss of or damage to species or habitats that contribute to biodiversity, where the loss/damage is a direct consequence of a development
Replenishment/replacement trees, vegetation or areas lost to/affected by development, through re-planting of suitable/appropriate species and by landscaping new and additional areas

In addition, all development will be expected to be designed to comply with Core Strategy policy KP2 in relation to the natural environment and conservation.

Affordable Housing

2.33 A key objective of the Government and the Council is to ensure that everyone has the opportunity to a ‘decent home’. To help meet this objective, the planning system is expected to provide housing that is genuinely affordable to a wide range of people. A ‘step-change’ in housing supply will be needed to tackle serious shortages that exist, particularly in London and the South East. Too many people do not have access to decent, affordable housing many are living in housing of poor quality. It considers that more affordable housing should be delivered, especially for key workers, young families and those in priority need; and new sustainable communities needs to be created in regions of high demand like the Thames Gateway.

2.34 In order to achieve this aim, and to ensure that affordable housing is provided in accordance with Southend Borough Council’s Core Strategy, the Council proposes that following the introduction of CIL, affordable housing will be delivered through S106 agreements:

CIL S.106
Provision of affordable housing in accordance with Core Strategy policy

Core Strategy Policy CP8 ‘Dwelling Provision’ states that the Borough Council will:

....enter into negotiations with developers to ensure that:

a. all residential proposals of 10-49* dwellings or 0.3 hectares up to 1.99 hectares make an affordable housing or key worker provision of not less than 20% of the total number of units on site; and

b. all residential proposals of 50* dwellings or 2 hectares or more make an affordable housing or key worker provision of not less than 30% of the total number of units on the site.

*The rational which will be used by the Council to determine whether more than the specified floor target for affordable housing will be sought will be set out and justified in ‘Part 6 Affordable Housing’ of the ‘Planning Obligations and Vehicle Parking Standards DPD’.

For sites providing less than 10 dwellings (or below 0.3 ha) or larger sites where, exceptionally, the Borough Council is satisfied that on-site provision is not practical, they will negotiate with developers to obtain a financial contribution to fund off-site provision. The Council will ensure that any such sums are used to help address any shortfall in affordable housing. Preferred arrangements for this will also be set out in the above DPD.

Flood Risk, Waste and Resources

2.35 The Council acknowledges and supports the Government’s aims and objectives for flood and coastal defence. A key policy aim is to reduce the risk to people and the developed and natural environment from flooding and coastal erosion by encouraging the provision of technically, environmentally and economically sound and sustainable defence measures. Where existing water supply and sewerage infrastructure is inadequate for the demands placed on it by development, developers should also contribute to any necessary off-site improvements (including sea defences).

2.36 Core Strategy Policy CP4 ‘The Environment and Urban Renaissance’ states that development proposals will be ‘expected to contribute to the creation of a high quality, sustainable urban environment which enhances and complements the natural and built assets of Southend’. It aims to achieve this by promoting sustainable development and encouraging innovation and excellence in design, including design solutions that maximise the use of renewable resources and resource conservation. Therefore, a developer should ensure that any new development is environmentally sustainable in terms of energy, waste, build type and quality. It should also increase the use of sustainable build types and materials, and ensure that there are adequate facilities for recycling in order to meet local policy objectives and demands.

2.37 Following the introduction of CIL, the intention is that the needs arising from new development in respect of this infrastructure type will be delivered using the following combination of CIL and S106 agreements:

Flooding and Unstable Land CIL S.106
Chalkwell Sea Wall flood defence works (Chalkwell & Eastern Esplanades)
Coast protection works (East Beach Shoeburyness)
Flood Defence Works (Old Leigh)
Lynton Road to Thorpe Bay YC Flood Defence Improvements (Eastern & Thorpe Esplanades)
Any measures required to ensure a development creates no increase in flood risk within the Borough by provision of suitable flood protection measures and their future maintenance
Site specific mitigation measures required to manage unstable land
Litter Bins (as outlined in the Southend-on-Sea Litter Bin Strategy, July 2011)
Site specific mitigation measures required relating to waste (including litter bin and recycling provision on a site)
Waste Transfer Station (WTS) – ‘Waste Solution’
Any measures required to provide for additional local water supplies and sewerage capacity, or provision/upgrading of utilities matching any additional demands generated by a development

2.38 In addition, all development will be expected to be designed to comply with Core Strategy policy KP2 in relation to flood risk, waste and resources (including avoidance of flood risk, sustainable use of resources, sustainable waste management and incorporation of sustainable urban drainage systems and renewable energy measures). Where possible, such measures will be secured by planning condition.

Administration and Monitoring of Planning Obligations

2.39 In line with Government timescales the Council expects planning applications to be determined within statutory 8/13/16 week targets. The delivery of obligations within these timescales may take a considerable amount of time and resources and often requires public consultation, committee resolutions or involvement and support of third parties. Therefore, proposed development will be required to contribute towards the costs incurred during this stage of the process.

2.40 Once a planning obligation has been signed, administrative costs are incurred on tasks such as ensuring on-site measures are provided, financial contributions are received and contributions are spent in accordance with the terms of the obligation. This requires compliance checks, monitoring, project management and implementation by the Council.

2.41 The Council considers that a contribution towards the Council’s costs of administering and monitoring planning obligations essential to achieving these aims and objectives.

2.42 The administrative and staff costs of monitoring planning obligations will be recouped through a standard payment, which will be used to fund:

  • Database development – initial cost £1000, support cost £3,300 per annum
  • S106 Monitoring – delivering planning obligations, enforcement of obligations, site inspections to assess status of schemes, data entry, monitoring of expenditure, report function
  • Legal advice – non payment procedures, legal action etc
  • Finance liaison and tracking of financial contributions
  • Building Cost Information Service (BCIS) subscription for indexation to ensure that contributions reflect current costs within the building industry

2.43 The estimated total annual cost for the administration and monitoring of obligations is approximately £44,000 per annum (as increased by inflation) and taking this into consideration the administration and monitoring payment will be required in accordance with the following criteria, which reflect the complexity of an agreement and the subsequent monitoring:

  • For agreements with one obligation or a contribution of less than £5000 a fee of £250 is charged
  • For agreements with one non-monetary obligation or one obligation with a contribution of more than £5000 a fee of £500 is charged
  • For agreements with multiple Heads of Terms, 5% of the monetary contribution plus/or £750 per non-monetary Head of Term is charged
  • The administration and monitoring fee shall be capped at a maximum of £10,000

2.44 Since adoption of SPD2 in November 2010 significantly less than the estimated costs of the administration and monitoring of planning obligations has been received. In FY 2010/11 £10,000 was received, FY 2011/12 £500, FY 2012/13 £12,106 and in FY 2013/14 £8,488. It is considered reasonable that the monitoring fee continue to be payable in accordance with the charges set out above. The charge will continue to be periodically reviewed to ensure it remains reasonable in the context of actual costs of administration and monitoring of planning obligations.

2.45 See the Council’s CIL Charging Schedule for further details relating to the reporting and monitoring arrangements for CIL.


2.46 It will be necessary to review this SPD as a whole as further guidance is evolved by the Council and in light of Government policy and advice. In particular, if the Council’s CIL Regulation 123 Infrastructure List is amended then this SPD will be amended as necessary.

2.47 Details on planning obligations secured, and the status and use of financial contributions will be reported annually.

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