This page provides standard answers to frequently asked questions relating to Section 106 agreements and the Community Infrastructure Levy (for those Local Authorities where a Community Infrastructure Levy policy is in place). Question 4 below also includes a link to a set of standard definitions as a guide to the development of Section 106 agreements. For more information and detail on specific applications, please contact your local planning authority's planning department.

Section 106 (s106) Agreements And Community Infrastructure Levy (CIL) Frequently Asked Questions April 2017

Section 106 Agreements

1. What is a section 106 (s106) agreement?

A s106 agreement is a legal agreement negotiated between a developer and the council (and potentially other parties), under section 106 of the Town and Country Planning Act 1990. It contains planning obligations that cannot dealt with by planning conditions. A s106 agreement is registered as a legal charge on the land, which means that the obligations will automatically pass to any new landowner.

2. What are s106 agreements used for?

They can be used to secure infrastructure to meet the needs of residents in new developments and (where this has not been identified in a Community Infrastructure Levey Regulation 123 list) mitigate against the impact of new developments on existing facilities or infrastructure (subject to pooling restrictions). They can also be used to restrict the development or use of the land in a specified way or require specific operations or activities to be carried out on the land. Where a s106 agreement is necessary, Planning permission will only be issued after the s106 agreement is signed. Obligations can include:

• Affordable Housing
• Primary and Secondary education provision
• Creation, maintenance and adoption of open space and recreation facilities
• Provision or adoption of new highways and public rights of way
• Community facilities
• Travel Plans

3. What are the costs of a s106 agreement?

S106 agreements need to be legally sound and the council will therefore charge a fee for the preparation, checking and production by our solicitors. The developer will be asked to contribute to these costs. Fees will be advised by your local planning authority.  A developer may submit a Unilateral Undertaking that they have prepared themselves. There will still be a fee for checking this document.

4. Can I see a standard s106 agreement?

S106 agreements are bespoke documents relevant to individual development proposals. However, the strategic housing partnership has developed a guide for standard definitions NYCYER Standard Definitions - Guide and is currently developing guidance on clauses. S106 agreements are public documents, your local planning authority can send you an example of one that has recently been agreed in their area.

5. Can planning permission be issued before the s106 agreement is signed?

For applications where it is necessary to secure development requirements that cannot be dealt with by planning conditions, a s106 agreement will need to be signed first. The planning obligation will make sure that matters needed to make the development acceptable (in accordance with planning policy/guidance) are in place, so that it can proceed. Otherwise the development would be refused.

6. Can I get advice on the required s106 contributions prior to submitting a planning application?

Yes, your local planning authority can provide informal advice and information before you submit your application and would encourage you to talk to us as early as possible during the application process. Formal Pre-application advice is also available.

7. What happens after Planning Committee resolves to determine an application?

Reports considered by Planning Committee which recommend granting permission will normally contain recommended Heads of Terms for a s106 agreement. This is then finalised by lawyers acting for the council and the developer. Upon completion of the s106 agreement, the planning permission is formally issued.

8. How is the s106 Agreement negotiated?

Negotiation is usually led by a Planning Officer in discussion with the developer and other colleagues both within and outside the council. Larger schemes may require a number of financial and non-financial contributions to mitigate the impact of the proposal upon the surrounding area. The Planning Officer will seek to agree the contribution, sums and the triggers for payment through discussion.

 9. What if the required s106 contributions make the proposed development financially unviable?

You will be advised during pre-application discussions of the council's s106 requirements. If you think the cost of these means that your development will not be financially viable, you will generally need to submit an independent financial appraisal, setting out all scheme costs and values for discussion and negotiations with the council. Further information on what would be required for this is available from your local planning authority.

10. When are s106 monies paid?

S106 monies are usually paid in installments at key stages during the construction, known as ‘Trigger Points’, these are usually agreed when drawing up the s106 agreement. For example 50% might be payable at start on site and the remaining 50% on completion, or the trigger points may be at the occupation of a certain number of dwellings. These triggers and the amounts payable would be agreed through discussion with your Planning Officer.

11. How do I make s106 payments to the council?

It is your responsibility to make payments when they are due. Payments can be by cheque made payable to the relevant local authority or sent to the relevant officer by BACS. Payments must specify the Planning Application reference number, site address and the obligation(s) to which the payment relates.

12. How are s106 monies allocated?

Until monies are actually received by the council they are not formally allocated to specific projects as the start on site can be up to 3 years following the grant of planning permission.  Monies must be spent in accordance with the specific s106 agreement which will identify, as tightly as possible, what the money secured is for and/or how it is to be prioritised when it is paid.

13. What is a Registered Provider (RP)?

Registered Providers are the bodies that own and manage Affordable Housing. They tend to be non-commercial organisations such as local authorities or housing associations. Housing associations are independent, not-for-profit organisations that can use any surplus they make to maintain existing homes and help finance new ones. Most affordable housing delivered through S106 is transferred to an RP at an indicative 'Transfer Price'. Your Planning Officer should be able to provide you with this data, to assist you in preparation of any viability assessment. It is expected that developers will have had discussions with Registered Providers prior to submitting a planning application. Our Housing Officers and Rural Housing Enablers can put you in touch with RPs that work in our area.

14. What is Affordable housing

Affordable Housing is defined in Annex 2 of the National Planning Policy Framework as:

Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision.

Social rented housing is owned by local authorities and private registered providers (as defined in section 80 of the Housing and Regeneration Act 2008), for which guideline target rents are determined through the national rent regime. It may also be owned by other persons and provided under equivalent rental arrangements to the above, as agreed with the local authority or with the Homes and Communities Agency.

Affordable rented housing is let by local authorities or private registered providers of social housing to households who are eligible for social rented housing. Affordable Rent is subject to rent controls that require a rent of no more than 80% of the local market rent (including service charges, where applicable).

Intermediate housing is homes for sale and rent provided at a cost above social rent, but below market levels subject to the criteria in the Affordable Housing definition above. These can include shared equity (shared ownership and equity loans), other low cost homes for sale and intermediate rent, but not affordable rented housing.

The mix of tenure, size and type of the affordable housing to be provided through the s106 agreement is defined in local policy and will be discussed as part of any negotiations around financial viability. The affordable housing units will need to be transferred to the RP at the Council’s agreed Transfer Prices which can be found here.

15. Can I deliver the required affordable housing without a Registered Provider?

It is possible for commercial organisations to build and manage affordable housing for intermediate tenures only although this is not yet common practice. The amount and type of intermediate products will be agreed as part of the planning application process. If you wish to discuss if this appropriate, please contact the your local planning authority.

16. What is a Commuted Sum?

It is generally assumed that affordable housing will be provided on site as part of the development. However, in some circumstances, off-site provision or a payment in lieu (of broadly equivalent value of providing Affordable Housing on site) may be accepted. The commuted sum is paid by a developer to the Council where the size or scale of development triggers a requirement for affordable housing, but it is not possible or appropriate to deliver this on site .The principles applied in the collection and use of commuted sums are similar to other planning obligations

Community Infrastructure Levy -Frequently Asked Questions

 1.  What is the Community Infrastructure Levy (CIL)?

CIL is a system introduced by Government allowing Councils to introduce a levy on specified development that is ring fenced to fund additional infrastructure such as roads and schools to support the development of the local area. Not all of the Local Authorities in York, North Yorkshire & East Riding have an adopted CIL policy - please check with your Local Authority to see if this applies.

2. How will CIL funds be spent?

The funding generated from CIL must be used to deliver infrastructure in the District that is needed to support the level of housing and employment growth proposed in the Development Plan (Local Plan). This could include funding new highway infrastructure, schools, open spaces, health and leisure facilities. This will usually be new infrastructure, or may involve the repair, expansion or enhancement of existing infrastructure. Under CIL Regulation 123, each Council has published the schemes and projects on which it may seek to spend CIL receipts (its ‘Regulation 123 List’). This can be viewed on the councils website and copies are available to view at council offices during normal opening hours.

3. Is CIL the same as s106 developer contributions?

No, CIL replaces tariff-style development contributions, and is collected under a different time frame. Like developer contributions CIL will be paid by developers and be ring-fenced to fund infrastructure. CIL offers greater transparency and certainty for developers, less need for legal agreements, and more flexibility for the Council in how it is used. In certain circumstances CIL and S106 may both be applicable however, they should not be used to pay for the same piece of infrastructure. This is to avoid developers being charged twice.

4. Will my development be liable for CIL?

New homes, retail warehouses and domestic extensions of over 100 sqm can be subject to CIL. Whether a development qualifies for CIL and how much depends on a range of factors. The Local Authority CIL Charging Schedule sets out which types of developments are liable. Applicants will be formally notified of the level of liability when planning permission is granted. If you need any advice on this please contact the planning officer dealing with your application. Some types of development are liable in principle, and may be subject to exemptions and relief.

5. Are charities and affordable housing developments eligible for relief?

Yes. The regulations provide 100% relief from CIL on those parts of a chargeable development which are intended to be used as Affordable Housing. A charity landowner will benefit from full relief from their portion of the liability where the chargeable development will be used wholly, or mainly, for charitable purposes. An organisation benefitting from relief must apply for the exemption to the Planning Authority

6. What if existing buildings are being demolished or converted?

The gross floor space of existing buildings on the site which are to be demolished or reused as part of the proposal may be deducted from the calculation of the CIL liability. However, deductions are only applied where those buildings have been in lawful and active use for a continuous period of at least six months out of the three years prior to planning permission being granted.

7. If I want to change an existing planning permission or conditions on a planning permission, will I have to pay CIL?

Yes. If full planning permission is granted before publication of a CIL Charging Schedule, but an approval of an application to vary or remove conditions is made after approval of the CIL Charging Schedule, the planning approval triggers a liability to pay CIL as it results in a new planning permission. However, where a S106 has been used on the original permission to seek a contribution, then the CIL Regulations provide for an exemption from CIL.

8. How much CIL will I pay?

The amount of CIL will be calculated according to Regulation 40 of the CIL Regulations 2010 (as amended). The amount paid is based on the formula set out below where the inflation measure used is the national ‘All-in Tender Price Index’ published by the Building Cost Information Service (BCIS) of the Royal Institution of Chartered Surveyors (RICS). Full details of the method are set out in the CIL Regulations 2010 (as amended).

CIL Rate x Net Additional (new build) Floorspace x Inflation Measure

Adopted Charging Schedule

9.  How are CIL Rates determined and are they fixed?

Each Council first identifies the total cost of infrastructure they wish to fund through the levy. Information on the infrastructure needs comes from the infrastructure assessment that was undertaken as part of preparing the Local Plan. Knowing the total infrastructure requirement and the overall scale of development expected over the Plan period, the Council is able to calculate appropriate rates to help delivery the required infrastructure, on the basis that there is a deficit. The assessment will also take into account the financial viability of development in order to ensure that it is able to afford the payment of a levy. The evidence base for a charging schedule, including rate setting, is examined in public prior to the adoption of the levy, to establish that the rate is set at a level which does not compromise the ability to deliver planned requirements. The rates are fixed, non negotiable and can only be changed through a full review of the charging schedule.

10.  My development doesn’t require planning consent as it is Permitted Development but is over 100sqm. Will I be liable to pay CIL?

If you intend to develop under general consent including Permitted Development you must submit a ‘Notice of Chargeable Development’ to the Council before development commences. NB - You do not need to submit such a notice if your development is less than 100 sqm of new floorspace and it does not comprise one or more new dwellings. If a development exceeds 100 sqm CIL will be charged on the entirety of the development.

11.  My development is liable, when will I have to pay CIL?

CIL is payable on commencement of development but the Council is able to introduce payments by installments for large developments. This would need to be agreed before any development commences and be in accordance with the council's published installment policy.

12.  How will planning applications and appeals that pre-date the introduction of the CIL Charging Schedule be dealt with?

The levy will be applied to all planning consents/appeals determined on or after the date of approval to use the Charging Schedule. The date at which the application was made is not relevant, neither is the date of the officer’s recommendation nor the date at which a planning application was considered by Planning Committee. The Council has no discretion in this matter, which is set by statute. The levy also applies to any permissions issued by a Planning Inspector as a result of a successful planning appeal (or appeal against enforcement notice).

13.  I have an existing outline planning permission, will I have to pay the CIL Levy when reserved matters are approved?

Not if your outline permission was granted prior to the introduction of CIL because the reserved matters do not constitute a new planning consent. You would only be liable for the levy if you receive permission on a new outline application or detailed full application. Your application may still be liable to make a contribution in accordance with an agreed s106 contribution.

14.  Why are some types of use zero rated in the Charging Schedule, i.e. the charging rate has been set at £0/sqm?

Council's set the CIL charging rate for certain types of development at £0 per sqm in order for them to remain financially viable.

15.  What about s106 Planning Obligations?

CIL and s106 agreements can cover different things. Affordable housing and certain other provisions currently lie outside the remit of CIL and will continue to be secured through s106 agreements. S106 agreements can also continue to be used for delivery on site of local infrastructure requirements on development sites, such as open space or local access or connections to services where these are needed to make the site acceptable in planning terms. See s106 FAQs.

16.  Will CIL receipts benefit local communities?

A local council (i.e. parish/town council) with an adopted Neighbourhood Plan will receive 25% of CIL receipts generated by development within the Neighbourhood Plan boundary (provided that development was given planning approval after the Neighbourhood Plan was adopted). In areas where no neighbourhood plan is in place, the local council will receive 15% of CIL receipts generated in the area.

17.  How much will be available each year?

This will depend on a range of factors, including the amount of ‘CIL chargeable’ developments that come forward. There will also be a lag as larger developments will not have to pay in full immediately, based on each Council’s Instalment Policy (this is to help ensure that these developments remain viable and in a position to make s106 contributions where appropriate).

18.  Will we be told how CIL funds have been spent?

Each Councils’ Monitoring Report will identify progress on the collection and spending of CIL monies. Please visit your local planning authority's website and search for Annual Monitoring Report.

Further Information: https://www.gov.uk/guidance/community-infrastructure-levy