Planning obligations – perpetuating misunderstandings

Earlier this month, DCLG issued a “Plain English Guide to the Planning System”. It is only 20 pages long, including title pages, so it’s bound to be something of a summary. But on planning obligations is continues to misrepresent the position. It says:

“Planning obligations are used to mitigate the impact of proposed developments. They are commonly secured under section 106 of the Town and Country Planning Act 1990 (as amended). A developer may be asked by a local planning authority to enter into an obligation to, for example, undertake works, provide affordable housing or provide additional funding for services. Any planning obligation must meet the tests of being:
• 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. “

There are three things wrong with this.

1 It confuses the desire to secure certain things with the tool used to achieve that. So the wish is to ensure that impacts are mitigated. There are several tools to do that. The first tool is conditions. Many impacts can be mitigated by imposing a condition. For example particular materials can be specified, or the construction of protection required as part of the development or before development occurs. Planning policy has for many years been to use conditions in preference to section 106 agreements. Other tools are the description of the development permitted, and of course s.106 itself. This distinction is important because the confusion fosters the now deep-seated tendency to call for “planning obligations” to secure extraneous benefits, or some sort of community gain.

2 It says that planning obligations can be secured under legislation other than s.106. “They are commonly secured under section 106” Let’s get this clear; planning obligations can only be secured by s.106. They are a creature of s.106 which defines them very closely. My post of a couple of days ago shows what happens when people go outside what s.106 allows – the promise is no planning obligation at all, and cannot be enforced against successors in title using the mechanism specifically designed for that purpose – s.106 itself.

3 It says that all planning obligations must meet the tests now found in Reg 122 of the Community Infrastructure Levy Regulations 2010. This completely ignores the fact that Reg 122 simply prevents a non-conforming planning obligation from being taken into account in the grant of planning permission. There is nothing to stop a planning obligation being given separately from the grant of permission, though that is rare. But also, it ignores Derwent Holdings v. Trafford BC [2011]EWCA Civ 832 and Savage v. Mansfield [2015]EWCA Civ 4 which clearly allow planning obligations which deliver the desirable and not only the necessary, directly related and reasonable.

Why is this important? Firstly, it leads to the sort of errors we saw in Savage v. Mansfield. Where planning permission is granted relying on a benefit which is not secured within s.106 it will mean that the planning permission is voidable, unless (as is rarely the case) it is enforceable under other legislation. Section 16 of the Greater London Council (General Powers) Act 1974 is one such example, but as it says on the tin, it doesn’t apply outside Greater London. This is a very easy way in for objectors to quash a valuable permission.

Secondly, it delays planning and gives planning obligations a bad name. It takes time to negotiate s.106 agreements, and conditions are much faster. By suggesting that planning obligations are the device of choice to secure mitigation, simpler solutions are ignored.

Thirdly it leads legislators and policy makers to focus on s.106, which is just a legal device to make promises enforceable against successors in title, rather than policy. Positive promises do not run with the land, and negative promises can only enforced by landowners who own land designed to benefit from them. So, planning authorities were given the statutory mechanism of s.106 to enforce these. But as long ago as 1991 John Gummer limited what old s.106 could do and imposed the current straitjacket on drafting in, it is reckoned, a desire to put an end to “planning gain”, the buying and selling of planning permissions. But this laudable policy objective is best controlled by the Secretary of State intervening where he or she sees abuse of the system. The call-in power is there for situations like that. But instead, the wide powers to ensure that promises can be enforced were cut down by the Planning and Compensation Act 1991 which required promises to fit within a narrowly drafted s.106(1) in order to be enforceable against successors in title. The result has been convoluted drafting of s.106 agreements ever since, and cases like Savage v. Mansfield.

Fourthly it leads to mistakes by legislators and Government legal draftsmen who in Regulations 122 and 123 of the Community Infrastructure Levy Regulations 2010 ban things from being done under s.106 which with a little legal ingenuity can be done under other powers. Regulations 122 and 123 ought to focus on the substance of the promise rather than the legal route used to enforce it.

And fifthly, it suggests the policy makers at DCLG really don’t understand the system. Which would be a shame because the rest of the guidance is very helpful and definitely clearly written.