4. The Council's Approaches to Secure Contributions

Unilateral Undertakings

4.1. Section 106 Agreements (S106) and unilateral undertakings (UU) are types of planning obligation under Section 106 of the Town and Country Planning Act 1990. They are legal agreements between the local authority and the developer. The land itself, rather than the person or organisation that develops the land, is bound by the S106 agreements. They are a legal charge on the land, so their obligations transfer automatically with any change in ownership.

4.2. A unilateral undertaking is a legal deed, entered into by the landowner and any other party with a legal interest in the development site. Unilateral undertakings can assist in ensuring that planning permissions are granted speedily, which benefits both applicants and the Council. However, unlike S106 agreements they don't have to be entered into by the local authority.

4.3. A unilateral undertaking comes into effect when planning permission to which they are linked is granted although as with S106 agreements the relevant obligations are usually conditional on development being commenced.

4.4. Where financial contributions are known at an early stage and the package of planning obligations is relatively straight forward, namely involving commuted payments for affordable housing or permit free obligations, applicants are encouraged to submit a unilateral undertaking with their application. The intention is that the unilateral undertaking can be included with the suite of documents associated with the planning application.

4.5. While S106 agreements are often prepared following Planning Committee, the draft form of unilateral undertaking can usually be agreed prior to Planning Committee (the heads of terms may need to be changed following Planning Committee decision on the application) thereby avoiding delays in getting a final decision.

4.6. Unilateral undertakings will not usually be appropriate for major applications including applications for 10 or more new dwellings.

4.7. Where a planning obligation will not be covered by a Unilateral Undertaking, applicants will still be required to enter into a S106 agreement. This type of legal agreement will need to be entered into by the applicant, the Council and anyone else who has in interest in the land forming the application site.

B. Section 106 Agreements

4.8. Developers will be expected to make S106 contributions towards items of strategic and necessary infrastructure as identified in the most up to date IDP Part B, as well as any other site-specific infrastructure requirements arising from development proposals.

Retrospective Contributions

4.9. There will be instances where contributions shall be payable retrospectively. Even if the strategic infrastructure has been fully or partially built or provided as at the date the relevant S106 agreement is entered into, the S106 agreement will require payment of retrospective contributions to recognise the benefit which the relevant development is obtaining from the relevant infrastructure. In those instances, consideration in terms of cost, apportionment, provision of land, reimbursement, external funding, and viability, etc. would still be consistent with guidance set out in this document.

4.10. As discussed in Chapter 3, the types of infrastructure that would benefit from this approach are those that:

1. are of strategic nature or of critical importance to support the Local Plan, and
2. need to be in place or at least planned early on, prior to all relevant development taking place; and
3. is not funded by public funding.

4.11. Key considerations in drafting a S106 agreements regarding retrospective contributions are discussed in Chapter 5.

Monitor and Manage

4.12. The Council will continue to explore other alternative approaches to the conventional 'predict and provide' approach in planning for and delivering strategic transport infrastructure. A potential option being the 'monitor and manage' approach, which would involve preparation of a Traffic Monitoring and Management Plan (TMMP) and collection of appropriate monitoring data to assess whether the road network is operating according to the worst-case scenario baseline.

4.13. The principles of this approach can be summarised as follows: development proposals for site allocations will demonstrate how vehicle trip generation would be lower than the target set in the TMMP. This target is intended to positively challenge developers to pursue a creative approach to reduce transport impacts of their development. Developer contributions towards the package of transport mitigations will be due in line with the Infrastructure Delivery Plan or the outcome of the TMMP. In other words, if development fails to reach its target, contributions towards mitigation would be triggered. Development proposals for non-allocated sites will also have due regard to the TMMP. Such proposals will bring about vehicle trip generation over and above the target set out in the TMMP.

4.14. In this approach, the Council would be responsible for the monitoring of vehicle trip credits (unless agreed otherwise) and the collection of developer contributions, along with funding from all relevant public sources. The cost of monitoring is to be funded by developers.

4.15. There may be instances where some developers achieve their trip target, whilst others fail to do so. In this case, there may be a need to update the identified mitigation measures and associated costs. The Council will liaise with National Highways and ECC to consider undertaking necessary assessment to inform the IDP and subsequently, contributions from responsible development sites.

4.16. Under this approach, there is a need to manage exposure and counterparty risk. As such, the Council may require the mitigation contributions be paid in advance by developers into escrow accounts; this money will be held in the escrow accounts for an agreed period of time after the completion of development, to be used towards mitigation works should development fail to reduce its impacts.

4.17. Escrow accounts can be useful when contributions are requested on a per unit basis or when S106 payments are required only at trigger points. When an escrow agreement is entered into, an escrow account is opened to ring-fence the money for the mitigation work and developer is obliged to pay either all or a percentage of the total sum into an escrow bank account. Before the commencement of development, developer will provide an estimated cost based on its anticipated impacts and the rates / percentage that it expects to pay into the escrow account, for the approval of the Council. During the phases of development, the developer will make escrow payments into the escrow account on the basis of the rates and periods agreed. Appropriate arrangements, including review mechanisms, need to be in place to manage the expenditure of such funds. In the event that the balance of the escrow bank account exceeds any current demand or anticipated demand for payment, the escrow sum will be determined by the agreed review mechanism. A chosen firm of solicitors will act as the neutral third party, constrained from dealing with the money other than in accordance with the strict instructions agreed in advance by the parties concerned.

4.18. The Council may also consider to secure planning obligations through performance bonds (contract bonds), as it is reasonable for the Council to take steps to secure the delivery of mitigation, in the event of unforeseen circumstances such as a developer going into administration whilst the transport impacts of its development are not reduced.

C. Section 278 Agreement

4.19. Where necessary, the Council will require developers to enter into a S278 agreement (Highways Act 1980) to fully pay or make contributions towards the carrying out of works to the highway impacted by their development schemes. In some cases, a developer may be required to carry out the works in lieu of payment.

D. CIL

4.20. In addition to the above contributions, development will be liable to pay CIL as and when CIL is adopted in the Borough, to fund Borough wide place-making infrastructure as discussed in Chapter 3.