Much obliged: Infrastructure contributions

It is not unusual for applicants for planning permission to be confronted with statements such as the following from Elmbridge council: “For all new planning applications for additional housing and/or commercial floor space greater than 100m², Elmbridge council will expect infrastructure contributions to be made in accordance with the above supplementary planning document. Applicants are encouraged to calculate the amount using an electronic tariff sheet, which can then be submitted with a planning application as confirmation of the applicant’s willingness to enter into a planning obligation.”

Applicants are often required to submit a draft unilateral planning obligation (UPO) before they know whether planning permission is likely to be granted. Do local planning authorities (LPAs) know how frustrating it is for an applicant to incur the costs of submitting a UPO only to be told that the application has been refused?

In three recent appeal decisions on sites across Surrey, inspectors have determined that the tariff form of infrastructure contributions, as practised by those authorities, does not comply with section 106 of the Town and Country Planning Act 1990 or Circular 05/2005.

In all the cases, there had either been no attempt by the LPA to demonstrate how the proposed development triggered the requirement for a contribution, or the inspector questioned whether the requested payments were of a fair and reasonable scale. In the rush to collect contributions, planning authorities are ignoring the circumstances in which they can and should be sought.

Circular 05/2005 makes it clear that LPAs should only seek planning obligations when the following tests are met. An obligation must be:

• Relevant to planning
• Necessary to make the proposed development acceptable
• Directly related to the proposed development
• Fairly and reasonably related in scale and kind to the development
• Reasonable in all other respects.

Paragraph B7 makes it clear that obligations should never be used purely as a means of securing for the local community a share in the profits of development; that is, as a means of securing a “betterment levy”.

Sophisticated applicants will question the requirement, but many will not object

Paragraph B35 also reinforces the message that standard charges and formulae applied should reflect the actual impact of the development or a proportionate contribution to an affordable housing element.

Too many authorities are forgetting that the standard charges are “merely quantitative indications of the level of contribution likely to be sought through a planning obligation, towards the provision of infrastructure that is necessitated by a new development”. Ask why a contribution is required and you will often find yourself simply referred back to the formula.

The concern is that while sophisticated applicants will question the requirement for a contribution, many will not object when payment is demanded of them, regardless of whether the requested sums comply with the tests and with no attempt on the part of the local planning authority to demonstrate how the development triggers the requirement. Conversely, by failing to justify the requirement for a contribution, LPAs may find themselves losing the opportunity to impose a charge at the appeal stage.

Developers should therefore ask the council to explain why the application and development proposed raise the requirement. The council will need to have proof that there is a real need.

Change is, however, on the horizon. The Planning Act 2008 introduces the community infrastructure levy as a new charge that local authorities in England and Wales will be able (but not required) to levy on most types of new development in their areas. The charge will be based on a formula that relates the charge to the size and character of the development. The proceeds will be spent on local and sub-regional infrastructure to support the development of the area.

• The communities department’s consultation on the proposals for the community infrastructure levy is available for comment at www.communities.gov.uk