High Court reduces development costs

The proposed Section 106 Agreement also contained a standard provision for payment of the Local Planning Authority’s administration fees and monitoring of the Developer’s obligations.

The High Court in the case of Oxfordshire County Council v Secretary of State for Communities And Local Government and others agreed with the planning inspector that the obligation to pay the monitoring and administration fees were not ‘necessary’ to make the development ‘acceptable in planning terms’ and therefore fell foul of the test introduced by Regulation 122 of the Community Infrastructure Levy Regulations 2010 relating to the limitation on the use of planning obligations.

In reaching its decision the High Court decided that the imposition of administrative and monitoring functions in this instance was a standard process by the Local Planning Authority.

The imposition of such costs may be lawful in some circumstances such as larger scale developments but as a general rule local authorities will no longer be able to recover such costs. Typically those costs have been in the region of 5% of the total value of the contributions to be made by a developer and therefore will represent a significant saving.