LGA backs standardising routine elements of section 106 agreements but warns against “one-size-fits-all” approach

The comments came in response to the Government's consultation on introducing standardised section 106 legal agreements and affordable housing schedules for medium-sized sites.

The Chartered Institute for Housing (CIH) has also welcomed efforts to standardise the planning agreements, but said councils must retain some influence over them to cater to local circumstances.

The Ministry of Housing, Communities and Local Government launched its consultation in August, asking for views on the following four standard templates for medium sites:

1. Bilateral agreement comprising standard clauses template and Schedules for Financial Contributions and the Council’s Covenants.
2. Unilateral Undertaking comprising standard clauses template and a Schedule for Financial Contributions.
3. Affordable Housing Schedule for Full Planning Permissions, including a discretionary cascade mechanism.
4. Affordable Housing Schedule for Outline Planning Permissions.

Responding to the consultation, the LGA said it welcomes the efforts to streamline and standardise routine elements of section 106 agreements "in principle", stating that “prolonged” and “repetitive” legal negotiations create unnecessary delays for councils and developers.

However, the LGA warned that any standardisation must not restrict local authorities from recovering the full administrative and legal costs associated with drafting, monitoring, and enforcing planning obligations.

It said it would welcome the inclusion of clauses securing local planning authority legal fees, monitoring fees (under CIL Regulation 122(2A)), and enforcement costs.

The response added: "Furthermore, alongside introducing a national default fee for Section 106A modification applications, LPAs must retain the statutory right to pass on all external legal and specialist viability consultancy costs to the applicant to achieve 100 per cent full cost recovery."

The LGA also cautioned against moving towards a rigid, "one-size-fits-all" approach in terms of conditions across diverse local housing markets and agreed local policies.

It said that s106 agreements vary "by their nature" and therefore work well on large or more complicated sites as they allow for phasing and give additional flexibilities to both developers and local authorities.

To help preserve some flexibility, the LGA said clear guidance on how to amend the standardised templates to reflect site specifics will be required.

The response added: "S106 agreements remain contracts. They are deeds of covenant governed by contract law between willing parties.

“While national policy under Policy DM6(4) encourages the use of model obligations unless there are ‘strong reasons’ to depart from them, contract law dictates that parties cannot be forced into rigid standard wording where site-specific constraints, title complexities, or local plan policies dictate a different approach."

Cllr Carl Cashman, Chair of the LGA's Inclusive Growth Committee, Local Government Association, said: "S106 agreements must remain flexible enough to accommodate site-specific phasing, local tenure priorities, bespoke infrastructure triggers, and local plan viability requirements.

“Standardised templates must be treated as intended here by MHCLG, as adaptable model guidance rather than solidify into rigid approaches."

The CIH set out four key points in its own response to the consultation. The first expressed support for standardised templates for medium sites to speed up the Section 106 process and provide consistency across England.

“However, it is important that local authorities are still able to influence S106 agreements with the required flexibility to meet local needs and local plans,” it said.

It meanwhile said the Government’s proposed ‘cascade process’ could be necessary in exceptional circumstances “but must be at the local planning authority’s (LPA) discretion and should be strengthened to protect on-site affordable housing delivery. This includes further guidance on ‘reasonable endeavours’ for LPAs”.

Its third key point stated that unspent contributions of affordable housing should not be repaid to developers and should instead be ringfenced to support affordable housing delivery by the local strategic authority or Homes England.

Finally, the CIH said that greater expectation should be included within the template that developers, local authorities and housing providers should engage with the government’s endorsed National Section 106 affordable housing engagement guidance, and that should sit alongside the standardised template.

Adam Carey