Housing and Planning Bill - Update: New resolution procedure for S.106 negotiation disputes

Housing and Planning Bill - Update: New resolution procedure for S.106 negotiation disputes


Author: Daniel Murphy

Applies to: England and Wales

The Housing and Planning Bill has now passed through the House of Commons, with MPs concluding reporting and final reading on 12 January 2016. The Bill will now be passed on to the House of Lords for its first reading.

Throughout the stages of reading the Bill, MPs have had a number of heated debates with a number of amendments causing consternation, especially in areas relating to housing.

However, one key amendment to the planning part of the Bill, is the proposal to insert of a new clause and schedule in to the Town and Country Planning Act 1990. The amendment introduces, for the first time, a dispute resolution process to move forward the negotiation and agreement of planning obligations between local authorities and applicants where the parties have failed to agree terms.

The new resolution procedure was intimated by the government early on in the Bill's consultation process and again when Fixing the Foundations was released in July 2015. However, when the Bill was first tabled last October it was surprisingly silent on the new resolution procedure.

The amendments, as currently drafted, allow an applicant or local authority to request that the Secretary of State appoint a person to help resolve issues where negotiations on the terms of planning obligations have stalled. Such appointment is subject to the Secretary of State considering that the local authority would likely grant planning permission if (and only if) a satisfactory Section 106 Agreement was in place.

The appointed person is required to prepare a report which records any agreed terms between the parties and recommends appropriate planning obligation terms. Both parties are obliged to co-operate and comply with any requests of the appointed person in the preparation of the report and throughout the process.

Where the report is issued and published and a Section 106 Agreement is entered into between the parties and accords with the recommendations in the report (and the local authority is content with those terms), the local authority may not refuse permission on a ground that the terms of the Section 106 Agreement are inappropriate. Vice-versa, if the report recommends the terms to be entered into, but this does not happen within a certain period, the authority must refuse permission.

Until the resolution process concludes, the applicant may not appeal nor may the local authority refuse permission.

These initial provisions provide the bare bones for a new dispute resolution procedure however, it will be the subsequent regulations which will flesh out the precise details of how the new procedure will work practically.

New regulations are likely to cover fees and how this will be apportioned between the parties, who will be appointed to deal with disputes and what powers they will have and, also the logistics of handling requests to appoint persons and prescribing the timescales for responding and managing matters.

For developers and local authorities, the draft provisions provide a last resort to resolving issues with Section 106 Agreements, which often delay the issuing of planning permission. Notwithstanding this, the proposals seem to have little interference with the planning process and will still leave the parties' rights intact as far as possible. At the same time the provisions would assist in preventing either party from using Section 106 negotiations as a delaying tactic.

We will continue to provide further updates as the Bill progresses through the House of Lords and towards Royal Assent.


This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.