Section 106 obligations and Regulation 122 (and Goldilocks)

The decision of HHJ Jarman KC in December 2022 in R(oao Whiteside)-v-Croydon Council (1) Stars Homes (2) and Liberty Speciality Markets (3) [2022] EWHC 3318 (Admin) was a victory for common sense and the continuation of the Planning Court’s reluctance to uphold challenges to planning permissions which are based on a hyper legal analysis of Local Planning Authority decisions.

Summary of the facts

Croydon Council granted planning permission on 25 February 2022 for the demolition of a dwelling and garage and the erection of two three-storey buildings comprising seven residential units with associated parking, cycle and refuse storage.  For a relatively modest proposal, the Council received 117 objections.

A Section 106 Unilateral Undertaking was submitted to the Council which captured the requirement to make a financial contribution of £10,500 (£1,500 per dwelling) towards sustainable transport improvements, the committee report having acknowledged the site’s poor public transport links.  The committee report referenced the Local Plan policies which supported the contribution and stated that the sustainable transport initiatives would include on-street car clubs with electric vehicle charging points (EVCP), general expansion of the EVCP network in the area, traffic orders at around £2500, signing, lining of car club bay, EVCP provision including electrics and set up costs for the car club for which every residential unit would be provided with a minimum 3-year membership. The contribution would also be put towards extension and improvements to walking and cycling routes in the area and improvements to local bus stops.

There is nothing unusual on how the contribution was intended to be spent.

The Claimant, Mr Whiteside, challenged the grant of permission on two grounds:

(1)         the undertaking didn’t secure the free membership of a car scheme and so the grant of permission did not fall within the scope of delegation of the decision, and/or the committee was materially misled on this point;

(2)         there was inadequate evidence as to how the figure of £1,500 was calculated or how the £10,500 was to be spent, and thus a failure to comply with regulation 122 of the Community Infrastructure Levy Regulations 2010.

The claimant was unsuccessful on both grounds.  The second is of particular interest.

Regulation 122(2) of the Community Infrastructure Regulations 2010 – a refresher

Regulation 122(2) put into law what was previously only in guidance concerning when a planning obligation can lawfully be taken into account in granting planning permission.  It provides:

a planning obligation may only constitute a reason for granting planning permission for the development if the obligation is—

(a) necessary to make the development acceptable in planning terms;

(b) directly related to the development; and

(c) fairly and reasonably related in scale and kind to the development.

The Claimant submitted that there was a lack of particularisation in how the £10,500 would be spent specifically or when the initiatives will be delivered.  Therefore regulation 122(c) was not met.  It was not in dispute that these details were not before the committee when it made its decision.

HHJ Jarman KC rejected that submission, preferring instead the Council’s and the Interested Parties’ submissions that it was not necessary for the committee to be told precisely how the contribution was calculated or to be given further details of the type of measures it would fund.  For the purposes of regulation 122(2)(c) there is no need to quantify the effect of the obligation.  It was clear that the financial contribution was just that, a contribution, to a variety of sustainable transport initiatives, and the committee may be taken to be familiar with all of: the need to promote sustainable transport; the CIL regulations; and the application of the figure by the authority’s strategic transport team which is a matter of expert judgment.

Next is my tenuous Goldilocks link.  The Judge said at §33:

‘Had the contribution proposed been a very large or a very small sum, the committee might have needed further information about its calculation before being satisfied that it fairly related to the scale and kind of the development. However, the contribution suggested, £1,500 per unit, is modest and the committee was entitled to take the view that it was fairly and reasonably related to the scale and kind of the development.’

Further, at §35:

‘…..it is clear from the policies referred to in the officer’s report and the wording of the report itself that all that was required was a financial contribution towards sustainable transport initiatives. It was not suggested that a particular initiative should be wholly funded under the agreement. Clearly such initiatives may vary from time to time and from place to place.’

He added at §37:

‘…the present case is not the sort of case where the committee concluded that the impact of the development in terms of car use had to be mitigated to a certain level or in certain way. Members are to be taken as being aware of the sort of contribution being required in similar applications in the borough. The level of detail as to its calculation or as to how it would be spent, to the extent suggested by Mr Mackenzie (*Counsel for the Claimant), is not necessary in order for the committee to be satisfied that it related reasonably in scale and kind to the proposed development. Some financial contribution to such initiatives was required to make the development acceptable given the increase in private car use that it would entail.’

I started this note by saying that the decision was a victory for common sense and a continuation of the Planning Court not wanting to overly scrutinise the decision making of LPAs.  As with a lot of planning law, it is a balance.  Members need to be provided with enough information to be able to make an informed decision - taking into account proposed mitigation - but they must also be taken as to being aware of their Local Plan policies and how such contributions are used in practice in their patch.

Whilst I haven’t read the pleadings in the case, it would seem Mr Whiteside’s gripe in this case was that planning permission was granted for a development of which he did not approve. It is hard to credit that he welcomed the residential development but was unsatisfied with the sustainable transport improvements being sought.

Practical Tips

The decision in Whiteside is to be taken in its factual and policy context. Simply saying that a financial sum in a planning obligation is a contribution to a wider spend without showing compliance with each of the three elements of Regulation 122(2) is a risky approach.  However, I suspect that this judgment will be cited often, particularly in appeal situations where Statements of Compliance may be a bit light on detail as to how financial contributions are to be spent. 

In my experience, the degree of scrutiny that is applied to contributions in a Section 106 obligation differs from Inspector to Inspector, but where LPAs can show their workings, it is always advisable to do so, particularly (as we now know) in the case of very large or very small sums.

For more information, please contact Duncan Moors.