High Court finds inspector was entitled to reject council's claim for section 106 administration fee

Out-Law News | 09 Feb 2015 | 5:27 pm | 2 min. read

The High Court has dismissed a council's challenge to a planning inspector's decision not to allow it to impose a standardised fee for administering and monitoring planning obligations under a section 106 agreement.

In a decision issued last week, High Court judge Mrs Justice Lang said the planning inspector had been entitled to conclude that the fee "was not 'necessary' to make the development acceptable in planning terms" and to strike the contribution out of the section 106 agreement.

Developer Cala Management had applied to Cherwell District Council in June 2013 for permission to construct 26 homes in the Oxfordshire village of Adderbury. The District Council refused permission, giving among its reasons that it could not be satisfied that necessary infrastructure would be provided, in the absence of a satisfactory planning obligation.

During the course of the developer's subsequent appeal, a section 106 agreement was agreed between the developer, the owners of the site, the District Council and Oxfordshire County Council. The agreement provided for financial payments to be made to the County Council before development commenced, in respect of public transport, adult day care, household waste, education, libraries and museums. It also required £3,750 to be paid to the County Council towards its costs in administering and monitoring the payments.

The agreement included a clause allowing the planning inspector presiding over the appeal to strike out contributions that did not meet the tests in regulation 122 of the Community Infrastructure Levy Regulations (the Regulations). The Regulations allow planning obligations to constitute a reason for granting planning permission for a development if they are "necessary to make the acceptable in planning terms"; "directly related to the development"; and "fairly and reasonably related in scale and kind to the development".

Mrs Justice Lang agreed with the inspector that the proposed administration fee failed the test relating to necessity under the Regulations. The judge said that the test "imposes a high threshold because the planning obligation has to be 'necessary', not merely desirable".

The judge found "nothing in the wording of the Town and Country Planning Act 1990, the Planning Act 2008, the Regulations, the National Planning Policy Framework or the Planning Obligations Practice Guidance which suggests that authorities could or should claim administration and monitoring fees as part of planning obligations."  She noted that the application was "a routine planning application for a relatively small development" and that the proposed fee was "based on [a] standardised table of fees rather than any individualised assessment of special costs liable to be incurred for this particular development".

"The only allowable contributions (education and library services) did not require ongoing management or maintenance; they were single payments, to be made prior to the commencement of development", the judge said. "I consider that the inspector was entitled to conclude that a contribution to the administration and monitoring costs was not 'necessary' to make the development acceptable in planning terms."

Mrs Justice Lang also said that it had not been irrational of the inspector to decide that education and library contributions were necessary to make the development acceptable but that the administration and monitoring fee was not.

"He was entitled to conclude that the increase in the number of residents did make it necessary for the developer to contribute to the additional costs of provision of local education and library services, in order for the development to be acceptable in planning terms, and that the development would then be acceptable in planning terms, even though the [County Council] (not the developer) would have to bear the relatively minor administration and monitoring costs which would be incurred as part of its functions as a planning authority," the judge said.

The County Council had also alleged that the inspector had failed to provide adequate reasons for his appeal decision. However, Mrs Justice Lang decided that the inspector's reasoning had been known to the County Council and that it had "not been prejudiced by the paucity of the inspector's reasoning" as laid out in his decision letter.