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06/11/2018

Legal landscape:When does a planning obligation no longer serve a ‘useful purpose’?

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When is a ‘useful purpose’ not a useful purpose when it comes to planning obligations? A recent judgment brings clarity to a contentious area, says Charlotte Lockwood

The recent judgment in R (on the application of Mansfield District Council) v Secretary of State for Housing, Communities and Local Government [2018 EWHC 1794 Admin] provides further clarity on how the qualification “a useful purpose” set out in Section 106A of the Town and Country Planning Act 1990 (TCPA 1990) should be applied in practice.

Where agreement cannot be reached between the parties to modify or discharge an obligation, an application can be made to the local planning authority on the basis that it no longer serves a useful purpose.

But such an application has to be made within a time limit. If agreed on or before 6 April 2010, the limit is one month; after that date it is five years from the date the obligation is entered into.  

How should local planning authorities assess such applications? The approach was summarised in the judgment of R (The Garden and Leisure Group Ltd) v North Somerset Council [2003 EWHC 1605 Admin].

Here, Richards J determined that in addressing an application under section 106A:

“There are four essential questions to be considered: what is the current obligation? what purpose does it fulfil? is it a useful purpose? and if so, would the obligation serve that purpose equally well if it had effect subject to the proposed modifications? Mr Elvin lays stress on the words “equally well” and describes them as ordinary English words importing a principle of equivalence. Section 106A involves a precise and specific statutory test and does not bring in the full range of planning considerations involved for example in an ordinary decision on the grant or refusal of planning permission.”

Section 106A itself does not expressly prescribe that a “useful purpose” must be a planning purpose when considering an application to modify or discharge an obligation.

“Opinions differ over the approach to interpreting whether a planning obligation still serves a useful purpose”

However, opinions differ over the approach to interpreting whether a planning obligation still serves a useful purpose. One strand of argument has been that the planning obligation must still serve a useful planning purpose, thereby bringing into play the full range of planning considerations associated with the usual determination of a planning application.

The alternative has been to adopt a broader interpretation, thereby opening up the consideration of a useful purpose to include public interest arguments, as shown in the Mansfield case above.

Here, the local planning authority challenged an inspector’s decision to discharge a planning obligation securing money for highways works required to mitigate the development.

The planning authority had completed the works at a cost of £459,346, yet the developer had paid none of the money due under the Section 106 agreement as no development had begun on the site.

The developer was subsequently granted planning permission for a new scheme on the site and entered into a new S106 agreement. The developer paid £160,000 to the local authority, leaving an outstanding balance of £299,346. Again, no development took place on the site and the developer applied to discharge the planning obligation requiring payment of the balance.

On appeal, the inspector found that because the highway contribution was not necessary to make the residential development acceptable, it no longer served a useful purpose and should be discharged.

The local authority challenged this decision, contending that the inspector had incorrectly focused on the question of whether the obligation was sufficiently related to the planning permission, and had failed to consider whether it continued to serve a useful purpose, which was to recover public funds. The court agreed.

The clarification provided in this case as to the meaning of “useful purpose” removes the doubt surrounding the interpretation of this test for local planning authorities and applicants looking to have a planning obligation modified or discharged.

The widening of the test to include questions of public interest will arguably make it harder for applicants to satisfy this requirement; it would seem difficult to argue that a planning obligation no longer serves a useful purpose where it is required to recover expenses incurred by a local authority in providing public infrastructure to mitigate development impacts in the first place. 

Charlotte Lockwood is an associate specialising in planning with Roythornes Solicitors and a member of the East Midlands Young Planners

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