Planning essentials case update: S106 agreements – to publish or not to publish

A recent Court of Appeal case highlights the duty of a local planning authority (LPA) to publish draft/completed section 106 agreements. Failure to do so could be challenged by a third party by judicial review and lead to the quashing of the connected planning permission.   

Article 40(2) of the Town and Country Planning (Development Management Procedure) (England) Order 2015 (the DMPO) requires every LPA to keep a register of every application for planning permission relating to its area. Article 40(3)(b) details that the register must contain a copy of any planning obligation (or highways agreement) proposed or entered into in connection with the planning application. 

In R (Greenfields (IOW) Limited) v Isle of Wight Council[1] the LPA had recommended the grant of planning permission for a residential development subject to a section 106 agreement (s106) including a financial contribution towards certain highway works. An update was later provided by planning officers advising that the costs of the highway works, as estimated by the applicant, would be in the region of £777,000. The s106 was subsequently negotiated – securing a contribution of £406,359.  At no time before the grant of permission did the LPA publish a copy of either the draft or completed S106.

The Court accepted that the LPA had failed to comply with its duty under Article 40(3)(b) of the DMPO. The Court concluded that this failure prevented the appellant from commenting on the s106 and as such the decision to grant planning permission was unlawful.  The permission was quashed. 

The Court noted that the Article 40(3) duty is not a duty to consult but merely a duty to provide information. The purpose of Article 40(3)(b) is to allow members of the public an opportunity to comment upon a draft or completed s106.  Therefore, the Court confirmed that it does not mean that a permission will automatically be invalid due to any failure by an LPA to comply with the duty[2].

The Court considered the consequences of the LPA’s failure to comply with its duty on the public’s ability to comment on the 106. This will depend on the particular circumstances of the case. For example, it may be relevant that whilst the s106 itself has not been published, the content of the agreement is in the public domain.  In this case, the content of the s106 (i.e. the amount of the financial contribution) was not published before the grant of permission. Therefore, there was little or no compliance with the purpose of Article 40(3). This deprived the appellant of the opportunity to comment. 

The Court then considered whether the appellant’s inability to comment was significant; by considering whether the appellant might have wished to say anything.[3] In this case, given the change in contribution amount, that was clearly the case. 

The Court also considered the likelihood of whether the appellant would have commented. The Court noted that failure to request a copy of a s106 may indicate that the person would not have commented on it[4]. In this case, the appellant had been regularly checking the Council’s register to see if a draft was available and the Court concluded that it was very likely that they would have commented. 

This case tells us that a failure of an LPA to publish a draft / completed s106 will not always be fatal to the planning permission. The Courts will consider the circumstances of the case – including the extent of the failure, the consequences of the failure, the significance of the third party’s inability to comment, and the likelihood of the third-party commenting. However, there is a real risk of quashing – and this comes down to whether or not the third party has ben prejudiced.  

We recommend, wherever you are negotiating a section 106 agreement, that you actively engage with officers to ensure that the LPA publish a draft or completed s106 well in advance of the grant of planning permission so as to give third parties the opportunity to comment. This is particularly important where the proposed development is contentious or the scope of the s106 has changed since a planning committee resolution.