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What is Section 106 (S106) funding?
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Q. What is Section 106 (S106) funding?

Section 106 refers to Section 106 of the Town and Country Planning Act 1990. This allows a local planning authority (LPA) to enter into a legally-binding agreement or planning obligation with a landowner in association with the granting of planning permission. The obligation is termed a Section 106 Agreement.

These agreements are a way of delivering or addressing matters that are necessary to make a development acceptable in planning terms. They are used to support the provision of services and infrastructure, such as highways, recreational facilities, education, health and affordable housing.

The scope of such agreements is laid out in the governmentís Circular 05/2005. Matters agreed as part of a S106 must be:

  • relevant to planning
  • necessary to make the proposed development acceptable in planning terms
  • directly related to the proposed development
  • fairly and reasonably related in scale and kind to the proposed development
  • reasonable in all other respects.

A councilís approach to securing benefits through the S106 process should be grounded in evidence-based policy.

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