Shropshire Council

Developer contributions

What is a Section 106 agreement?

Under Section 106 of the Town and Country Planning Act 1990 (as amended), planning obligations, commonly known as S106 agreements are a legal agreement between the local planning authority and an applicant/developer. They are used to make a development acceptable in planning terms, which would not otherwise be acceptable. Often referred to as ‘developer contributions’, they are frequently used to secure local infrastructure to meet the needs of residents of new developments, lessen the impact of development and/or compensate for loss or damage caused by the development itself. A S106 agreement is usually completed following the resolution to grant planning permission, and should ensure the proposed development conforms to local, regional and national planning policies.   

A ‘unilateral undertaking’ is a voluntary legal agreement entered into by developers to carry out works or to pay a financial contribution. The council is not a party to this agreement.

Regulation 122 of the Community Infrastructure Levy Regulations 2010 (as amended) states that Section 106 agreements can only be used where they are:  

  • Necessary to make the development acceptable in planning terms 
  • Directly related to the development, and
  • Fairly and reasonably related in scale and kind to the development

If an obligation doesn't meet these tests, legally it can't be considered in the granting of the planning permission. 

What are Section 106 agreements used for? 

The requirements of the S106 will vary depending upon the nature of the development, and the impact on the local area. Planning obligations are often used to secure affordable housing (either on-site or as a financial contribution in lieu of on-site provision), or to obtain financial contributions to secure infrastructure, for example, recreational facilities and highways. In addition, they can also be used to restrict use of the land or the development itself. 

The most common obligations include: 

  • Affordable housing 
  • Public open space/play area 
  • Highways  
  • Education  

When are Section 106 contributions paid? 

The trigger points for delivery of an obligation or for payment to be made by the applicant/ developer will be specified in the agreement. The timing of this will be dependent on the type of contribution, size of the development and timing of when delivery of the obligation is required.   

For outline planning permissions, the requirements for each phase of the development will be specified in the S106 agreement, and in the case of affordable housing the contribution will be specified as a formula which applies the affordable housing target rate that is prevailing at the time that the reserved matters for each phase are submitted.

Find out more from our Type and Affordability of Housing Supplementary Planning Document (SPD).

The council would expect financial affordable housing contributions to be made in the following timescales: 

Affordable housing payment period 

Number of dwellings in the development 

Payment periods for financial contributions to affordable housing 

1 

Two years from commencement, or three months after completion of the development, whichever is the sooner. 

2+

One year from commencement or on completion of the development, whichever is the sooner. 

Further information regarding the council's planning policy and supplementary planning documents (SPDs) can be found on this website.

It is important to note that an obligation will only be realised if the planning permission is implemented and the trigger point specified within the Section 106 agreement is achieved. 

How long do we have to spend S106 funds? 

A time limit is usually set for spending the contributions received. This will be specified in the S106 agreement.  

Land charges  

All S106 agreements run with the land. They are therefore registered as a local land charge, and as such may be enforced against the original signatory to the agreement and against successors in title. The agreement will be revealed in any local land charges search, until such time as the obligations within the agreement have been discharged by the local planning authority.   

Can I obtain a copy of a Section 106 agreement? 

Copies of agreements can be downloaded free from the Planning section of this website.

In some cases, the agreement may not be available online (for example due to the size of the document). If you are unable to find the agreement that you are looking for, please email the council's business support officers, who will arrange for a copy to be made available to you: 

Support officer contacts are dependent on the geographical location of the development site within the county: 

Annual infrastructure funding statement 

The Infrastructure Funding Statement provides an annual summary of financial contributions received by the council in connection with the Community Infrastructure Levy (CIL), Section 106 agreements and Highways works completed via Section 278 agreements. 

The most recent IFS covers the period 1 April 2019 to 31 March 2020. S106 data for this period is detailed in the following tables: 

Community Infrastructure Levy (CIL)

What is CIL? 

The Community Infrastructure Levy (CIL) is a charge on new development to help fund supporting infrastructure across Shropshire. Within Shropshire, CIL applies to all development that involves: 

  • The formation of one or more new dwellings (including holiday lets), either through conversion or new build, regardless of size (unless it's ‘affordable housing’); or 
  • The establishment of new residential floorspace (including extensions, replacements and annexes ancillary to existing dwellings) of 100sqm or above. 

Development for other uses, such as commercial, are not liable for CIL in the Shropshire Council area. Further information on CIL and how it is collected can be found on our CIL pages.

What is CIL used for? 

The council has resolved to distribute CIL to allow a direct link between new development and its contribution to the delivery of local community infrastructure needs. 

Within Shropshire, CIL is distributed as follows: 

CIL fund 

Proportion of total fund 

Responsible party 

Area for spend 

Administrative fee 

5% 

Shropshire Council 

Administrative expenses incurred during the implementation and enforcement of CIL. 

Neighbourhood Fund 

25% where there is a neighbourhood plan or neighbourhood development order (uncapped) 

15% where there isn't a neighbourhood plan (capped at £100 per council tax dwelling)

Town and parish councils 

Provided directly to the local town/parish council to fund locally identified infrastructure projects. 

Please note: The Neighbourhood Fund only applies where the CIL liability notice (usually issued shortly after a planning application is approved) has been issued since the introduction of the 2013 Amendment CIL Regulations on 25 April 2013.

Of the remainder: 

Strategic Infrastructure Fund 

10% 

Shropshire Council in conjunction with infrastructure providers 

Strategic infrastructure priorities across Shropshire. 

Local infrastructure Fund 

90% 

Shropshire Council in conjunction with town/parish councils 

Local infrastructure priorities to meet the infrastructure needs in the area where development takes place, as identified by town/parish councils within their place plans. 

CIL income from new development can be spent on anything that constitutes 'infrastructure' as defined by Regulation 216 of the 2008 Planning Act and the CIL Regulations (as amended). This includes, but is not limited to, roads and other transport facilities, flood defences, schools and other educational facilities, medical facilities, sporting and recreational facilities, and open spaces. Further details on what CIL may be spent on can be found in the annual infrastructure funding statement that we publish each year. A copy of the most recently published statement is available on this website.

When is CIL paid? 

CIL becomes payable when development commences. Payment can be made in full or by instalments, in accordance with the 'Shropshire Council: Payment by Instalment' policy. The liable party is required to serve a CIL commencement notice on Shropshire Council as the CIL collecting authority prior to the commencement of development to ensure that a CIL demand notice can be issued to confirm when payment is due. Should a CIL commencement notice not be served on Shropshire Council prior to the commencement of development, we are required to deem a commencement date and require full payment of the CIL liability immediately. 

Further details on the payment of CIL and the consequences for liable parties for failure to pay can be found on our CIL pages. 

Annual infrastructure funding statement 

The infrastructure funding statement provides an annual summary of financial contributions received by the council in connection with the Community Infrastructure Levy (CIL), Section 106 agreements and highways works completed via Section 278 agreements. The statements published to date are available on the council's CIL pages.

CIL income and expenditure 

The council has published additional data regarding CIL income and expenditure in support of the annual infrastructure funding statement. It is envisaged that further data will be published quarterly.

Take a look at the data »

What are Section 278 agreements

Section 278 agreements (S278) under the Highways Act 1980 are legally binding agreements between the local highway authority and the developer to ensure delivery of necessary highway works as a result of new development. Type of works may include: 

  • Roundabouts
  • Priority junctions
  • Junctions with traffic lights
  • Right-turn lanes
  • Improved facilities for pedestrians and cyclists
  • Improvements to existing junctions
  • Traffic calming measures