Are monitoring fees a necessary planning obligation?
Anna Zatouroff examines a recent High Court decision on whether monitoring fees in a section 106 agreement could be charged under the Community Infrastructure Levy Regulations.
A section 106 agreement was entered into which required the developer to make contributions towards various infrastructure costs. This included a contribution of £3,750 in respect of the Council’s monitoring and administration costs: a standard fee charged by the County Council, calculated on a sliding scale as a percentage of the overall value of the financial contribution required from the developer.
The section 106 agreement included a ‘blue pencil clause’, which allowed the Planning Inspector to strike out obligations which were not “necessary to make the development acceptable in planning terms” – this is the test set out in regulation 122 of the CIL Regulations. The Inspector exercised its powers and rejected some of the County Council’s infrastructure contributions, including the payment of the monitoring and administration fee.
The County Council’s Application
The County Council brought judicial review proceedings in the High Court, submitting that the Inspector had misinterpreted the “necessity” test and had made an irrational decision in finding that whilst the planning obligations were necessary, monitoring of the obligations was not. The Secretary of State argued that the monitoring of planning obligations was part of the County Council’s statutory function in their capacity as local planning authority and a monitoring and administration fee should therefore only be imposed in exceptional circumstances.
The High Court rejected the Council’s application. The Court held that part of the local planning authority’s function is to administer, monitor and enforce planning obligations. There was nothing in legislation or in planning guidance that provided for planning authorities to charge the cost of administration and monitoring to the developer as part of a planning obligation particularly where, as in this case, it was based on a standardised sliding scale without any assessment of the work which the Council may carry out to administer and monitor the planning obligations.
While the Court ruled that standardised monitoring fees would be caught by and fall foul of the statutory “necessity” test, it conceded that monitoring fees could still be recoverable in exceptional circumstances (such as a nationally significant piece of transport infrastructure) where they would need to be decided on a case-by-case basis.
Oxfordshire County Council v Secretary of State for Communities and Local Government & Others  EWHC 186 (Admin)