• Finance source: Local authority charges
• Funded project phase: Build, Operate
• Typical project size: Below £1 million
• Match funding: Depending on the specific tool
• Security: N/A
• Speed of accessing finance: Aligned with asset delivery
• Applicable to stages:

Developer contributions are planning tools that can be used to secure financial and non-financial contributions (including affordable housing), or other works, to provide infrastructure to support a development and mitigate the impact of development.

They can be used to help deliver infrastructure to support the development of a local area. In addition, some areas have developed carbon offsetting payments which may be pooled and used to fund low/zero carbon projects.

Planning obligations

Planning obligations are legal obligations entered into to mitigate the impacts of a development proposal.

This can be via a planning agreement entered into under section 106 of the Town and Country Planning Act 1990 by a person with an interest in the land and the local planning authority, or via a unilateral undertaking entered into by a person with an interest in the land without the local planning authority.

Planning obligations run with the land, are legally binding and enforceable. A unilateral undertaking cannot bind the local planning authority because they are not party to it.

Planning obligations are also commonly referred to as ‘Section 106’, ‘S106’ and ‘developer contributions’ when considered alongside highways contributions and the Community Infrastructure Levy (Department for Levelling Up DCLG, 2016).

Community Infrastructure Levy (CIL)

The CIL is a charge which can be levied by local authorities on new development in their area. It is an important tool for local authorities to use to help them deliver the infrastructure needed to support development in their area.

The levy only applies in areas where a local authority has consulted on, and approved, a charging schedule that sets out its levy rates and has published the schedule on its website.

The CIL regulations require all local planning authorities that issue a CIL liability notice or enter into Section 106 planning obligations during a reporting year to publish an infrastructure funding statement (IFS) at least annually. The IFS should, as a minimum, include the information set out in Schedule 2 to the Community Infrastructure Levy Regulations 2010, as inserted by the 2019 regulations (Department for Levelling Up, and Housing & Communities, 2019).

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