Bus service contributions and what a council can require

A bus contribution request usually arrives in a highway authority consultation response as a round number per dwelling, with no working behind it. Regulation 122 of the Community Infrastructure Levy Regulations 2010 says an obligation can only be a reason for granting permission where it is necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind to it. A figure with no evidence behind it struggles on all three.

That is not an argument for refusing to contribute. It is an argument for asking what the money buys.

The legal tests a contribution must pass

Regulation 122 makes the three tests statutory rather than advisory, and they apply to each obligation individually. An obligation that fails any of them cannot lawfully be taken into account in the decision.

Necessary means the development would be unacceptable without it. Directly related means the spending addresses an effect of this development rather than a pre-existing deficiency. Fairly and reasonably related in scale and kind means the sum reflects the proportion of the need that the development creates.

The pooling restriction that once limited authorities to five obligations towards a single infrastructure project was removed in September 2019, so contributions from many schemes can now be pooled towards one bus service. That removes an old objection but changes nothing about the three tests, which still apply to each contribution.

Evidence the authority should produce

A defensible request rests on a short chain of evidence: the existing service and its capacity, the trips the development will generate, the mode share the transport evidence assumes, the enhancement needed to support that mode share, its cost, and the proportion of that cost attributable to this development.

Any link missing in that chain is worth questioning. The most commonly missing one is the connection between the mode share the applicant's own Transport Assessment assumes and the service enhancement the authority is asking for. If the assessment claims a bus mode share that the existing timetable cannot support, the contribution is easier for the authority to justify, not harder. That cuts both ways, and applicants sometimes argue themselves into a larger contribution.

Ask for the calculation in writing. Officers who have done the work will supply it. Officers who have applied a standard rate without thinking will usually say so, at which point the conversation becomes more productive.

Pump priming compared with permanent subsidy

Most bus contributions are pump priming: funding a new route, a diversion into the site or an increase in frequency for a defined period, on the basis that patronage from the new development will make the service commercially sustainable by the end of it. Three to five years is the usual range.

Permanent revenue subsidy is a different proposition and much harder to justify under the three tests. An obligation that funds an operating deficit indefinitely is rarely necessary to make a specific development acceptable, and the scale and kind test becomes difficult when the sum is open ended.

The honest risk with pump priming is that patronage does not materialise and the service is withdrawn the month after the funding stops. That outcome is not the developer's legal problem, but it is a reason for the authority to look carefully at whether the route it is funding has any realistic prospect of standing on its own. A contribution towards a service that will fail is arguably not necessary to make the development acceptable at all.

Calculating a contribution per dwelling

Two approaches are in common use. A cost based calculation divides the funded enhancement by the number of dwellings, sometimes weighted by size or expected occupancy. A tariff approach applies a published rate from a supplementary planning document.

Tariffs are lawful, but they are not self justifying. The authority still has to show that the rate produces a figure meeting the three tests on the facts of the particular application, and a tariff applied mechanically to a site already served by a frequent bus route is vulnerable.

Watch for double counting with other obligations. A travel plan that funds discounted passes, a contribution to the same service, and a further sum towards a wider transport strategy can end up paying three times for one outcome. Set the whole package out on a single page with what each item delivers, which also helps at the viability stage. The same discipline applies to car-free and permit-free obligations, where the parking restraint and the bus contribution are two halves of one argument.

Trigger points and repayment clauses

Negotiate the trigger, not just the sum. Payment on commencement funds a service before anyone lives there. Payment on occupation of a defined number of dwellings aligns the service with the demand, and phased payments across build out are usually better still for both sides.

Three drafting points repay attention. A repayment clause returning unspent money after a defined period, commonly five or ten years from receipt, with interest. A specification of what the money may be spent on, tight enough to be meaningful and loose enough to survive a change of operator. And an index, usually a construction or general price index, stated with its base date so that the sum does not drift in negotiation.

Also agree who reports on the spending. An obligation with no monitoring provision leaves everyone guessing, and authorities now charge monitoring fees under the statutory provisions for doing exactly this.

Real time information and stop infrastructure

Capital items are often easier to justify than revenue. A new or relocated stop serving the site, a shelter, a raised kerb to allow level boarding, a flag and timetable case, lighting, a dropped crossing on the desire line and real time information at the stop are all directly related to the development in a way that a service subsidy sometimes is not.

Where the works sit within the highway, they are usually delivered through a highway works agreement rather than through a financial contribution, which gives the developer control over cost and programme. Where they sit on the site, they belong in the layout and should appear on the planning drawings.

Accessibility is part of this. Level boarding, tactile surfaces and a continuous accessible route from the stop into the site are expectations rather than extras, and they interact with the public sector equality duty the authority carries.

Challenging a request that fails the tests

Start by asking for the evidence, politely and in writing, with regulation 122 cited. Most disputes end there, either because the evidence exists or because the request is reduced.

If it does not, set out in the planning statement why the obligation fails one or more of the tests, and offer what you accept is justified. Inspectors examine obligations against regulation 122 as a matter of routine and will disregard an obligation that fails, so a documented position is worth having on the file before any appeal.

Where the disagreement is about mode share rather than money, the answer is sometimes a stronger Travel Plan with monitoring, targets and remedial measures rather than a larger cheque. Authorities are often willing to trade one for the other, particularly where the travel plan carries a review mechanism and a named coordinator.

This is general guidance, not legal advice. Check the position with your local planning authority and highway authority, and take professional advice on any section 106 agreement before signing it.

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