Council monitoring fees on section 106 agreements

A section 106 monitoring fee is a charge for the officer time a council spends checking that the obligations in an agreement are actually performed, and the power to levy it sits in the Community Infrastructure Levy Regulations. The constraint on it is specific: the fee must be proportionate and reasonable, and it must not exceed the authority's estimate of its cost of monitoring the obligation over the lifetime of that obligation. Any figure an authority proposes should be traceable back to that test.

It is a small line in a development appraisal and a large irritation, mostly because it appears late, after the committee resolution, when the pressure to complete is at its highest and the appetite to argue is at its lowest.

What the fee covers and what it does not

Monitoring is the ongoing work: recording when triggers fall due, chasing notices that should have been served, checking that affordable units were transferred to the registered provider on the agreed terms, receiving and reading travel plan surveys, confirming that a management company has been established, and signing off before a bond is released.

It is not the drafting. Negotiating and completing the agreement is legal work, covered by a separate undertaking to pay the council's legal costs. An authority charging monitoring for the same activity twice should be asked to separate the two.

It is also weak ground for an obligation that requires no supervision at all. A single financial contribution payable on commencement, with the trigger fixed and the amount stated, involves receiving a payment. Where a schedule prices that at the same rate as a fifteen-year affordable housing covenant, ask why.

Legal cost undertakings before drafting starts

Most councils will not instruct their solicitor until an undertaking to pay their legal costs is signed. That is normal practice and not worth fighting.

Read the wording closely. The standard undertaking is usually payable whether or not the agreement completes and whether or not permission is granted, which means an application that falls away still leaves a bill. Ask three questions before signing. What is the estimate. What are the hourly rates and who does the work. Is external counsel or an external firm being instructed, and if so at what rate.

On complex agreements it is often faster and less expensive to offer to prepare the first draft yourself, using the council's own model agreement where one is published. Some authorities accept this and some do not, but the saving where they do is real.

A cap is the other thing to ask for. An undertaking with an agreed ceiling, above which further costs need your written authority, converts an open commitment into a budget line. Most authorities will agree one if it is raised before drafting starts and almost none will agree one afterwards.

How fees are calculated

Practice varies widely and there is no national scale. The approaches you will meet are a fixed sum per obligation, a fixed sum per trigger or per monitoring event, an officer time estimate at a published hourly rate, or a percentage of the total contributions subject to a cap.

The percentage approach is the one most vulnerable to challenge, because a fee scaled to the size of a contribution has no necessary relationship to the cost of monitoring it. Monitoring a two million pound contribution paid in one instalment costs the same as monitoring a fifty thousand pound one.

Where an authority publishes a fee schedule in a section 106 supplementary planning document or on its planning fees page, read it before the resolution stage and price it into the appraisal. Where it does not, ask for the basis in writing at the same time as you ask for the heads of terms.

Challenging a figure that looks disproportionate

Do it early, in writing, and with an alternative on the table.

1. Ask for the calculation: which obligations are being monitored, how many monitoring events each generates, the officer grade and hourly rate, and the period covered.
2. Test each obligation against whether it needs any monitoring at all beyond receipt of a payment.
3. Test the period. A fee covering a thirty year affordable housing covenant is reasonable. The same fee applied to an obligation discharged at first occupation is not.
4. Propose a revised figure with your own working, and offer to agree it as a lump sum payable on completion rather than in instalments.
5. Where the fee is material to viability, say so and support it, because a Viability Assessment that already exists for the affordable housing negotiation can carry the point without extra cost.

Keep the tone practical. Officers are usually applying a scale someone else set, and a specific, evidenced request for a reduction goes further than an argument about principle.

Timing, and why the agreement holds up your decision

A resolution to grant subject to a section 106 is not a permission. The decision notice issues when the agreement completes, and everything in between is programme risk you own.

The parties who must be joined are the usual cause of delay. Every person with a legal interest in the land signs, which means freeholders, leaseholders, mortgagees and sometimes option holders. In a two tier area the county council joins as well for education, highways or libraries obligations, which adds another solicitor and another approval chain to the same document.

Three habits shorten it. Order title documents and identify every interest at the start of the application rather than after the resolution. Ask for draft heads of terms early, so the shape of the agreement is known before officers write their report. And agree an extension of time in writing so that the application does not fall into non-determination while the drafting runs.

Where a scheme is time critical, ask whether a unilateral undertaking is acceptable. It cannot bind the authority to anything, so it only suits agreements that are purely obligations on the developer, but where it fits it removes a party from the signing chain.

Budgeting the whole obligations bill

Set out the full cost in the appraisal rather than the contributions alone.

The contributions themselves, by head of terms. The monitoring fee. Your own legal costs and the council's. Any levy charge, which is separate from the agreement and calculated on chargeable floorspace. The planning application fee under the national regulations, which is indexed and should be checked against the current schedule. And the professional fees for the evidence base that got you to the resolution in the first place.

That last line is often the largest, and it is the one where a first draft prepared in-house makes a measurable difference. You can see what a drafted report costs and check reports a major application needs against your own scheme, then Enter your postcode on PlanScope to see which constraints your site triggers.

The Levelling-up and Regeneration Act 2023 contains powers for an Infrastructure Levy intended to change how contributions are collected. As at the date of writing those powers have not been brought into general effect, so section 106 remains the mechanism. Check the current commencement position before relying on either.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.