Highway agreement costs: technical approval, bonds and sums
Highway agreements under sections 278 and 38 of the Highways Act 1980 carry four charges beyond the works themselves. Here is how technical approval fees, bonds and commuted sums are calculated and where the programme risk sits.
The cost of a highway agreement is not the cost of the road. On a scheme that needs a new access, a developer pays for the works themselves, plus a technical approval fee, plus a supervision or inspection fee, plus a bond, plus commuted sums for anything the authority will have to maintain in the long term. Budget for the works alone and you will be short by a margin that grows with every non-standard item on the drawings.
Two statutes do the work. Section 278 of the Highways Act 1980 covers works to an existing highway paid for by a developer, typically a new priority junction, a signalised access, a footway widening or a bus stop relocation. Section 38 covers the construction of new streets that the authority will later adopt.
The four charges that sit on top of the works cost
Every highway authority publishes its own scale, and the structure is broadly the same across England.
| Charge | What it buys | How it is usually calculated |
|---|---|---|
| Technical approval fee | Checking of the detailed design, drainage calculations, lighting design and safety audit responses | A percentage of the estimated works cost, or a time charge, taken up front |
| Supervision and inspection fee | Site inspections during construction and at completion | A percentage of the estimated works cost, invoiced with the agreement |
| Bond or surety | The authority's cost of completing the works if the developer fails | Estimated works cost plus an allowance for inflation and the authority's own costs |
| Commuted sums | Future maintenance of items the authority would not otherwise carry | Per item, per unit, against a published maintenance schedule |
Legal fees sit alongside these. The authority's solicitor drafts or reviews the agreement and charges for it, and on a section 38 the title work is more involved because land has to be dedicated as highway.
The percentages differ between authorities and are reviewed periodically. Ask for the current scale in writing at the pre-application stage rather than assuming last year's figure still applies.
How the bond is sized and released
The bond exists so that the authority is not left with a half-built road if the developer stops. It is normally provided by a bank or a surety company, and it costs a percentage of the bonded sum each year to keep in place, which is a real cash cost that people forget when comparing a bond against a cash deposit.
Sizing is based on the authority's own estimate of the works, which can be higher than the developer's contractor price. That is deliberate, because the authority is pricing its own procurement rather than yours. Where the gap is large, ask for the build-up and negotiate on the items rather than the total.
Release usually happens in two stages. A substantial reduction follows the certificate of provisional completion, then the remainder is released at final certificate after the maintenance period, commonly twelve months, during which defects are the developer's responsibility. On a phased scheme, ask whether the bond can be phased too. Carrying a full-scheme bond through a five-year build is expensive.
What commuted sums are charged for
Commuted sums cover the lifetime maintenance of assets the authority did not choose. The usual list includes street lighting columns above a standard specification, structures such as retaining walls and culverts, drainage systems including attenuation features, non-standard surfacing materials, street trees, and traffic signals.
The logic is defensible. A block-paved shared surface with granite kerbs costs more to maintain than an asphalt carriageway, and the residents of the wider borough should not fund the difference. The argument to have is about the specification, not the principle. If the authority will charge a substantial sum for a decorative surface, price both options at design stage and let the client choose with the figures in front of them.
SuDS features are the live issue on most residential schemes. Where the highway authority will not adopt a swale or a permeable pavement, the alternative is a management company, and that has to be reflected in the Drainage Strategy and in the section 106 obligations. Neither route is free, so settle it before the layout is fixed.
Where the fee scale is published
Every county council, unitary authority and London borough publishes a developer services or highway agreements page setting out its fee percentages, bond requirements and commuted sum rates. National Highways publishes its own process for works affecting the strategic road network, and its involvement adds time because it acts as the overseeing organisation for design departures.
Do not rely on a neighbouring authority's figures. The variation between authorities on commuted sums in particular is wide, because each one prices against its own maintenance regime.
Programme risk in technical approval
Technical approval is where highway agreements lose months. The design has to satisfy the authority's standards, the drainage calculations have to be checked, and the safety audit process runs alongside, with a stage 1 audit at design and a stage 2 audit at detailed design, each generating responses that may change the geometry.
A realistic sequence, illustrative only, looks like this:
- Pre-application discussion with the highway authority on the access principle.
- Concept design and stage 1 road safety audit.
- Planning permission granted, usually with a Grampian condition requiring the works before occupation.
- Detailed design, drainage calculations, lighting design, stage 2 audit and responses.
- Technical approval issued and the agreement engrossed and sealed.
- Bond in place, fees paid, works start on site.
Steps four and five routinely take longer than the planning application did. Start them in parallel with the application rather than after it, and be honest with the funder about the gap between permission and a lawful start on the highway.
Where the access is the reason the scheme is controversial, the supporting evidence matters as much as the design. A Transport Assessment that sets out the trip generation, the junction capacity and the accident record gives the highway officer something to agree with, and a Construction Traffic Management Plan settles the separate argument about how lorries reach the site during the build.
Budgeting for departures from standard
A departure from standards is a design that does not meet the authority's normal geometric requirements: a visibility splay short of the recommended value, a substandard forward visibility, a junction spacing that is tight. Departures are not automatically refused, but they need to be applied for, justified with evidence, and approved by the overseeing organisation, and that takes time and consultant hours.
Price departures as a risk item with a probability attached rather than as a line in the base cost. On a site where the frontage is fixed by third-party land, the departure may be unavoidable and the cost of failing to get it is the whole scheme.
Three habits keep highway costs under control. Get the current fee scale in writing early. Price the commuted sums for each surfacing and drainage option before the layout is locked. And run technical approval alongside the planning application, not after it.
For the wider budget picture, see how PlanScope is priced and use the report pages to check which supporting documents your access proposals are likely to need.
This is general guidance, not legal advice. Check the position with your local planning authority, your highway 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.
Frequently asked questions
What is the difference between a section 278 and a section 38 agreement?
Section 278 of the Highways Act 1980 covers works to an existing highway carried out at a developer's expense, such as a new access or a footway widening. Section 38 covers the construction of new streets that the highway authority will later adopt, and involves dedication of land as highway as well as a build to adoptable standard.
How is a highway bond calculated?
The bond is normally based on the authority's own estimate of what it would cost to complete the works, plus an allowance for inflation and its own administrative costs. That estimate is often higher than a developer's contractor price because the authority prices its own procurement. Ask for the build-up and negotiate on the individual items rather than the total.
When is a highway bond released?
Usually in two stages. A substantial reduction follows the certificate of provisional completion, and the remainder is released at final certificate once the maintenance period has expired, commonly twelve months, during which defects remain the developer's responsibility. On phased schemes it is worth asking whether the bond can be phased as well.
What do commuted sums pay for?
They fund the long-term maintenance of assets the authority would not otherwise carry: non-standard surfacing, street lighting above standard specification, structures such as retaining walls and culverts, drainage and attenuation features, street trees and traffic signals. Each authority publishes its own rates and the variation between authorities is wide.
How long does technical approval take?
Longer than most programmes assume. The detailed design, drainage calculations and lighting design all have to be checked, and stage 1 and stage 2 road safety audits generate responses that can change the geometry. Running technical approval in parallel with the planning application, rather than after it, is the single most effective way to protect the programme.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.