Pooling restrictions and clawback in planning obligations
Regulation 123 and the five obligation pooling cap went in September 2019. What remains is the statutory test in regulation 122, the infrastructure funding statement, and careful drafting against duplication.
The five obligation pooling restriction that governed section 106 contributions for nine years was removed on 1 September 2019, when regulation 123 of the Community Infrastructure Levy Regulations 2010 was revoked. Local planning authorities can now pool contributions from any number of permissions towards the same item of infrastructure, whether or not they charge the levy. The constraint that remains is regulation 122, which is the statutory test, and that constraint has teeth.
Consultants who still argue pooling as a point of principle are arguing about a rule that no longer exists. The productive argument is about whether a requested contribution meets the three tests, and whether the authority is charging twice for the same thing.
What the pooling restriction used to prevent
Regulation 123(3) limited an authority to five section 106 obligations entered into since 6 April 2010 for any one infrastructure project or type of infrastructure. The intention was to push authorities towards the levy for cumulative infrastructure and to keep section 106 for site specific mitigation.
In practice it produced strange behaviour. Authorities counted obligations rather than assessing need. Projects were split or relabelled to avoid the cap. Developers checked the regulation 123 list to see whether the sixth contribution could be resisted. And schemes that did need to contribute to a shared piece of infrastructure found the route blocked because four other developers had got there first.
The accompanying regulation 123 list, which authorities published to identify infrastructure they intended to fund through the levy, was also abolished at the same time.
What changed and when
The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 made four changes that matter to anyone drafting or negotiating obligations.
- The pooling restriction in regulation 123 was removed, so contributions can be pooled without limit.
- The regulation 123 list was replaced by an annual infrastructure funding statement, which authorities charging the levy or receiving obligations must publish.
- Monitoring fees were expressly permitted, provided they are proportionate and reasonably related to the monitoring of the obligations over their lifetime.
- The restriction preventing authorities from using section 106 for infrastructure they had identified for levy funding was removed, which puts the burden of avoiding double charging on the statutory tests instead of on a list.
The infrastructure funding statement is the practical gain for applicants. Authorities must publish one by 31 December each year covering the previous financial year, setting out levy and obligation receipts, how much has been spent, on what, and how much remains unallocated. That document is evidence, and it is published, which makes it far more useful in a negotiation than the old list ever was.
Current limits on combining contributions
Regulation 122(2) still requires every obligation to be:
- Necessary to make the development acceptable in planning terms
- Directly related to the development
- Fairly and reasonably related in scale and kind to the development
All three, in every case, for every obligation. An authority that asks for a contribution towards a leisure centre four miles away, on a formula applied to every application in the district, has to show that the obligation is necessary to make this development acceptable and directly related to it. Pooling without limit does not relieve the authority of that burden, and the statutory tests are a matter of law rather than of policy.
Two further limits apply in practice. An obligation cannot be used to remedy an existing deficiency unrelated to the development. And a contribution towards a project with no identified delivery mechanism, no cost estimate and no timescale is vulnerable, because necessity is hard to demonstrate for something that may never be built.
Where contributions and highway works overlap, check which mechanism should carry what, since a highway agreement is usually the right vehicle for works to the public highway. We set that out in section 278, section 38 and section 106, and which secures what.
Interaction with the levy on the same infrastructure
The levy is a charge on floorspace, set by a charging schedule, intended to fund the cumulative infrastructure needs identified in the authority's infrastructure delivery plan. Section 106 is for site specific mitigation. The line between them is now drawn by regulation 122 and by the authority's own reporting rather than by a list.
Double charging happens where an authority takes levy receipts that its evidence base allocates to a school, and then also seeks an education contribution by obligation from the same development for the same school place. That is resistible, and the infrastructure funding statement is where you find the evidence.
Ask three questions of any contribution request on a levy charging authority:
- Does the authority's infrastructure delivery plan or levy evidence base identify this item as levy funded?
- Does the published infrastructure funding statement show levy receipts allocated or spent on this item?
- Is the obligation framed so narrowly that it covers only what the levy demonstrably does not?
If the answers are yes, yes and no, the request is worth challenging in writing before the committee report is drafted.
Double charging and how to spot it
The markers, from most to least obvious:
- The same project named in both the levy spending programme and the obligation heads of terms
- A standard formula contribution applied without any site specific capacity evidence
- A contribution for infrastructure the authority has already secured from another scheme and has not yet spent
- Open space or play contributions sought where the scheme provides the same facilities on site
- Transport contributions duplicating works already delivered under a highway agreement by an adjoining developer
The second of those is the most common and the least examined. Standard formulae are legitimate as a starting point for consistency, and they fail the tests when applied without checking whether the particular service is actually under pressure. Ask for the capacity evidence rather than disputing the arithmetic.
Evidence to request from the authority
A short written request, made early, usually produces more than a long argument later. Ask for:
The current infrastructure funding statement, with the allocation and spend tables. The capacity evidence for each service against which a contribution is sought, from the service provider rather than from the planning department. The cost basis and the index used for the contribution. The intended delivery project and its programme. And the authority's record of what has already been collected and remains unspent for that project.
Where viability is also in play, remember that an obligation surviving the regulation 122 tests can still fall away on viability grounds, and that the two arguments run in parallel rather than in sequence. The assessment itself is set out on the Viability Assessment page, and the way an inspector approaches the question at appeal is covered in when an inspector reopens viability at appeal.
Drafting to avoid duplication
Clawback provisions are where duplication tends to creep back in, because a review mechanism and a fixed contribution can end up charging twice for the same uplift.
Four drafting points worth insisting on.
Define the infrastructure project precisely, with a plan or a scheme reference, so that the obligation cannot be spent on something else and cannot be duplicated by a later request.
Include a repayment provision with a date. If the contribution is not spent on the defined project within a stated period, commonly five or ten years, it returns to the payer with interest.
Cap the review mechanism and state what it captures. Where a late stage review captures surplus above an agreed profit level, say expressly that sums captured are applied in satisfaction of, rather than in addition to, any affordable housing contribution otherwise payable. The mechanics of those reviews are set out in affordable housing review mechanisms in section 106.
Address successor permissions. Obligations do not automatically attach to a permission granted under section 73, so the deed needs to bind future permissions expressly, a point we look at in whether section 106 obligations carry over to a section 73 permission.
One honest uncertainty worth flagging to clients. The Levelling-up and Regeneration Act 2023 contains powers for an Infrastructure Levy that would replace much of this machinery, and those powers have not been brought into force in a way that changes current practice. Advise on the regulations as they stand, and check the position at the point of drafting.
Enter your postcode on PlanScope to draft the supporting statements for an application of this kind, then send them for professional review.
This is general guidance rather than 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.
Frequently asked questions
Is there still a limit on pooling section 106 contributions?
No numerical limit. Regulation 123 of the Community Infrastructure Levy Regulations 2010, which capped pooling at five obligations for one project or type of infrastructure, was revoked with effect from 1 September 2019. Contributions can now be pooled from any number of permissions. Each individual obligation must still satisfy the three statutory tests in regulation 122.
What replaced the regulation 123 list?
The annual infrastructure funding statement. Authorities that charge the levy or receive planning obligations must publish one by 31 December each year covering the previous financial year, reporting receipts, spend, allocations and unspent balances. It is more useful than the old list in a negotiation because it shows what has actually been collected and where it has gone.
Can an authority charge the levy and seek a contribution for the same school?
Only if the obligation still meets the regulation 122 tests and is not duplicating what the levy is funding. Where the authority's evidence base allocates levy income to the same project, a contribution for the same school place is open to challenge. Use the infrastructure funding statement to establish what levy money has been allocated and spent.
Are monitoring fees lawful?
Yes. The 2019 amendment regulations expressly permit a monitoring fee, provided it is proportionate and reasonably related to monitoring the obligations over their lifetime. Authorities should be able to explain how the figure was calculated, and a flat percentage of the total contribution applied without reference to the actual monitoring burden is worth questioning.
Should a contribution include a repayment date?
Yes, and it is standard practice to insist on one. The deed should require unspent sums to be repaid with interest if the contribution has not been applied to the defined project within a stated period, commonly five or ten years. Define the project precisely so the money cannot be redirected and cannot be duplicated by a later request.
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.