Pooling restrictions and how obligations are now structured
Section 106 contributions are no longer capped by number and regulation 123 lists have gone. What remains is regulation 122: necessary, directly related, and fairly and reasonably related in scale and kind.
The restriction that stopped a council pooling more than five section 106 contributions towards one infrastructure project or type was lifted on 1 September 2019, by amendment to the Community Infrastructure Levy Regulations 2010. Section 106 pooling contributions are therefore no longer capped by number, and the regulation 123 lists that authorities used to publish are gone, replaced by an annual infrastructure funding statement. What survives, unchanged and more important than ever, is the set of statutory tests each individual obligation must meet.
That is the shift consultants need to hold onto. The arithmetic constraint went. The legal constraint did not, and it is the only thing standing between a scheme and an open-ended request.
The former restriction and why it was removed
Before September 2019, an obligation could not be taken into account in granting permission if five or more obligations had already been entered into for the same project or type of infrastructure since April 2010. The rule was designed to push authorities towards the levy for cumulative infrastructure and to keep section 106 for site-specific mitigation.
In practice it produced careful record-keeping and some odd outcomes. Authorities ran out of slots on a particular school or junction and then could not secure mitigation for a scheme that plainly caused an impact, which left either a refusal or an unmitigated permission. Counting became a discipline in its own right, with disputes about whether two obligations concerned the same project or merely similar ones.
Removing the cap simplified that. It also removed the main structural reason for authorities to adopt the levy, which is part of why the charging landscape outside London has stayed patchy.
How authorities now structure contributions
Three patterns dominate.
Site-specific mitigation secured through the obligation, which is what section 106 was always for: access works, on-site open space, affordable housing, and a financial contribution towards a specific project with a direct link to the development.
Formula-based contributions set out in supplementary guidance, where a per-dwelling or per-bedroom figure is applied to arrive at a sum for education, health, open space or sustainable transport. The formula is a tool for calculating the sum rather than a source of the obligation, and it still has to be justified against the tests for each development.
Levy-funded infrastructure, where the authority charges the levy and funds projects from the pooled receipts, with section 106 reserved for the site-specific residue. Where both operate, the authority has to be clear which infrastructure sits in which pot, and the levy charging schedule and its indexation is the document that tells you.
The statutory tests each obligation must still meet
Regulation 122 of the 2010 Regulations sets three tests. An obligation may only be taken into account in deciding an application if 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.
These are legal requirements rather than guidance. An obligation that fails any of them cannot lawfully be a reason for granting permission, which means a decision that relies on it is vulnerable, and an inspector on appeal will disregard it.
| Test | What it asks | Where it usually fails |
|---|---|---|
| Necessary to make the development acceptable | Would permission be refused without it | Contributions to projects already funded and programmed |
| Directly related to the development | Is there a causal link to this scheme's impacts | Facilities too distant to be used by occupiers |
| Fairly and reasonably related in scale and kind | Is the quantum proportionate to the impact | Formula sums applied without regard to scheme size or type |
The first test does the most work. If the authority cannot articulate what would be unacceptable about the development without the contribution, the contribution is not necessary, whatever the formula says.
Tariff style requirements in supplementary guidance
A standard formula in an adopted supplementary planning document is a legitimate way for an authority to calculate a request and to treat applicants consistently. National guidance supports the use of standard formulas as a guide while warning against applying them inflexibly, which is the sentence to have in front of you in a negotiation.
Inflexibility shows up in recognisable ways. A per-dwelling education contribution applied to a scheme of one-bedroom flats with no realistic child yield. An open space contribution applied where the scheme provides its own on-site open space. A health contribution calculated on a formula with no evidence that the relevant provider has a capacity problem attributable to this development.
Each of those is answered the same way: ask for the evidence linking the request to this scheme's impact, and if it does not exist, say the test of necessity is not met. Put it in writing, early, and copy the officer's response into the file.
Double charging against the levy
Where an authority charges the levy, it should not also seek a section 106 contribution towards infrastructure the levy is intended to fund. The infrastructure funding statement is the document that shows what the levy is being spent on, and it is published annually, so it can be read against any request you receive.
Two practical checks. Look for the project in the authority's levy spending plans and in the statement, and if it appears there, ask why a separate obligation is sought. Then look at whether the obligation and the levy are both being justified by the same capacity evidence, which happens more often than it should.
The wider reform picture adds uncertainty rather than resolving it. The Levelling-up and Regeneration Act 2023 contains powers for a different levy, and those powers had not been brought into force at the time of writing, so verify the current commencement position before advising a client on anything that depends on it.
Evidence that a contribution is necessary
What good evidence looks like, in descending order of weight: a published capacity assessment from the relevant service provider that identifies the deficit and attributes part of it to committed and planned development; an infrastructure delivery plan adopted alongside the local plan with the project named and costed; and a project list in the infrastructure funding statement with a funding gap.
What does not meet the test: a general statement that services are under pressure, a formula with no underlying study, a request for an item already funded, or a contribution expressed as a round sum with no derivation.
Where viability is also in issue, the two arguments interact. A contribution that fails the statutory tests should come out regardless of viability, and it is worth taking that point before conceding anything in a Viability Assessment, because arguing about profit margins is harder than arguing about necessity.
Challenging an unjustified request
- Ask for the evidence in writing, identifying each requested obligation and the test you say it fails.
- Offer the obligations you accept, in draft heads of terms, so the dispute is narrowed to the contested items.
- Put your position on the record before the committee report is drafted, because an officer who has already recommended the contribution is a harder audience.
- If permission is refused or the obligation is imposed as the price of consent, appeal and argue the point to the inspector, who must apply the same tests.
- Where an obligation already entered into no longer serves a useful purpose, the modification and discharge route is separate, and our note on discharging a section 106 obligation that no longer serves sets out how it works.
One honest caveat: winning this argument costs time, and on a small scheme the contested sum is often less than the fee and the delay. Judge it commercially rather than on principle.
This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. To see which supporting documents a scheme is likely to need, enter your postcode on PlanScope.
PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
When was the pooling restriction removed?
On 1 September 2019, by amendment to the Community Infrastructure Levy Regulations 2010. Before that date an obligation could not be taken into account if five or more had already been entered into for the same infrastructure project or type since April 2010. The regulation 123 lists authorities published alongside the cap were removed at the same time.
What replaced the regulation 123 list?
The annual infrastructure funding statement, which authorities receiving planning obligations or charging the levy publish each year. It sets out what has been collected, what has been spent and what is planned. It is the document to read when checking whether a requested contribution duplicates something the levy already funds.
Are the three statutory tests still in force?
Yes. Regulation 122 still requires an obligation to be necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. These are legal requirements, so an obligation failing any of them cannot lawfully be a reason for granting permission.
Can a council apply a standard formula to my scheme?
It can use one to calculate a request and to treat applicants consistently. National guidance supports standard formulas as a guide while warning against inflexible application. A formula applied without regard to the actual scheme, such as an education sum on one-bedroom flats with no realistic child yield, is where the test of necessity breaks down.
How do I check for double charging with the levy?
Look for the project in the authority's levy spending plans and in the published infrastructure funding statement. If it appears there, ask why a separate obligation is being sought. Also check whether the levy and the obligation are both justified by the same capacity evidence, which is a common and answerable overlap.
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.