Regulation 122 and what a planning obligation must satisfy

Regulation 122(2) of the Community Infrastructure Levy Regulations 2010 says that a planning obligation may only constitute a reason for granting planning permission 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 the development. All three, not two of three. The tests are statutory rather than policy, which means an obligation that fails one cannot lawfully be taken into account in granting permission, however keen either side is on it.

Most contributions requested by councils satisfy all three comfortably. The ones that do not tend to fail the same way each time, and knowing the pattern saves a lot of correspondence.

Where the tests come from and what changed

The tests began life as policy in a circular, were put on a statutory footing by the 2010 Regulations, and are restated in national planning policy so that decision makers apply them as policy as well.

One change matters and is still being missed. The pooling restriction in the original regulations, which stopped an authority taking more than five obligations towards a single infrastructure project, was removed by amendments in 2019. Advice written before then about counting existing contributions is out of date. Authorities can pool freely now, subject to each obligation meeting the three tests and to transparency through their annual infrastructure funding statements.

The courts have also confirmed the limits of what can be sought. The Supreme Court has held that a contribution towards infrastructure with no sufficient connection to the development cannot lawfully be required, and that an unrelated community benefit offered by a developer is not a material consideration. Both propositions come back to the same idea. A planning obligation is a means of making a development acceptable, and it is not a way of buying permission or funding general local spending.

Necessary to make the development acceptable

The first test asks whether, without the obligation, the development would be unacceptable in planning terms.

That is a real question with a real answer, and it should be answered by reference to the harm. A scheme that generates 25 primary school pupils in an area with no spare places creates a harm, and an education contribution addresses it. A scheme of nine flats in a town centre with surplus school capacity does not, and an education contribution requested anyway fails the first test.

Two checks are useful. Ask what the reason for refusal would say if the obligation were not offered. If nobody can draft one, the obligation is probably not necessary. Then ask whether the same outcome could be achieved by a planning condition, because national guidance prefers conditions to obligations where a condition can do the job.

Affordable housing is the usual exception to that logic, since it is required by local plan policy as part of an acceptable scheme rather than as mitigation of a harm. Where viability is argued, the Affordable Housing Statement and the Viability Assessment have to be read together.

Directly related to the development

The second test is about connection. The obligation must address something that this development causes or needs, at a place and in a way the occupiers of this development will actually use.

Distance is the usual battleground. A play space contribution towards a park two miles away, with no route to it, is harder to justify than one towards the playground at the end of the street. Timing matters too: a contribution towards a facility that will be delivered after the development is occupied can still be directly related, but a contribution to a project with no programme and no site is not.

This is where a request for detail changes the conversation. Ask which project the money funds, where it is, what it costs, when it will be delivered and what proportion of it the requested sum represents. Authorities with a properly maintained infrastructure delivery plan answer that in a paragraph. Those without take longer, and the answer often arrives with the contribution already reduced.

Fairly and reasonably related in scale and kind

The third test is the one that fails most often, and it is arithmetic as much as principle.

Scale means the contribution should reflect what this development generates. If a formula produces a sum by multiplying a per-dwelling figure by the number of units, check whether the per-dwelling figure comes from an evidence base that is current, whether it distinguishes between dwelling sizes, and whether the calculation counts existing units being replaced. A 12-unit scheme on a site with four existing dwellings generates the impact of eight, not twelve.

Kind means the contribution should address the same sort of need the development creates. Money for sports pitches from a retirement housing scheme with an age restriction is the classic example of a request failing on kind rather than on scale.

An illustrative example. A scheme of 15 houses attracted a request based on a standard charge per dwelling for outdoor sport, open space and allotments. The applicant asked for the evidence. The open space element was supported by an up-to-date assessment showing a local deficiency. The allotment element was a flat per-unit figure with no evidence of demand or of a site. The allotment contribution was withdrawn before the report went to committee. That pattern, where part of a package survives scrutiny and part does not, is common in open space and play space contributions on small schemes.

The evidence councils rely on

Authorities justify contributions through a layered evidence base, and knowing what to ask for is half the work.

• The adopted local plan policy that requires the contribution
• A supplementary planning document setting out the methodology and rates
• A background study establishing need, such as an open space assessment or a school place forecast
• An infrastructure delivery plan identifying the project and its cost
• The calculation applied to this particular scheme

The strongest position for a council is all five, current and published. The weakest is a rate carried forward from a document adopted a decade ago, applied without reference to the scheme in front of it. Supplementary planning documents carry weight as material considerations, and they cannot create policy requirements that the development plan does not support.

Recording the tests in the decision

Officers must record their regulation 122 assessment, normally in a short section of the committee or delegated report dealing with each obligation in turn.

Read that section when it appears. It tells you whether the authority has actually applied the tests or restated them. A report that lists the obligations and asserts that they meet the tests, without engaging with the specific harm, the specific project and the specific calculation, is vulnerable, and pointing this out politely before the decision is more useful than pointing it out afterwards.

For an applicant, the practical sequence is: ask for the evidence early, respond in writing on each test separately, accept the contributions that plainly qualify, and reserve the argument for the ones that do not. Officers have limited appetite for defending a weak request, and a targeted challenge with the authority's own documents attached usually resolves it before the heads of terms are drafted.

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, start with a postcode on PlanScope.

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