Section 106 monitoring fee or an administration charge
Councils can charge for monitoring planning obligations under a power added to the Town and Country Planning Act 1990 in 2020. The legal costs of drafting the deed are a separate, contractual matter.
A section 106 monitoring fee is a sum a local planning authority requires to cover the cost of checking that the obligations in your agreement are actually performed. It rests on a specific statutory power and it must not exceed the authority's own estimate of what that monitoring will cost. An administration or legal charge is something else entirely: the council's cost of drafting and completing the deed, recovered by contract because you agreed to pay it. Conflating the two is how developers end up paying twice for the same officer time.
The distinction matters at the point of negotiation. One of these charges can be tested against a statutory limit. The other can only be tested against what is reasonable between two parties to an agreement, which is a much softer argument.
What the two charges actually pay for
Monitoring covers the work that happens after permission is granted. Someone has to check that the affordable units were transferred to the registered provider, that the travel plan survey was submitted in year one, that the play space was laid out before the fiftieth occupation, and that the biodiversity management plan is being followed in year twelve. That work is real and it is ongoing, sometimes for thirty years.
Legal and administration charges cover the work that happens before completion. Instructing the council's legal team, marking up heads of terms, chasing title, engrossing the deed, dealing with a mortgagee's consent. This is transactional work with an end point.
If a council's draft agreement asks for a monitoring sum and also asks for an administration fee calculated as a percentage of the total contributions, ask what each one buys. A percentage-based charge is not a cost estimate. It is a proxy, and proxies drift.
The statutory power to charge for monitoring
Before 2020 the position was contested. Councils charged monitoring fees, applicants argued they were unlawful because they did not meet the tests for a planning obligation, and outcomes varied.
Section 19 of the Business and Planning Act 2020 settled it by inserting new subsections into section 106 of the Town and Country Planning Act 1990. The amended section lets an authority require a sum to be paid towards the cost of monitoring and reporting on the performance of obligations in the agreement. Two limits come with the power. The sum must be fair and reasonable in relation to the scale and kind of the development, and it must not exceed the authority's estimate of its own monitoring cost over the life of the obligations.
That second limit is the one to hold on to. It is a cost cap, not a discretion. An authority that cannot show a cost basis is asking for a number it has no power to require.
The Planning Practice Guidance on planning obligations covers monitoring fees and expects them to be proportionate. Councils commonly publish their monitoring approach in a supplementary planning document or a charging protocol, and a published protocol is the first thing to ask for.
Fair and reasonable, and capped by cost
Regulation 122 of the Community Infrastructure Levy Regulations 2010 sets the familiar three tests for a planning obligation: necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. Those tests govern the obligations themselves, the affordable housing, the contributions, the restrictions on use.
Monitoring sums sit alongside that framework under their own statutory wording. So the argument you make about a monitoring fee is not the regulation 122 argument. It is narrower and more practical: how many obligations are there, how long do they run, what does an officer actually do to check each one, and does the figure follow from that arithmetic.
A scheme with four obligations and a five-year horizon should not attract the same monitoring sum as a scheme with twenty-two obligations running to 2056. When it does, the council has applied a flat percentage. Say so.
How councils build the figure
Authorities take different routes to the same place. The three common models are worth recognising on sight.
| Model | How it works | What to probe |
|---|---|---|
| Per obligation | A fixed sum for each monitorable clause, sometimes tiered by complexity | Whether non-monitorable clauses have been counted |
| Officer time | An hourly or daily rate multiplied by an estimated number of checks | The number of checks and the grade of officer assumed |
| Percentage of contributions | A percentage of the financial obligations, often capped | Whether any cost estimate exists at all |
The per-obligation and officer-time models can be interrogated. The percentage model usually cannot, because there is nothing underneath it to interrogate. Where a council uses a percentage with a cap, the cap is often where the real negotiation happens.
One practical point that gets missed. Obligations discharged at a single moment, such as a financial contribution paid on commencement of development, need one check. Obligations with an annual reporting duty need one check a year for as long as the duty runs. Ask for the figure to be split on that basis and the total often falls.
Negotiating the fee before the deed is signed
Raise it early, at heads of terms, and not in the final week before committee. Once the recommendation refers to a monitoring sum of a stated amount, changing it means going back to the report.
A sequence that works:
- Ask for the authority's published monitoring protocol or charging schedule, and the date it was adopted.
- Ask for the calculation applied to your scheme, clause by clause.
- List the clauses you do not accept as monitorable, with a reason for each.
- Where a clause is discharged once, propose a one-off check rather than an annual one.
- Where the total still looks unsupported, ask for the estimate of monitoring cost that the statutory cap requires.
That last request is the one that changes conversations. It is not aggressive and it is not clever. It is the test Parliament wrote into the section.
If you are also arguing about the scale of the obligations themselves, keep the two negotiations separate. A viability assessment or affordable housing statement goes to the substance of what is being asked for. The monitoring sum is a procedural add-on, and mixing them makes both harder to resolve.
Where the sums sit in the agreement
Read the completed deed for three things. First, the trigger: monitoring fees are usually payable on completion of the agreement or on commencement, and the two are not the same date. Second, indexation: many agreements index the monitoring sum along with the contributions, which can matter on a scheme that starts four years after permission. Third, the repayment clause, or its absence.
A repayment or reconciliation clause is uncommon but not unknown. If the obligations are discharged early, or the scheme is never built out beyond phase one, the monitoring work was not done. Asking for a reconciliation mechanism at drafting stage costs nothing and occasionally saves a five-figure sum.
Legal costs are handled elsewhere in the document, usually in a short clause under which the applicant covenants to pay the council's reasonable legal costs of preparing and completing the deed, whether or not it completes. Cap that figure. An uncapped undertaking to pay another party's legal costs is a strange thing to sign.
Putting both into a scheme budget
Treat the monitoring sum as a planning obligation cost and the legal and administration charge as a professional fee, because that is what they are. On an appraisal they behave differently: the monitoring sum is a known figure attached to the section 106 heads of terms, while legal costs are an estimate that moves with how hard the negotiation turns out to be.
For a scheme carrying biodiversity obligations, remember that the thirty-year management and monitoring regime under the Environment Act 2021 is itself a long-running obligation, so it tends to attract a monitoring line of its own. The relationship between biodiversity net gain or ecological impact assessment work and the monitoring you will pay for afterwards is worth mapping before you agree the heads of terms.
And budget for the possibility that you will not win. Plenty of councils hold their published figure, the sum is modest against the contributions, and the programme cost of arguing exceeds the saving. Judgement, not principle.
If your scheme needs a Viability Assessment to support the negotiation, or you are still working out which supporting documents the application requires, the full list of report types by category is the place to start a draft and see what the site is likely to need.
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.
Frequently asked questions
Is a section 106 monitoring fee lawful?
Yes, where it meets the statutory conditions. Section 19 of the Business and Planning Act 2020 amended section 106 of the Town and Country Planning Act 1990 to allow an authority to require a sum towards monitoring and reporting on obligations. The sum must be fair and reasonable relative to the development and must not exceed the authority's estimate of its own monitoring cost.
Can I refuse to pay a monitoring fee?
You can decline to agree one, but the council may then decline to complete the agreement, which blocks the permission. In practice the argument is about the amount and its basis rather than the principle. Ask for the calculation and the published protocol, and challenge clauses that need no monitoring.
Are legal costs and monitoring fees the same thing?
No. Legal or administration charges cover drafting and completing the deed and are recovered because you agreed to pay them. The monitoring fee covers post-permission compliance checking and sits under a statutory power with a cost cap. They should appear as separate clauses with separate figures.
When is a monitoring fee payable?
It depends on the drafting. Common triggers are completion of the agreement or commencement of development, and some deeds split the sum across phases. Check whether the figure is indexed, because on a scheme that starts several years after permission an indexed sum can be materially higher than the one negotiated.
Do monitoring fees apply to unilateral undertakings?
They can. A unilateral undertaking is still a planning obligation under section 106, so the monitoring power is available. In practice authorities are more likely to seek a fee where the obligations are long running, such as affordable housing or biodiversity management, than for a single one-off contribution.
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.