Section 106 monitoring fees

A section 106 monitoring fee is money paid to the local planning authority to cover the cost of checking that the obligations in a planning agreement are actually performed. It is not a planning contribution, it buys no infrastructure, and it is charged in addition to the application fee. Most authorities now ask for one, most publish a scale, and a surprising number of applicants sign the agreement without ever asking how the figure was reached.

What monitoring fees are charged for

An obligation has a life. Affordable housing must be transferred at the right tenure and the right trigger. A travel plan must produce surveys in stated years. A habitat management plan must generate monitoring reports for three decades. Somebody at the council has to read those documents, record compliance and chase the ones that never arrive.

That work is the justification for the fee. It covers officer time on receiving and checking submissions, maintaining the obligations register, issuing compliance notifications, and pursuing default.

It does not cover negotiating the agreement, which is normally charged separately as the authority's legal costs, nor determining the application, which the application fee pays for. Those three charges get conflated in discussion and should be kept apart in the heads of terms.

Whether they meet the statutory tests

Every obligation has to satisfy the three tests in regulation 122 of the Community Infrastructure Levy Regulations 2010: 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.

A monitoring fee sits awkwardly against the first test, because the development would be acceptable whether or not the council monitors. The answer generally given is that the obligations themselves are what make the development acceptable, and monitoring is what makes the obligations effective. Planning Practice Guidance on planning obligations accepts that authorities may seek monitoring fees where they are proportionate and reasonable and relate to the obligations in the agreement.

That is the boundary worth knowing. A fee calculated against the obligations in your agreement is defensible. A flat charge applied to every agreement regardless of what it contains, or a fee that funds general enforcement activity, is on weaker ground.

How councils calculate them

Three approaches dominate, and the one your authority uses determines how much room there is to negotiate.

Several authorities combine them, charging a per-obligation sum with a cap on the total. Ask which basis applies before the heads of terms are agreed, because the structure of the agreement then affects the figure. An agreement drafted as one affordable housing obligation costs less to monitor than the same content split across six clauses.

The commonest surprise is a fee attached to obligations that need no real monitoring. A clause requiring a single payment on implementation is checked once. A per-year charge on it for a fifteen-year agreement is difficult to justify.

Typical published scales and where to find them

Look in three places. The council's planning obligations or section 106 supplementary planning document, the published fees and charges schedule, and any developer contributions guidance adopted alongside the local plan. Where a charge is not published anywhere, that is itself a reasonable point to make.

Scales are usually reviewed annually alongside other council charges. Check the date on the document you are handed, because a scale from an earlier year occasionally appears in a first draft of the heads of terms.

There is genuine variation between authorities, and it is not always explained by the cost of officer time. Some councils treat monitoring as cost recovery and others as a modest contribution towards a wider compliance team. Neither is unlawful in itself, and the published basis is what you can argue against.

Negotiating the figure

Negotiation works better on structure than on principle. Arguing that monitoring fees should not exist is rarely productive with an authority that publishes a scale. Arguing about how the scale applies to your agreement often is.

Four lines usually get somewhere:

1. Consolidate obligations. Fewer, better-drafted clauses reduce a per-obligation fee without reducing what is secured.
2. Match the period to the obligation. A contribution paid on first occupation does not need a fifteen-year monitoring period attached to it.
3. Ask for the calculation in writing, itemised by obligation. Errors in the arithmetic are more common than errors in the policy.
4. Where the scheme is small, ask whether the authority operates a lower band or a cap for minor development. Many do.

On viability-sensitive schemes the fee is part of the total obligation cost and belongs in the appraisal, alongside the contributions themselves. If a Viability Assessment is being prepared, include the monitoring fee rather than leaving it to appear after the appraisal is agreed.

Challenging an unreasonable charge

The practical remedies are limited, which is worth knowing before spending money on the argument.

You can refuse to agree the clause, in which case the authority may refuse permission for want of an agreement, and the fee becomes a matter for the appeal. Inspectors do consider whether individual obligations meet the regulation 122 tests, and an obligation failing those tests cannot be taken into account. An award of costs is theoretically available where an authority has behaved unreasonably, though the sums at stake usually make that disproportionate.

Judicial review exists for a decision taken on an unlawful basis. It is slow and expensive, and for a monitoring fee it is almost never the right answer.

So the realistic strategy is to settle the structure early, at heads of terms, rather than to fight the figure at engrossment when the delay costs more than the fee. Where the authority is slow to respond at all, the deemed refusal appeal is a separate lever, though it does not remove the need for an agreement.

Budgeting for the life of the obligation

Monitoring fees are usually paid up front, on completion of the agreement or on implementation, which makes them a cash flow item rather than a running cost. Check the trigger, because paying on completion of the agreement means paying before you know whether the permission will be implemented.

Two further points belong in the budget. Index-linking applies to most contributions and often to the fee, so the sum payable on implementation may exceed the sum in the draft. And where the agreement is later varied by deed, some authorities charge a further fee for monitoring the varied obligations.

None of this is large money against a scheme of any size. It is, though, the kind of cost that arrives late, unbudgeted, and at the point where the programme has no slack. Agree it at the same time as the obligations themselves, and get the basis in writing.

PlanScope drafts the planning documents that sit behind an obligation package, including the Planning Statement and the technical reports the heads of terms rely on. See pricing for one free report, pay per report, or the Professional tier.

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.