Section 106 monitoring fees and what is reasonable

A section 106 monitoring fee is a sum an authority asks for inside a planning obligation to cover the cost of checking that the obligation is complied with. Since 1 September 2019 the power to charge one has sat in regulation 122(2A) of the Community Infrastructure Levy Regulations 2010, and the same provision sets the ceiling: the sum must not exceed the authority's estimate of its cost of monitoring the development over the lifetime of the obligation, and it must be of a reasonable scale having regard to the development. Those two words, estimate and reasonable, are where the negotiation happens on every major scheme.

Where the power comes from

Before the 2019 amendment, monitoring fees sat in a grey area. Authorities charged them, applicants paid them, and the legal basis was argued about rather than settled. The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 changed that by inserting regulation 122(2A) and (2B), which permit an obligation to provide for the payment of a monitoring fee and then constrain what that fee can be.

The constraint has two limbs. The sum must not exceed the authority's estimate of its own cost of monitoring the development over the lifetime of the obligation. And the fee must be of a reasonable scale having regard to the scale and kind of the development. An authority that cannot show a costing behind the figure is in difficulty on the first limb, whatever it says about the second.

Planning Practice Guidance on planning obligations puts the same point in plainer words: monitoring fees should be proportionate, should reflect the actual cost of monitoring, and should not be used to fund the wider running of the planning service.

How authorities build the number

Most authorities that publish a methodology do one of three things. Some price each obligation individually by estimating officer time per trigger, which is the approach that survives scrutiny best because it produces a schedule you can argue with line by line. Some apply a fixed sum per obligation, often with a cap on the total. Some apply a percentage of the value of the financial contributions secured, which is the method most likely to produce a figure that has no relationship to any monitoring actually done.

The percentage approach is the weak one. A scheme with a single large education contribution paid on first occupation costs almost nothing to monitor, while a scheme with a dozen small triggers spread over 15 years costs a great deal. Charging the first and not the second gets the position backwards. If the council has applied a percentage, ask for the estimate of monitoring cost that regulation 122(2A) requires, because the percentage is not itself an estimate of anything.

Testing the fee against the statutory tests

Regulation 122(2) still applies to the obligation as a whole. An obligation may only be a reason for granting permission where 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. A monitoring fee attached to an obligation that fails those tests falls with it.

The more useful question on a live negotiation is narrower. For each obligation in the draft deed, ask what the council will actually do to monitor it, how often, and at what officer grade. A covenant to submit a travel plan review every 12 months for five years has a real cost. A covenant to pay a commuted sum on implementation has almost none once the money is banked. The schedule that comes back from that exercise is usually shorter than the one the council opened with. The approach is the same one you would take when the section 278 highway works cost is built up line by line rather than accepted as a lump.

Challenging a fee you think is excessive

There is no appeal against a monitoring fee as such. What there is, in practice, are four routes.

1. Ask for the calculation in writing, citing regulation 122(2A), and ask specifically for the estimate of cost over the lifetime of the obligation.
2. Compare the fee with the authority's own published methodology or supplementary planning document, if it has one, and point out any departure from it.
3. Offer an alternative structure: a lower fee with a mechanism for the authority to recover further reasonable costs if monitoring turns out to be heavier than estimated.
4. Where the fee is a condition of the officer recommendation and the sum is disputed, raise it in the committee report stage rather than after resolution, because the deed is drafted to match the resolution.

Refusing to pay and appealing against non-determination is available, but the cost and delay of an appeal almost always exceeds the fee in dispute. That asymmetry is well understood on both sides of the table, which is why the argument is usually settled by correspondence.

Recording the fee in the deed

Get three things into the drafting. The fee should be a defined sum, payable on a stated trigger, rather than an open-ended indemnity for the council's costs. The deed should say what the fee covers, so the authority cannot later charge separately for the same work. And there should be a repayment or abatement provision if the permission is not implemented, because monitoring a development that never happens costs nothing.

Indexation is the other point worth watching. A fee indexed from the date of the deed to the date of payment is normal. A fee indexed and also reviewed periodically is double counting.

Budgeting for it on a major scheme

Treat the monitoring fee as part of the obligations line in the appraisal, not as a professional fee. On a scheme carrying affordable housing, education, open space, travel plan and biodiversity obligations, the fee will usually be the smallest item in that line and the one most likely to be forgotten until the deed is being engrossed. Put a placeholder in at the pre-application stage and refine it once the heads of terms are agreed.

It sits alongside the other cash calls that land between resolution and commencement, including the CIL liability calculated from the charging schedule and the commuted sum negotiated on a section 38 adoption. None of those three is a planning application fee, and all three are easy to miss in a first-pass appraisal.

For the application itself, the supporting documents are a separate budget line again. You can browse the 66 report types by category to see what a major scheme is likely to need, and PlanScope pricing sets out the free report, the £50 per report option and the Professional tier for agents producing several at once.

This is general guidance, not legal advice, and you should 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.