Section 278 or section 38: which highway agreement applies
One agreement alters a road that already exists, the other hands a new one to the highway authority. Most schemes of any size need both, and the bonds are what surprise people.
A section 278 agreement, under the Highways Act 1980, covers works to an existing publicly maintainable highway carried out at a developer's expense: a new junction, a widened carriageway, a signalised crossing, a bus stop relocation. A section 38 agreement covers a road the developer builds on its own land and then offers to the highway authority for adoption, so that it becomes maintainable at public expense. Most residential schemes of any size need both, because the estate road is section 38 and the point where it meets the public road is section 278.
Confusing them costs more than a terminology correction. The agreements have different parties, different security arrangements and different failure modes, and they land on the programme at different points.
Works to an existing highway against new roads for adoption
Start from the boundary of the existing highway.
Anything beyond that boundary, on land the highway authority already maintains, is section 278 territory. The authority remains responsible for the road and consents to works being carried out for the developer's benefit, usually by a contractor working to the authority's specification under its supervision.
Anything inside the site, on land the developer owns, is section 38 territory if the intention is adoption. Build it, get it certified, hand it over. If the intention is to keep the road private and manage it through a management company, no section 38 agreement is needed at all.
| Section 278 | Section 38 | |
|---|---|---|
| Land | Existing public highway | Developer's land, to become highway |
| Purpose | Alter or improve an existing road | Create a new road for adoption |
| Who ends up maintaining | Authority, as before | Authority, after the maintenance period |
| Typical trigger | Access to the site | Estate road serving dwellings |
| Security | Bond or cash deposit | Bond or cash deposit |
The decision to keep roads private is a real option and it is taken more often than it used to be. It saves the adoption process and the commuted sums. It also creates a service charge that a purchaser's solicitor will raise, and it puts long term maintenance on residents. Decide early, because the road design differs.
Who the agreement is with
Both agreements are with the local highway authority, which is the county council in two tier areas, the unitary or borough council elsewhere, and Transport for London for the roads it controls. On or near the strategic road network, National Highways is involved instead or as well.
That is not always the same body as the local planning authority. In a two tier area the district grants permission and the county signs the highway agreements, which means two sets of correspondence and two timetables. Plan for that.
Where statutory undertakers' apparatus sits in the road, separate arrangements follow: a licence for works affecting their plant and a diversion agreement if apparatus has to move. Those run on their own timescales and they are the usual reason a section 278 slips.
Bonds, fees and technical approval
The costs that surprise applicants are rarely the construction costs.
- A design check or technical approval fee, charged as a percentage of the works value or at an hourly rate.
- A supervision or inspection fee, again commonly a percentage.
- A bond or cash surety covering the cost of the authority completing the works if the developer fails, usually set at the full estimated works value plus an allowance.
- Legal fees for both sides.
- Commuted sums on section 38 adoptions, covering future maintenance of items the authority would not otherwise carry, such as street lighting, drainage features, structures or non-standard surfacing.
Commuted sums are the item most often missed at appraisal. An attenuation basin or a permeable surface that the authority will adopt can attract a sum representing decades of maintenance, and the calculation is set out in the authority's own published policy. Ask for that policy before you design the drainage, because a different arrangement may cost less over the life of the scheme.
Technical approval is a design process, not a formality. The authority checks the drawings against its specification, the relevant design standards and its own supplementary requirements. Expect comments and allow time for two or three rounds.
Timing against the planning permission
Highway agreements are normally secured by a planning condition or by an obligation in a section 106 agreement. A Grampian condition preventing commencement, or occupation, until the agreement is completed is the usual mechanism.
Read the trigger carefully, because the difference between "prior to commencement" and "prior to first occupation" is months of programme. A commencement trigger on a section 278 means the agreement, the bond and the technical approval all have to be in place before anything happens on site.
A workable sequence:
- Agree the principle of the access design at pre-application, with the highway authority in the room.
- Submit the planning application with a general arrangement drawing showing the works within the highway boundary.
- Start technical approval as soon as permission looks likely, rather than waiting for the decision notice.
- Complete the agreement and put the bond in place.
- Book road space and traffic management, which on a busy route can itself take weeks.
Road space booking is a genuine constraint on urban schemes. An authority coordinating works across a network may not offer the window you want, and there is no planning route around that.
What happens if adoption is refused
A section 38 road that fails inspection is not adopted, and the maintenance period does not end. The practical consequences fall on the developer and then on the residents: the bond stays in place, the snagging list has to be cleared, and purchasers find their road unadopted at the point of sale.
The recurring causes are construction that departs from the approved detail, drainage that fails a survey, levels that do not match the design, and street lighting installed to the wrong specification. None of those is a planning problem. All of them are avoidable with inspection records kept as the work proceeds.
Where phasing means the road is built in sections, agree with the authority how provisional certificates will be issued phase by phase. Otherwise the whole estate waits for the last plot.
Costs that catch applicants out
Three in particular.
Bond release. The bond is not released when the road is built. It is released, often in stages, after the maintenance period and final certification, which can be a year or more after practical completion. That is working capital tied up.
Statutory undertaker diversions inside a section 278 area. The developer pays, the undertaker sets the programme, and neither the planning authority nor the highway authority can speed it up. A construction traffic management plan that assumes an uninterrupted route can be undone by a single diversion.
Inflation between the estimate and the works. Bonds and commuted sums are usually based on an estimate agreed at the time of the agreement, and a long gap between agreement and construction can mean recalculation.
Set the highway agreements out as a distinct workstream in the programme with their own dates and their own owner. On a scheme of 50 homes they will run for longer than the planning application did. Scope the supporting documents using the report types, and enter your postcode on PlanScope to see which of them a site with a new access is likely to need.
PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. This is general guidance, not legal advice; check the position with your local highway authority or a qualified professional before relying on it.
Frequently asked questions
What is the difference between a section 278 and a section 38 agreement?
Section 278 of the Highways Act 1980 covers works to an existing publicly maintainable highway carried out at a developer's expense, such as a new junction. Section 38 covers a new road built by the developer and offered to the highway authority for adoption. Most residential schemes need both, one for the access and one for the estate road.
Do I have to offer estate roads for adoption?
No. Keeping roads private and managing them through a management company is a legitimate choice that avoids the adoption process and commuted sums. It transfers long term maintenance cost to residents through a service charge, which purchasers' solicitors will raise. Decide before designing, because adoptable and private roads are built to different specifications.
What is a commuted sum on a highway adoption?
A payment covering future maintenance of items the authority would not otherwise carry, such as street lighting, drainage features, structures or non-standard surfacing. The calculation is set out in the highway authority's published policy. Ask for that policy before finalising the drainage design, because a different arrangement can cost less over the life of the scheme.
When is the highway bond released?
Not at practical completion. The bond is normally released in stages after the maintenance period has run and the final certificate has been issued, which can be a year or more after the road is built. Treat it as working capital tied up for that period rather than a cost that clears on handover.
Who signs the highway agreement in a two tier area?
The county council as local highway authority, while the district or borough council determines the planning application. That means two organisations, two timetables and two sets of correspondence on the same scheme. On or near the strategic road network, National Highways will also be involved, which adds a third.
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.