Section 278 works and section 38 adoption compared

The section 278 section 38 difference is simple to state and expensive to get wrong. A section 278 agreement under the Highways Act 1980 covers works to the existing public highway that a development makes necessary, such as a new junction, a widened bellmouth, a signalised crossing or a dropped kerb. A section 38 agreement covers the adoption of new streets you have built inside the site, so that the highway authority takes them on as highway maintainable at public expense. One deals with somebody else's road. The other hands over yours.

Most residential schemes of any size need both, and they run on separate timetables with separate fees, separate bonds and separate technical approval processes.

What each agreement does and who promotes it

Under a section 278 agreement the highway authority remains the highway authority throughout. You are paying for, and usually carrying out, works in land that is already public highway, to a design the authority has approved. The works vest in the authority as soon as they are complete.

Under a section 38 agreement you build a street on your own land to the authority's specification, maintain it for a defined period, and then the authority adopts it. Until adoption the street is private and you carry the liability, including for anyone who trips on it.

Both agreements are promoted by the developer and entered into with the local highway authority. Where the works touch a motorway or trunk road, National Highways takes the authority's role and its own approach to development traffic applies, which in practice means an earlier and more formal engagement than a county council requires.

Works to the existing highway against new streets

The practical distinction that matters on site is who is inconvenienced. Section 278 works happen in live traffic, which brings traffic management, temporary signals, night working, lane rentals in some authorities and a public who will complain. Section 38 works happen behind a hoarding, at your own pace, and the main constraint is the sequence of plot occupations.

That difference drives the risk. A section 278 programme can slip because the authority will not release a road space booking, because a statutory undertaker has apparatus in the wrong place, or because a safety audit recommends a change late. A section 38 programme slips mostly because of your own contractor.

Statutory undertaker diversions deserve a line of their own. Apparatus in the footway or carriageway has to be located, protected or moved, and the process under the New Roads and Street Works Act 1991 moves through budget estimates to detailed design and then to a programmed slot that the undertaker controls. Ask for the estimates at the earliest sensible point, because they are frequently the largest single item in a section 278 cost plan and they are not within your gift to accelerate.

Technical approval and the design process

Both agreements require the authority to approve a detailed design, not the drawing that supported the planning application. Expect a submission of general arrangement drawings, construction details, drainage design with calculations, lighting design, signing and lining, and a safety file.

Section 278 works also go through road safety audit at defined stages, with the designer responding formally to each recommendation. Where a structure is involved, such as a retaining wall to a widened carriageway, an approval in principle document comes first and the structural design follows the relevant highway standards. Road safety audits and approval in principle documents are prepared by specialists and are not outputs PlanScope produces.

Fees are charged for checking the design and for supervising the works, usually as a percentage of the works value under the authority's published schedule. Get that schedule before you build the budget, because the percentages vary between authorities and some charge separately for each review round.

Bonds, inspection fees and commuted sums

Financial security sits behind both agreements. The authority sets a bond, or takes a cash deposit, sized on its own estimate of what it would cost to finish the works if you stopped. That estimate is usually above your contractor's price, and the bond is released only after the works are certified.

Commuted sums are the item developers forget. Where the authority is being asked to adopt something it does not normally maintain, it will ask for a capital payment reflecting the extra lifetime cost. Block paving instead of bituminous surfacing, street trees in the highway, non-standard lighting columns, a pumped drainage system, a structure: each can attract a sum. Design decisions made for good placemaking reasons therefore carry a cost that lands at the agreement stage rather than at planning.

Three costs to put in the appraisal early:

1. The bond premium, which is a real cost even when the bond is never called.
2. Authority checking and supervision fees, at the published percentage of works value.
3. Commuted sums for any non-standard material or feature you have shown on the planning drawings.

Those items are frequently treated as abnormals in a viability case, and how they are presented matters, as set out in the discussion of abnormal costs in a planning viability appraisal.

Programme risk and the effect on conditions

Planning permission almost always ties the highway works to the development through conditions. A typical wording requires the access to be constructed in accordance with approved details before the development is first occupied, or before any other works begin where the access is also the construction route.

The awkward case is a condition requiring works to be completed before any development starts, when the section 278 agreement itself takes months to negotiate. Ask for wording that requires the agreement to be entered into before work starts, and the works to be completed before first occupation. Authorities accept that split routinely because it protects the same interest without stopping the site.

Interaction with a Grampian condition

Where the works are on land you do not control, a negative or Grampian condition is the usual device: no development until the off-site works have been completed. National guidance on planning conditions accepts this approach where there is a reasonable prospect of the works being carried out within the life of the permission.

Two points follow. First, a Grampian condition is not a substitute for a section 278 agreement, it is the reason you need one. Second, if there is no reasonable prospect of the works happening, because a third party will not sell the land and the authority will not use its powers, the condition is unlawful and the application should be refused instead. Better to find that out at pre-application than at appeal.

Budgeting for both on the same scheme

A scheme with a new estate road and a new junction needs two cost lines, two sets of fees, two bonds and two design teams talking to each other. The junction design fixes the internal street levels at the site entrance, and the internal drainage outfall often has to pass through the section 278 works, so sequencing them separately creates a clash at the one point where both agreements meet.

Ask the highway authority four questions in writing before the appraisal is fixed: which of the internal streets it will consider adopting, the current checking and supervision fee percentages, whether it takes commuted sums for the materials shown on your drawings, and how long its technical approval process is running. The answers are more useful than any national guidance on the subject, and they arrive free.

Transport evidence to support the application itself, including the Transport Assessment and the Construction Traffic Management Plan that sits alongside it, is separate work again, and the cost case for the whole package usually appears in the Viability Assessment.

Enter your postcode on PlanScope to see which transport and highways reports your scheme is likely to need.

This article is general guidance, not legal advice. Fees, bond practice and adoption standards are set by each highway authority, so check the position with that 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.