A Supreme Court decision in late October 2017 raises an
important issue: can a developer lawfully be required under a s106
agreement to pay into a pooled fund for infrastructure where the
development has little or no impact on the need for that
infrastructure? The clear answer given by the Supreme Court is:
no.
In light of the case local planning authorities will
need to think carefully about how they apply local plan policies
requiring financial contributions. Developers would be well-advised
to carefully review with their legal advisers heads of terms for a
proposed s106 planning obligation in light of this
judgement.
The facts of the case
In Aberdeen City and Shire Strategic Development Planning
Authority (the "Authority") v Elsick Development
Company Limited (the "Developer") the Authority
sought major investment in transport infrastructure through
planning obligations associated with the Developer's scheme to
build approximately 4,000 houses together with
