Comment

COVID-19: Government advocates flexibility in S106 payments

Released today, the Government's COVID-19 response for the planning system incorporates a recommendation for 'relaxation' of S106 obligations going forward for an unspecified period of time (i.e. whilst the effects of COVID-19 remain felt, or otherwise withdrawn).

The full Community Infrastructure Levy (CIL) and S106 guidance is available here.

The S106 guidance is 'discretionary', rather than returning to the S106BA/BB/BC legislation (as yet), but will undoubtedly be useful for developers re-starting on sites in flexing S106 payment triggers to generate necessary cost savings/deferred payments - in order to avoid further cost escalation beyond the impacts incurred to date as a result of COVID-19.

Importantly, the S106 recommendations do not specify this is limited to SME/medium sized developers (unlike the CIL proposals).

The Government's proposition should also apply where schemes are subject to an application presently and going forward for the foreseeable, with the LPA's 'usual' pre- COVID-19 triggers in S106 Agreements pragmatically adjusted accordingly (subject to agreement of both parties).

Should anyone wish to discuss, or require any viability advice to support such approaches and negotiations with Local Authorities, please contact Matthew Spilsbury. A detailed summary of the full MHCLG update is available here.

13 May 2020