Summary: X complained the Council failed to use its powers to ensure a project aimed at providing a public benefit to the area. The Council accepted there was fault, as it cannot now explain why it did not require improvements to the land as it had once intended. It has also agreed it needs to review its practice and procedure to avoid similar fault in future. We found fault because records were missing from the Council’s planning register. We completed our investigation because the Council agrees to our recommendations.

The complaint

1. The person that complained to us will be referred to as X.
2. X complained the Council failed to deliver a public benefit required under a section 106 agreement.

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The Ombudsman’s role and powers

3. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
4. It is our decision whether to start, and when to end an investigation into something the law allows us to investigate. (Local Government Act 1974, sections 24A(6) and 34B(8), as amended)
5. If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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What I have and have not investigated

6. The original section 106 agreement that was aimed at creating statutory protection for the site X complained about was decided more than nearly two decades ago. Because of the fault I find below, I cannot know why the Council did not protect the site. Because of the passing of time, it is unlikely further investigation by me will result in a clear finding of what happened.
7. We can investigate whether a similar fault might happen again, so this investigation will focus on the Council’s current section 106 processes.

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How I considered this complaint

8. I read the complaint and discussed it with X. I read the Council’s response to the complaint and spoke to an officer. I also interviewed a manager and asked about the Council’s current section 106 decision monitoring practice and policy. I have considered our guidance on remedies published on our website.
9. I gave the Council and X an opportunity to comment on a draft of this decision. I took account of the comments I received before making a final decision.

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What I found

Planning law and guidance

10. Councils should approve planning applications that accord with policies in the local development plan, unless other material planning considerations indicate they should not.
11. Planning considerations include things like:
• access to the highway;
• protection of ecological and heritage assets; and
• the impact on neighbouring amenity.
12. Planning considerations do not include things like:
• views over another’s land;
• the impact of development on property value; and
• private rights and interests in land.
13. Councils may impose planning conditions to make development acceptable in planning terms. Conditions should be necessary, enforceable and reasonable in all other regards.
14. Councils may approve applications, subject to a planning condition requiring the applicant to enter into a separate planning agreement. Council powers and appeal rights relating to these agreements are found in the Town and Country Planning Act 1990. The agreements are usually referred to as ‘section 106’ agreements. The agreements are in the form of a deed, which is a form of contract that is legally binding on the parties that sign it.
15. A party to section 106 agreement can apply to modify or discharge an obligation within it. An application to modify or discharge a section 106 agreement may only be made after five years after the agreement came into force.

What happened

16. The Council approved a planning application on land, and also required completion of a section 106 agreement. Amongst other things, the agreement required the Council to ensure a public benefit for the area was provided. This did not happen.
17. X complained to the Council about its failure to provide the benefit. The Council responded to say it did not know why this had not happened, but as the land was not in its ownership or control, it could not insist that happened now.
18. The Council explained that the section 106 agreement required certain works to be carried out to ‘trigger’ obligations on the land but the records the Council needed to explain what happened were either missing or unclear. The Council accepted it had failed to retain records it was required to keep, and it could not speculate on what the records might have contained. The Council apologised to X for the fault.
19. The Council said it took legal advice and concluded that it did not now have the power to protect the land as it had once intended.
20. I interviewed a manager and asked about the Council’s current practices relating to section 106 monitoring. The officer told me:
• there is an officer who has responsibility for monitoring section 106 agreements relating to financial obligations for developers;
• non-financial obligations and obligations on the Council are dealt with by relevant departments, and responsibility was for individual officers on a case-by-case basis; and
• it would be possible for the section 106 monitoring officer to deal with both financial and non-financial obligations, but any change would need careful consideration, particularly on how monitoring would be funded.
21. I sent a draft of this decision to X and the Council, and their comments are summarised below.

X’s comments on my earlier draft decision

22. In response to an earlier draft of this decision, X said:
• The Council had not observed its legal obligations regarding the section 106 agreement.
• The Ombudsman should require the Council to provide the benefit to the public the section 106 envisaged.
• The Council has not provided any legal authority to justify its current position.
• The section 106 agreement still binds the developer, and the Council should enforce it.
• The Ombudsman could and should recommend the Council redress harm to local residents by insisting it observes its legal obligations under the agreement.

The Council’s comments on my earlier draft decision

23. In response to an earlier draft of this decision, the Council accepted it was at fault, because it should have records to show what had happened but does not. The Council also said:
• In the years since the fault occurred, record keeping procedures have changed dramatically, and records are now digital, and many are available for the public on the Council’s website portal. In the past, paper records could and were sometimes mislaid but the current system makes this much less likely. The Council said it is not aware of any fault resulting in the loss of planning records in the decades since the new system was introduced.
• It has recently carried out a detailed review of how it records and monitors financial obligations in section 106 agreements. For this type of obligation, the Council employs an officer to monitor compliance
24. I interviewed a planning manager about the Council’s section 106 monitoring practice and procedure. The manager said the Council had carried out a thorough review of its section 106 monitoring, which had been checked by the Council’s internal audit team.
25. However, the new system’s focus was primarily on obligations requiring financial payments. As well as a dedicated officer, the new system included comprehensive file notes, a mapping system, and trigger points for monitoring compliance.
26. The manager said:
• The new system was a big improvement on previous arrangements, but it did not cover non-financial obligations, like those in the section 106 agreement in this case.
• There was a system for non-financial obligations, but this did not include trigger points or ongoing monitoring.
• They did not know why non-financial obligations were not included in the recent review or new monitoring system.
27. The manager said the Council had considered our draft decision and had a clear idea what it needed to do to improve its processes. It needed to review its procedure and include non-financial obligations in its policy and practice guidance. The Council would need to decide how compliance monitoring would be delivered, but this might be added to its section 106 monitoring officer’s role.

My findings

The Council should have records to show what happened, but it did not keep them. This is fault.

28. Because of the fault and the passing of time, further investigation by me is unlikely to result in a clear finding of why the Council failed to keep proper records and why it did not use its powers to protect the land.
29. The Council has explained its current processes, but I am not persuaded they are robust enough to ensure the fault I found does not happen again.
30. I will recommend the Council considers its working practices and procedures to ensure the fault is unlikely to happen again.
31. X would like the Ombudsman to do more. X would like us to say the Council:
• still has the power to enforce and it is wrong not to enforce the section 106 agreement; and
• should be required to provide the protection measures it would have insisted from another party to the section 106 agreement.
32. The Council has explained its position to X, and they know the Council has taken legal advice and decided that, because it lacks evidence in documents it should have produced and kept, it cannot enforce the section 106 agreement as it had once intended. X disagrees with the Council’s position, but it is not for the Ombudsman to decide the law here. The Ombudsman is not a court and cannot determine or declare the law.
33. I did not find X was caused a personal injustice that I can remedy. However, the fault I found could happen again and cause injustice to others, so I will recommend a review of practice and procedure to make this less likely.
34. I have considered the Council’s practice and procedure relating to financial obligations in section 106 agreements. I saw no evidence to suggest fault in the way these decisions are made and monitored.
35. This complaint relates to a non-financial obligation, for which the Council has adopted a different approach, so my recommendation will focus on this type of agreement.

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Agreed action

36. To avoid recurrence of the fault I have found, the Council has agreed to:
1. Carry out a review of its record keeping and section 106 monitoring functions for non-financial obligations, to ensure they are effective and fit for purpose. This will happen within three months from the date of our final decision on this complaint.
2. Share the outcome of its review with any changes to practice and procedure with the Council’s oversight and scrutiny committee. This will happen within one month from completion of the review.
37. The Council will provide us with evidence it has complied with the above actions.

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Final decision

I found fault that may happen again and so I have made recommendations that might make this less likely. I completed my investigation because the Council accepted my recommendations.

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Investigator's decision on behalf of the Ombudsman