Decision : Closed after initial enquiries
Decision date : 06 Jan 2021
The Ombudsman's final decision:
Summary: We will not investigate Mr B’s complaint about the Council’s handling of a section 106 agreement. This is because there is insufficient justification for us to say Mr B has suffered significant enough injustice to warrant an investigation.
- The complainant, Mr B, complained about the Council’s handling of a section 106 agreement.
The Ombudsman’s role and powers
- 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’. We provide a free service, but must use public money carefully. We may decide not to start or continue with an investigation if we believe:
- it is unlikely we would find fault, or
- the fault has not caused injustice to the person who complained, or
- the injustice is not significant enough to justify our involvement, or
- it is unlikely further investigation will lead to a different outcome. (Local Government Act 1974, section 24A(6), as amended)
How I considered this complaint
- I have considered the information Mr B provided, his comments on my draft decision, the Council’s correspondence with the parish council about this complaint and information the Council publishes online about the relevant planning decisions.
What I found
- Councils may approve planning 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 contract that is legally binding on the parties that sign it.
- In 2013 the Council granted planning permission to developers subject to a section 106 agreement. The developers agreed not to allow occupation of a prescribed number of dwellings on the site until they had paid a recreation contribution. Mr B told us there is play equipment in the area which would have benefitted from an upgrade.
- Mr B complained that the Council failed to invoice the developers for the recreation contribution until two years after they had completed the development. So, he said, the Council broke the legally binding agreement by allowing the developers to avoid the payment they had agreed to make.
- When the Council sought payment of the contribution, the developers then applied to the Council seeking a variation to the original planning permission. The Town and Country Planning Act allows developers to make such applications retrospectively and the Council then had to assess their submission. It was for the Council to decide whether or not to agree the variation.
- In its response to this complaint the Council said it was clear it had insufficient monitoring in place at the time the development reached the trigger point for the section 106 agreement recreation contribution. That was why it failed to send an invoice at that time. Mr B told us the lack of monitoring capacity is not an excuse for the Council’s failure to honour a legally binding contract. The Council said the error came to light following a review of all section 106 obligations. The Council said it was satisfied its current section 106 monitoring arrangements are robust and appropriate.
- After the Council received the developers’ application, it instructed an appropriate independent third party to carry out its own assessment of the scheme. The conclusion reached was that the scheme could not support the recreation contribution. After considering planning policy, guidance, the developers’ submissions, and representations on the variation application, the Council concluded the developers had shown the recreation contribution was not viable. It agreed to the variation. That meant it could not secure payment from the developers.
- Our role is to consider complaints of injustice caused by a council’s administrative fault. If we investigated this complaint and found Mr B had suffered injustice as a result of the Council’s fault, we could call on the Council to provide a remedy for that injustice. In this case, however, there is insufficient justification for us to say Mr B has suffered significant enough injustice to warrant an investigation. That is because it is unlikely the outcome would have been different had the Council sought the recreation contribution at the trigger point. The trigger point was after occupation of the specified number of dwellings. Had the Council sent the invoice sooner, it is likely the developers would still have sought a variation to the section 106 agreement because of unforeseen additional costs it had incurred by that point.
- We will not investigate this complaint. This is because there is insufficient justification for us to say Mr B has suffered significant enough injustice to warrant an investigation.
Investigator’s decision on behalf of the Ombudsman
Investigator's decision on behalf of the Ombudsman