The Statutory Framework: Section 106A(6) of the TCPA 1990
Planning obligations entered into under Section 106 of the Town and Country Planning Act 1990 are legally enforceable against the original developer and all successors in title. However, planning circumstances, economic viability, and local infrastructure requirements evolve.
Under Section 106A(1), an obligation can be modified or discharged at any time by bilateral agreement between the parties. Where the LPA refuses to negotiate, Section 106A gives the landowner a formal statutory application route (available once 5 years have elapsed, or earlier if agreed), subject to the strict statutory tests in Section 106A(6).
The High Court in R (Garden & Palmer) v First Secretary of State confirmed that 'useful purpose' must be construed as a useful *planning* purpose, judged against modern development plan policies and public benefit.
The Interplay with Regulation 122 of the CIL Regulations 2010
When assessing whether an obligation continues to serve a useful planning purpose, decision-makers must evaluate the obligation against Regulation 122(2) of the Community Infrastructure Levy (CIL) Regulations 2010. By law, a planning obligation may only constitute a reason for granting planning permission if it meets three statutory tests:
(a) Necessary to make the development acceptable in planning terms; (b) Directly related to the development; and (c) Fairly and reasonably related in scale and kind to the development. If demographic changes, school expansions, or road infrastructure already completed mean the obligation is no longer necessary, it fails the statutory test and should be discharged.
| Statutory Test (s.106A(6)) | Statutory Threshold | Standard Evidence Base | Legal Outcome |
|---|---|---|---|
| Sub-section (6)(a): No Useful Purpose | Obligation serves zero useful planning function | Infrastructure built by third party / policy changed | Mandatory Discharge: Obligation extinguished |
| Sub-section (6)(b): Useful Purpose with Modification | Purpose valid but unachievable as drafted | RICS Financial Viability Assessment (FVA) | Modification: Affordable units reduced / tenure flipped |
| Sub-section (6)(c): Continues to Serve Purpose | Obligation remains viable, necessary, and policy-compliant | Council proves ongoing infrastructure deficit | Refusal: Obligation stands unaltered |
Demonstrating Unviability as a Planning Argument
One of the most frequent grounds for seeking a Section 106A modification is economic unviability. Where steep increases in construction costs, interest rates, or abnormal ground remediation render a stalled site commercially unviable, the developer cannot deliver the scheme.
In such circumstances, high affordable housing or financial contribution obligations serve no useful purpose because the scheme remains unbuilt, delivering zero housing and zero public benefit. By submitting an independent Financial Viability Assessment (FVA) compliant with RICS standards, developers can justify modifying the obligation to unlock delivery.