What is Section 106 Money & Why It Matters?
- 17 hours ago
- 5 min read
Sounds dull doesn't it? But it is a most brilliant beautiful way to transform towns if only we allow it.
What is the Money For?
When a proposed new development comes to a local council to discuss and allow or deny, they have to consider the impact on local people and what changes will occur as a result. In Cheadle, the town council's opinion matters and carries weight in the decision-making, which is usually made by the district council. This is why local planning applications are considered by the town council first.
Often a larger development, of which Cheadle has seen plenty in recent years, means extra pressure on services, doctors, schools, etc., and more lifestyle space is needed, such as entertainment, shops, eateries, etc. There is also the need to get in and out, especially for work and visiting relatives and so forth; is the public transport sufficient, will the roads cope, etc.? Finally, there are all the other considerations: what about drainage, power, nature, and more.
These are the sorts of considerations the local authority must make that will impact an area immediately. But what about the longer term for residents who settle there, such as college placements for their now little ones, finding work locally, sheltered housing, and even cemetery space? These, too, need careful consideration particularly as they are more difficult to predict.
Now the housing developers just want to sell nice houses, and while the responsibility for building a town doesn't lie with them, any impact their development will make on a town should be carefully considered and negotiated by the savvy town planners and local councillors to make sure that the needs of the growing community are met.
What's Needed to Access the Section 106 Funds?
Creating infrastructure involves a good deal of cost; it requires an excellent level of understanding of what's needed in the area and the tenacity to negotiate those needs in getting everything in place. Get it wrong, and you have a situation like that facing Wigan at the moment (there are others). Wigan council granted planning for large-scale warehouses, which weren't built straight away. They then granted permission for a housing development next door, and when the warehouses did get built, a host of problems emerged, which Wigan council says they followed procedure. Many people across the country are watching this unfold, and Wigan council does not come off well in any of it with residents are suffering as a result.
There are many examples of where councils, including SMDC, have hurt the existing residents, whose rights are protected, and failed to come close to a solution for the issues their decisions created. This can be life-changing stuff with devaluation of property, mental and physical health issues, etc.
Many problems which could have been solved before development starts go unnoticed. For example, it's easy for councils to blame the NHS for lack of doctors' appointments or the education system for overcrowded classrooms. The reality is if planning is done well, then systems such as health and education not only cope but thrive. So when a town council says we can't do anything, it personally makes us grieve for our losses.
Who Pays?
Putting that infrastructure in place isn't cheap, and to offset costs, there is a raft of things available to councils to ensure they are building communities fit for the future. This comes under the National Planning Framework, which includes CIL (Community Infrastructure Levy Regulations) & Section 106 of the Town and Country Planning Act 1990.
A Section 106 (S106) agreement is a legally binding contract between a property developer and a local council. It is designed to make a development acceptable in planning terms that might otherwise be refused. It moves with the land, so if the land is sold to a different developer, the obligation lies with the owner/new developer.
Section 106 money, or "developer contributions," refers to funds legally secured by local authorities from developers to mitigate the infrastructure impacts of new developments. Used for projects like affordable housing, schools, or parks, this funding is also mandated through planning agreements under Section 106 of the Town and Country Planning Act 1990 (as amended).
If the Funds Are Accessible, Why Aren't We Getting What's Needed Locally?
The responsibility for S106 and other development money lies with local councils, made up of ordinary folk who often don't have the experience or skill of a professional town planner or business negotiator. This is where concerned residents, community groups, and local businesses can really help them to understand the needs of local people. This can be done either through objecting to a specific planning application, speaking at a planning or other meeting, writing to your local councillor, and following it through—don't let it slip and don't be fobbed off is our advice.
Additionally, there seems to be a lot of confusion locally about what this money is and who is allowed to know about it. It's not as was recently explained in a local council meeting to new councillors, a "play pot." Don't laugh; this is serious, unbelievable but serious.
Former Chairman of SMDC explaining to New Cheadle Town Councillors what S106 money is.
Our district council would have you believe that the money doesn't have to be spent in the area where the development happens. Whether that's true or not is highly questionable, but it is certainly the equivalent of Johnny's 21st birthday money going towards his brother's new Porsche. Not particularly illegal, just wrong.
Interestingly, the system which is supposed to protect Johnny's birthday money—let's call them mum and dad—are, in this instance, actually paid by the local Porsche dealer, who will love them forever and might give them even more benefits for stealing from their son.
The Background
Some councillors would have the public believe that section 106 money is sensitive and they are not allowed to talk about it. Actually, the reverse is true; the government has instructed councils to be honest and transparent about where this money goes. You can find out more about this in SMDC's Infrastructure funding statements, published here for the last 3 years.
What Can Section 106 Money Be Used For?
Section 106 money can only be used for the things agreeed between the council and the developers to impact losses which would otherwise prevent planning being granted. Where this is going wrong is that councils are not considering properly the needs of a growing town and the future of that town grown up which has devastating consequences if left unchecked and we are already begining to see the impact of this in Cheadle.
This Money can be used for:
affordable housing
green space provision
providing educational facilities
traffic calming measures or road improvements
public transport contributions
NHS contributions
local employment initiatives
In 2019 the Town & Country Planning Act was amendments to remove the regulations restricting pooling more than 5 planning obligations (S106 agreements) towards a single piece of infrastructure, which means more money can be grouped together to help delivery of the needed infrastructure, giving councils greater scope and security of funding.
There are also clear rules on what councils have to report and how they breakdown the use of funds
How is infrastructure defined for reporting developer contributions?
To prevent local authorites from telling us any old nonsense about how they spent the money there are rules on how they catergorise it:
Affordable housing
Education
Primary
Secondary
Post-16
Other
Health
Highways
Transport and travel
Open space and leisure
Community facilities
Digital infrastructure
Green infrastructure
Flood and water management
Economic development
Land
Section 106 monitoring fees
Bonds (held or repaid to developers)
Other
Neighbourhood CIL
Mayoral CIL
Community Infrastructure Levy administration costs
So you see, the S106 money is certainly not a play pot, but if we continue to tell people that it is, we will never get any infrastructure in place. So please educate those who need to know what can be done to secure the future of a beautiful town.
What is Section 106 Money & Why It Matters? Created 19 March 2026
