Tips for Negotiating Section 106 Agreements

Section 106 agreements sit at the heart of many development projects across England, translating planning permissions into tangible community benefits. Whether you represent a developer seeking to deliver a viable project or a local authority working to secure necessary infrastructure, effective negotiation is essential to reaching agreements that work for all parties.

The stakes are high on both sides. Developers need certainty and viability to proceed with confidence, whilst local authorities must ensure developments adequately mitigate their impact on local services and infrastructure. Getting this balance right requires preparation, clarity and a willingness to find common ground.

This guide offers practical negotiation tips for both developers and local authorities, helping each side understand the other's perspective and work towards sustainable agreements that support development whilst protecting community interests.

What makes Section 106 negotiations challenging?

Before exploring specific strategies, it helps to understand why these negotiations can become complex. Section 106 agreements involve multiple stakeholders, from education and healthcare providers to highways authorities and environmental agencies. Each has legitimate needs that must be balanced against development viability.

Financial viability often becomes the central tension. Developers must demonstrate that excessive obligations would render schemes undeliverable, whilst authorities need to ensure developments contribute fairly to infrastructure costs. This dynamic requires both sides to engage with detailed financial appraisals and evidence-based discussions rather than positional bargaining.

Negotiation tips for developers

Start discussions early

Waiting until late in the planning process to engage on Section 106 matters rarely serves developers well. Early dialogue with planning officers and relevant stakeholders allows you to understand expectations, identify potential sticking points and build these costs into your financial planning from the outset.

Pre-application discussions provide an ideal opportunity to explore what obligations might be required. This transparency helps avoid surprises later and demonstrates your commitment to addressing community needs proactively.

Present robust viability evidence

Your financial viability assessment forms the backbone of negotiations. Ensure qualified professionals prepare it, use realistic assumptions and clearly demonstrate how Section 106 contributions impact development viability.

Be prepared to justify every assumption, from build costs to sales values. Local authorities will scrutinise these figures carefully, and any inflated costs or optimistic projections will undermine your negotiating position.

Understand local priorities

Different authorities prioritise different infrastructure needs based on their local plans and evidence base. Research what matters most in your area, whether that is affordable housing, education provision, healthcare facilities or transport improvements.

Demonstrating that you understand these priorities and are willing to contribute meaningfully to them, within viability constraints, shows good faith and can facilitate more productive discussions than simply resisting all obligations.

Keep detailed records

Document every meeting, conversation and agreement throughout the negotiation process. This creates a clear audit trail, prevents misunderstandings and provides evidence if disputes arise later. Note who attended, what was discussed and any commitments made by either party.

This discipline also helps maintain continuity if personnel change on either side during what can be lengthy negotiation periods.

Negotiation tips for local authorities

Base demands on robust evidence

Your negotiating position must rest on solid evidence of infrastructure needs created by the proposed development. Ensure your local plan infrastructure requirements are up to date and that you can demonstrate clear links between the development and the contributions sought.

Vague or unsubstantiated demands weaken your position and may fail legal tests if agreements are challenged. Work with service providers to quantify needs accurately and ensure your calculations follow established methodologies.

Engage constructively with viability discussions

Whilst protecting community interests remains paramount, refusing to engage with genuine viability constraints rarely leads to positive outcomes. If a developer provides credible evidence that your requirements would prevent delivery, work with them to find solutions rather than maintaining rigid positions.

Consider appointing independent viability experts to review developer submissions. This provides objective analysis and can help move discussions forward when positions have become entrenched.

Prioritise your requirements

Not every desirable contribution will be achievable on every development. Work with service providers to identify absolute priorities versus desirable extras. This allows you to negotiate strategically, potentially accepting reduced contributions in some areas to secure adequate provision in others.

Clear prioritisation also helps developers understand where flexibility exists and where your position is fixed, making negotiations more efficient and productive.

Consider timing and phasing

Large developments may deliver over many years. Inflexible demands for upfront contributions can create cash flow problems that genuinely threaten viability. Explore whether phased contributions linked to occupation triggers could meet infrastructure needs whilst supporting deliverability.

This approach recognises commercial realities whilst still securing the community benefits you need. It can be particularly effective for education and healthcare contributions where needs emerge gradually as developments build out.

What happens if negotiations reach a deadlock?

Despite best efforts, some negotiations reach an impasse. When this happens, consider engaging a planning inspector through the appeal process, though this involves delay and cost for all parties.

Alternatively, mediation or expert determination on specific technical issues, particularly viability, can provide a route forward that preserves relationships and avoids formal dispute resolution.

Get Section 106 negotiation support from our experts

Navigating Section 106 negotiations requires detailed knowledge of planning policy, infrastructure needs, development economics and negotiation strategy.

Whether you represent a developer seeking to agree on viable obligations or a local authority working to secure appropriate contributions, our team can provide expert guidance throughout the process.

We understand both perspectives and can help bridge the gap between development viability and community infrastructure needs. For support with your Section 106 negotiations, please complete the form below.