A27 Chichester Bypass Mitigation Supplementary Planning Document - August 2023

Guidance on Procedures

5.1 Where a s106 agreement contains a financial obligation other than for A27 mitigation, applicants are advised to read the Planning Obligations & Affordable Housing SPD (July 2016). The guidance below relates only to those Planning Obligations intended to mitigate the impact of development on the A27 Chichester Bypass.

Section 106 Agreements and Section 278 Agreements

5.2 Under the 2016 SPD, where applicants were required to pay A27 mitigation contributions, the Section 106 Agreements required the applicant to enter into a Section 278 Agreement with National Highways. The s278 Agreement was then used to pay the contribution directly to National Highways. However, this practice has recently changed and Chichester District Council will now be collecting and holding the A27 mitigation contributions on National Highways behalf. Therefore, the A27 mitigation contributions will be secured through Planning Obligations, either through a Section 106 Agreement with the Council or a Unilateral Undertaking by the applicant.

5.3 The funding collected will be passed, either to National Highways or to their nominated delivery partner, at the time that the initial work on the relevant junction improvement works is due to commence. Any interest payments received on the contributions being held by the Council will be put to use for the same purposes as the collected funds.

Trigger Points

5.4 During the s106 negotiation process, trigger points for each Planning Obligation will be agreed upon between the applicant and the Council. There are established trigger points which are suitable for s106 agreements and further guidance on this is provided within the 2016 SPD.

5.5 For the A27 mitigation contributions, there is a need to ensure that sufficient funding is available at the point that it is required. This could be some years before a new junction improvement is due to be completed, due to the long lead-in times required for the design and construction work involved in works on the Strategic Road Network. Therefore, the Council will seek payment of the full contribution prior to the commencement of the development.

5.6 Exceptions may be made for larger development schemes, where development will be phased over a number of years. In such cases a phased payment of A27 mitigation contributions will be negotiated with the applicant.

Monitoring

5.7 The Council starts managing and monitoring each s106 agreement/Unilateral Undertaking from the moment it is signed. This is a complex process and the Council employs a Planning Obligations Monitoring and Implementation Officer dedicated to overseeing this complex programme and ensuring the successful delivery of the Planning Obligations.

5.8 Where the payment of A27 mitigation contributions is phased due to the scale or phasing of a large development, the Council may require a monitoring fee to be paid in addition to the contribution, to cover the costs of monitoring the collection of contributions.

Index-linking Contributions

5.9 Financial contributions will be index-linked in order to allow for the fluctuation of prices between the date the agreement is signed and the date the payment is made. This is calculated based on the indexation adjustment of the relevant index, from the date the s106 agreement is signed to the expected date of payment. The additional amount paid on top of the financial contribution adjusts the contribution in accordance with inflation.

5.10 The method of indexation for the A27 mitigation contributions will be the Tender Price Index of Road Construction (ROADCON) which measures the movement of prices in tenders for road construction contracts in England, Scotland and Wales. This index is published by the Building Cost Information Service (BCIS). In the event that the index shall decrease, the contribution shall not fall below the figure set out in the s106 agreement.

Enforcement of Obligations

5.11 If it is evident that a Planning Obligation is not being complied with, officers will consider instigating enforcement action if other reasonable measures fail to secure payment. Planning Obligations are enforceable by Chichester District Council in the Courts by application for an injunction and for recovery of contributions payable.

Repayment of Contributions

5.12 The mitigation works for the A27Chichester Bypass will not be able to commence until a sufficient quantum of funding has been collected for any given project. This could take multiple years. It is also the case that the implementation of each of the improvement works projects will have a long lead in time, again measured in years. Therefore, any repayment period negotiated through s106 agreements will be expected to be a minimum of 20 years to avoid undermining the process of funding the improvement works.

Development Viability

5.13 The guidance below is reproduced from paragraphs 3.6 to 3.12 of the 2016 SPD for the convenience of applicants.

5.14 In certain circumstances, it may be considered that the viability of a scheme is jeopardised due to site constraints or other factors and that this would justify a reduction in the amount of affordable housing or other planning obligations. It is recommended in such cases that applicants seek pre-application advice from the Local Planning Authority prior to the formal submission of a planning application.

5.15 Viability assessments to be submitted as evidence in negotiations must be capable of independent expert verification carried out by a qualified (RICS) surveyor/valuer. Any abnormal or exceptional development costs should be supported with robust and costed specialist reports and technical data.

5.16 Where viability is affected by large costs associated with bringing a heritage asset back into beneficial use, any enabling development and/or costs of the repairs will need to be supported with robust and costed specialist reports and technical data, sufficient to enable independent expert verification.

5.17 Where required, and at the Council's discretion, independent qualified RICS surveyor/valuers with specialist skills will be appointed by the Council to investigate the whole, or selected elements of submitted viability assessments. Any expenditure incurred by the Council in carrying out external verification of financial viability appraisals and assessing evidence must be reimbursed by the Applicant. Prior to instructing an external report and to ensure value for money and meet due diligence obligations, the Council will either appoint the District Valuer or obtain three cost limited estimates from appropriately qualified valuers/surveyors who are capable of acting on the matter without a conflict of interest, and agree the external expert with the applicant. The applicant will be required to provide a written undertaking to cover the costs before the valuer is appointed. Viability reports will be shared with the applicants.

5.18 Where such reports result in conflicts of opinion necessitating additional work and fees, supplementary undertakings to reimburse the Council will be sought. Any disputes between the Council and the applicant will be referred to an independent arbitrator (in accordance with RICS guidance).

5.19 Financial viability evidence will usually be required to reflect current day values and costs. Where proposals include phases of development that are expected to come forward over a number of years, assessments will be required to take account of projected changes in the value of development, or costs. Appropriate mechanisms may be required within s106 agreements to address the consequences of such changes over time.

5.20 RICS guidance, Financial Viability in Planning 2012^[5] provides more detailed guidance on current approaches to viability assessment in the planning context and appropriate methodologies.