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<p>Section 106 obligations are negotiated between developers and local planning authorities,
and can include obligations requiring developers to pay financial contributions. Where
they are used to support the grant of planning permission, section 106 obligations
must comply with regulation 122 of the Community Infrastructure Levy (CIL) Regulations
2010 (as amended), which states that the obligations must be necessary to make the
development acceptable in planning terms, must be directly related to the development,
and must be fairly and reasonably related in scale and kind to the development.</p><p>Section
106 agreements should normally include clauses stating how commuted funds will be
used, and clauses that allow for their return, after an agreed period of time, where
they are not used. Local authorities that receive contributions must publish Infrastructure
Funding Statements annually, which set out what has been received and spent through
developer contributions, providing transparency for communities.</p><p>Under the new
infrastructure levy proposed in the Levelling-Up and Regeneration Bill, levels of
negotiation in the system will be reduced, while retaining a constrained role for
section 106 agreements. Local authorities will be required to produce infrastructure
delivery strategies to illustrate how they intend to spend Levy proceeds in a timely
and effective manner, such that new development is accompanied by the infrastructure
that local communities need - like roads, schools, and GP surgeries.</p>
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