The Use of Section 106 for Highways in Planning
The legal tests for Section 106 highways contributions in planning , and how to challenge a request that overreaches your site.
PLANNING APPLICATIONS
Andrew Ransome
9/6/20265 min read
Why is the council asking for money towards a junction, a bus route, or a road scheme miles from your site? And do they actually have the right to ask for it?
Section 106 of the Town and Country Planning Act 1990 is one of the main mechanisms councils use to secure highways and transport contributions. Understanding the legal tests that govern it matters.
It matters whether you're negotiating an agreement, or challenging one that seems to have overreached.
The three S106 tests, and where they come from
Every planning obligation has to satisfy three statutory tests before it can lawfully be taken into account. These are set out in Regulation 122 of the Community Infrastructure Levy Regulations 2010.
An obligation must be:
Necessary to make the development acceptable in planning terms
Directly related to the development
Fairly and reasonably related in scale and kind to the development
These tests codify principles developed through case law over several decades.
The leading authority remains Tesco Stores Ltd v Secretary of State for the Environment [1995]. This House of Lords decision considered whether a council could lawfully take into account a developer's offer to fund a link road, as part of the case for granting permission for a supermarket.
The House of Lords held that whether an obligation is "necessary" is a matter of planning judgment for the decision-maker. That judgment must be exercised rationally. An obligation with no real planning relationship to the development cannot lawfully be taken into account at all — however generous the offer.
This distinction is the single most important thing to understand about Section 106 negotiations.
You can't simply assert a contribution is unreasonable because you disagree with the underlying policy objective. That's a planning judgment call for the decision-maker.
But you can challenge a contribution with no direct, evidenced connection to your development's actual impact.
What the August 2026 NPPF now says
The current NPPF sets out national policy on conditions and obligations at policy DM6, Use of Planning Conditions and Obligations, within Chapter 3, Decision-Making Policies.
DM6 confirms that planning obligations should only be used where an unacceptable impact cannot be addressed through a planning condition instead.
DM6's wording is more streamlined than the previous NPPF's, and doesn't restate the full three-part test in the policy text itself. That doesn't weaken the tests. They remain a legal requirement under Regulation 122, independent of how the NPPF chooses to summarise them.
Tesco and the Regulation 122 tests are still the starting point for any Section 106 challenge.
What this means for highways contributions specifically
A Section 106 contribution towards a junction improvement, for example, is only lawful where there's a genuine, evidenced relationship between the development's traffic impact and the need for that specific improvement.
This is where a well-prepared Transport Assessment earns its keep.
It should quantify a scheme's likely trip generation, and how that traffic distributes across the local network. That evidence is what a highway authority's request for contributions should be tested against.
A blanket request for a fixed sum per dwelling towards a borough-wide transport strategy is on much shakier ground.
Compare that with a contribution calculated against a scheme's actual, modelled effect on a specific junction or corridor. The latter is far more defensible.
It's also worth separating two things: contributions towards genuinely new or improved infrastructure, and attempts to recover costs for maintaining existing infrastructure unrelated to your development.
The "directly related" and "scale and kind" tests exist precisely to stop Section 106 becoming a general funding mechanism for a highway authority's wider capital programme.
Where a request looks more like general infrastructure funding than a response to a specific, evidenced impact, challenge it directly. Support that challenge with your own transport evidence.
Scale and kind: proportionality in practice
The "fairly and reasonably related in scale and kind" test introduces a proportionality requirement.
This matters for highways contributions in particular, because these are sometimes calculated using formulae that don't scale with the size of a development.
A contribution formula built for a large strategic allocation, applied mechanically to a modest infill scheme, is vulnerable to challenge on proportionality grounds. That's true even where the underlying infrastructure need is genuine.
The question is always whether the specific contribution sought bears a reasonable relationship to the specific development being permitted.
Phasing and pooling restrictions are relevant here too.
Restrictions apply to limit pooling contributions from multiple developments towards a single piece of infrastructure via Section 106, in areas where the Community Infrastructure Levy could otherwise apply.
This exists precisely to stop Section 106 being used as a substitute for a properly adopted CIL charging schedule.
Where a highway authority is pooling contributions from several sites towards one scheme, check whether these restrictions are engaged.
They can give you a further basis to challenge a contribution that might otherwise pass the core Regulation 122 tests.
CIL and Section 106: knowing which pot you're paying into
Section 106 and the Community Infrastructure Levy (CIL) are sometimes conflated in discussions with local authorities. It's worth being clear on how they differ.
CIL is a standardised, non-negotiable charge, calculated by floorspace, intended to fund infrastructure across an area generally.
Section 106 is bespoke to a specific application, and must satisfy the Regulation 122 tests above. It cannot be used to recreate a general infrastructure levy for matters CIL is meant to cover.
For highways specifically, some authorities fund strategic transport infrastructure through their CIL charging schedule.
They reserve Section 106 for genuinely site-specific works — a new access, a signalised junction directly necessitated by a scheme, or a footway improvement serving a development directly.
Where a highway authority seeks both a CIL payment and a Section 106 contribution that appear to fund the same infrastructure, query that overlap directly. It risks breaching the restriction on using Section 106 to fund what CIL is intended to cover.
Negotiating from a position of evidence
A well-prepared Transport Assessment, an robust accessibility evaluation, a properly conducted parking survey, and a clear view of what's genuinely deliverable through conditions all feed into a stronger negotiating position on Section 106 too.
A highway authority's ability to demand a contribution ultimately rests on the same evidence base used to assess safety, accessibility and parking.
Where a Section 106 request appears disconnected from your own evidence of a scheme's actual impact, push back with your own analysis.
Equally, where your own evidence does point to a genuine, specific impact — a junction pushed past capacity, a crossing point seeing materially increased pedestrian demand — engage constructively and early with a proportionate response.
Are you planning a new development?
As a planning consultant, I help landowners and developers work through issues like highways and transport. That means liaising with technical consultants, and holding direct discussions with the council to resolve matters. If a highways contribution seems disconnected from your scheme's actual impact, get in touch for an initial review of your case.
Andrew Ransome MRTPI - Email: andrew@andrewransome.co.uk
About me
Andrew Ransome is a Planning Director and a Chartered Member of the Royal Town Planning Institute (RTPI), with more than two decades of experience in town planning.
He specialises in delivering strategic planning solutions for complex developments across both rural and urban environments, helping clients navigate planning challenges and unlock development opportunities. Connect with Andrew on Linkedin.
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Get in touch for planning advice: Email: andrew@andrewransome.co.uk
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