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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteNew towns are paid for through a blended funding stack, not a single developer charge. In England, the main planning contributions are negotiated Section 106 obligations and, where the council has adopted one, the formula-based Community Infrastructure Levy (CIL). Public bodies may also need grants, land-assembly finance and borrowing to bridge the gap between early infrastructure spending and later development receipts. Section 106 can secure affordable housing and works tied to a particular scheme; CIL raises money for wider infrastructure across an area but cannot deliver affordable homes.
The basic funding model
A new town needs infrastructure before, or alongside, thousands of homes: roads and junctions, schools, public transport, drainage, utilities, parks, health facilities and community buildings. Housing sales and commercial development generate value over many years, while a school, strategic road or utility connection may have to be designed and funded at the beginning. That timing mismatch is why a new town normally combines several sources of finance.
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- Section 106 planning obligations: negotiated, legally binding commitments attached to a specific planning permission.
- Community Infrastructure Levy: a fixed, formula-based charge on chargeable development where the local planning authority has adopted a CIL charging schedule.
- Public finance: grants, land assembly finance and borrowing can fund or advance infrastructure when contribution receipts arrive later. The need for this bridge funding follows from normal new-town phasing; the exact package is scheme-specific.
- Developer delivery in kind: a developer may build a road, school site, open-space facility or other item instead of paying all of its obligation in cash.
There is no universal “new-town funding formula”. The binding answer for a particular project is found in its development agreement, planning permissions, Section 106 agreements, CIL charging schedule, viability evidence, infrastructure delivery plan and public funding documents.
Section 106: negotiated obligations for a particular development
What a Section 106 agreement does
Section 106 (S106) obligations are negotiated between the local planning authority and the developer. They mitigate the impacts of a defined development and can require affordable housing, transport works, school contributions, open space, public-realm works, ecological measures or land transfers. The agreement can set out cash payments, in-kind works, the land to be transferred, construction standards and the point in the build-out at which each obligation is triggered.
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For a new town, that specificity allows one agreement or a package of agreements to follow the masterplan. A first phase might trigger a junction improvement and a primary-school site; later phases might trigger additional classrooms, a bus route or a secondary school. The precise triggers, indexation, expenditure deadlines and repayment provisions must be read from the signed agreement rather than assumed from the outline planning consent.
The legal tests
An S106 obligation must be:
- necessary to make the development acceptable in planning terms;
- directly related to the development; and
- fairly and reasonably related in scale and kind to the development.
These tests prevent a council from using one permission as an unlimited funding source for unrelated projects. They also explain why negotiations need a clear impact assessment: the authority must connect each requested item to the development and justify its scale.
Affordable housing and viability
Affordable housing is a central S106 function. The agreement can specify the number or proportion of affordable homes, tenure mix, standards, delivery phases and transfer arrangements. Viability evidence may affect the amount that a scheme can support. If market conditions or abnormal costs make an agreed package unworkable, the obligation may be renegotiated under the rules that apply to the permission and the local plan. A reader should check the actual viability assessment, review mechanism and current policy rather than treating an outline target as a guaranteed delivery figure.
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Community Infrastructure Levy: a formula-based charge
How CIL differs from S106
The Community Infrastructure Levy is a fixed charge levied on new development to fund infrastructure. The amount is calculated under the charging authority’s published schedule and the development’s chargeable area and use, subject to the exemptions, reliefs and payment rules in force locally. Unlike S106, it is not normally negotiated item by item for each permission.
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CIL is intended to address the cumulative effects of growth across an area. Receipts can support strategic transport, schools, health capacity, parks or other infrastructure identified in the authority’s evidence base. The charging schedule, instalment policy and annual infrastructure funding statement show how the authority has set and administered the charge.
What CIL cannot pay for
Only planning obligations agreed in Section 106 agreements can be used to deliver affordable homes; developer contributions collected through CIL cannot be used for that purpose. A new town can therefore have both CIL liability and S106 affordable-housing requirements, but the two mechanisms should not be treated as interchangeable.
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The authority must apply the legal limits on pooling and avoid double counting. In practical terms, a council should not charge CIL for an item and then seek the same infrastructure cost again through multiple S106 obligations. The interaction depends on the law, the charging schedule and the wording of each agreement at the time the permission is granted. Obtain the current local documents before calculating a project’s exposure.
Who pays for roads, schools and other facilities?
| Infrastructure need | Typical contribution route | What determines the final commitment |
|---|---|---|
| Site-access roads, junctions and mitigation works | S106 cash or developer-built works; sometimes wider strategic funding through CIL | Transport assessment, planning conditions, S106 triggers and the authority’s infrastructure programme |
| Primary or secondary school capacity | S106 education contribution, school land transfer or works; CIL may support area-wide projects | Projected pupil yield, existing capacity, education authority requirements and phase triggers |
| Affordable homes | S106 only | Local-plan policy, negotiated tenure and mix, viability evidence and delivery provisions |
| Parks, open space and community facilities | S106 site-specific provision and/or CIL for broader infrastructure | Open-space standards, masterplan obligations, charging schedule and maintenance arrangements |
| Utilities and drainage | Developer works, utility-company investment, S106 mitigation and public borrowing where applicable | Network capacity, statutory undertaker requirements, consent conditions and phasing |
The table describes common routes, not an automatic allocation. A new town’s legal documents may assign responsibility differently, and a facility can have several funding sources.
How money and works are phased through a new town
- Evidence and viability: the authority identifies infrastructure needs, tests development capacity and establishes the policy and financial assumptions for the plan.
- Planning permission and agreements: the permission records conditions; the S106 agreement records negotiated obligations, triggers, land transfers and payment terms; the CIL liability is calculated under the adopted charging schedule.
- Early enabling infrastructure: a council, development corporation or other public body may use grants, land receipts or borrowing to start a road, utility connection or school before sufficient private receipts have accumulated.
- Commencement and instalments: the developer serves the required notices, pays CIL according to the authority’s instalment policy and meets S106 triggers as phases commence or reach defined occupation thresholds.
- Delivery and verification: the authority monitors payments, construction, land transfers and occupation. The agreement may require certificates, programmes, bonds or other security before a phase proceeds.
- Spending and reporting: receipts are applied to eligible infrastructure and recorded in the authority’s infrastructure funding statement. Unspent or repayable sums are handled under the relevant agreement and regulations.
Timing is as important as the headline amount. A £10 million obligation payable only after later occupation cannot fund a junction needed to unlock the first homes unless another source covers the interim period.
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Accountability: how to check whether contributions became infrastructure
Local authorities that receive S106 or CIL money must publish an infrastructure funding statement at least annually. It records development details, the infrastructure categories supported, contributions received and what has been spent or transferred. Statements can reveal whether money is held, allocated, spent, transferred to another body or subject to a repayment clause.
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For a selected new town, review these documents in sequence:
- the latest infrastructure funding statement and earlier statements covering the relevant permissions;
- each signed S106 agreement, including schedules, variation deeds and trigger dates;
- the CIL charging schedule, instalment policy, relief decisions and collection records where published;
- the infrastructure delivery plan or capital programme identifying the project, cost and expected funding source;
- the development agreement, land-assembly documents and public grant or borrowing approvals; and
- viability assessments and review outcomes where the affordable-housing or infrastructure package changed.
This paper trail separates a promise in a planning document from a payment received and from a facility that has actually opened.
S106 and CIL compared for new-town delivery
| Decision axis | Section 106 | Community Infrastructure Levy |
|---|---|---|
| Certainty and timing | Specific triggers, phases and in-kind works can be negotiated, but payment may depend on a development event. | Formula-based liability is more predictable once the schedule and chargeable area are known; collection still follows commencement and payment rules. |
| Type of infrastructure | Best suited to impacts directly related to the particular scheme. | Designed for cumulative, area-wide infrastructure needs. |
| Affordable housing | Can secure affordable homes and related land or cash obligations. | Cannot deliver affordable homes. |
| Viability and finance | Negotiation and review can respond to viability, but uncertainty can complicate land and lending decisions. | Published rates improve transparency, while the fixed liability must be modelled in the appraisal. |
| Transparency | Obligations are traceable through agreements and annual infrastructure funding statements. | Receipts and spending are reported through infrastructure funding statements and charging documents. |
| Policy volatility | Terms depend on current planning policy and agreement law. | Rates and operation depend on the adopted schedule and any national reforms. |
What the national figures do—and do not—tell you
In a 2019 report covering 2018/19, the UK Government said Section 106 planning obligations negotiated with developers were worth £7 billion in total. It said £4.7 billion of that amount was affordable-housing contributions supporting delivery of 30,000 affordable homes. Those are historical national figures for 2018/19, not a current annual total and not a forecast for any individual new town. They demonstrate the scale of the mechanism, but a project appraisal must use its own agreements, rates, unit numbers and delivery dates.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Public funding and the early-infrastructure gap
Developer contributions do not remove the need for public investment. A public authority may assemble land, borrow against future income, or obtain a grant to build infrastructure before S106 and CIL receipts arrive. That arrangement can unlock development, but it creates exposure to sales rates, build-out delays, inflation and changes in viability. The financing documents should identify who carries each risk, what security protects the public lender and how later contributions repay or support the initial investment.
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Government funding programmes can supplement a scheme; they do not abolish the principle that developers contribute through planning obligations and, where applicable, CIL. The proportions vary by town, authority and project, so avoid presenting grant funding as a substitute for the negotiated package.
Proposed reform: do not assume a new levy is already in force
Government reform material has proposed replacing the existing system with a locally determined Infrastructure Levy. That is a policy direction, not proof that the proposed levy has replaced S106 or CIL in every English authority. Before relying on a reform measure, verify the enacted legislation, commencement dates, transitional rules and the local arrangements applying to the permission. Until then, analyse the operative S106 agreement and CIL schedule.
A practical due-diligence checklist
- Confirm that the project is in England and identify the responsible local planning authority and charging authority.
- Map every phase, permission and S106 agreement; record each trigger, amount, indexation rule, delivery deadline and repayment clause.
- Calculate CIL from the current charging schedule, including reliefs, exemptions, instalments and commencement requirements.
- Separate affordable-housing obligations from other infrastructure contributions; do not count CIL as an affordable-housing funding source.
- Check for pooled-obligation and double-counting constraints affecting the same road, school or facility.
- Compare promised infrastructure with the authority’s latest and historic infrastructure funding statements.
- Identify interim finance, lender security and the consequences if development is slower or less valuable than forecast.
- Read viability reviews and variations to understand why an obligation changed and what was ultimately secured.
- Verify any claimed reform against current law and the authority’s transition arrangements.
Questions readers commonly ask
Do developers pay for all infrastructure in a new town?
No. Developers normally contribute through S106 and, where adopted, CIL, while public bodies may provide grants, land finance or borrowing. The balance is specific to the town and its agreements.
Can CIL pay for affordable housing?
No. Affordable homes can be secured through S106 planning obligations, not through CIL receipts.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchWhere can I verify what a council received and spent?
Start with the council’s latest annual infrastructure funding statement, then match its entries to the relevant S106 agreements, CIL records and infrastructure programme.
Is the proposed Infrastructure Levy already replacing S106 and CIL?
Not universally. Check enacted law, commencement and local transitional arrangements before treating it as operative.
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