Section 106 & Social Value Commitments

A Comprehensive Comparison for Development Projects

One of the most frequent questions we receive is about the differences between Section 106 (S106) obligations and social value commitments. While both mechanisms are designed to ensure that new developments deliver positive outcomes for local communities and the environment, they diverge significantly in their aims, legal standing, and practical application. This article offers a clear and detailed comparison to help you navigate these key concepts.

1. Purpose and Scope

Section 106 Obligations

• Purpose: The primary objective of S106 obligations is to mitigate the direct effects that a development might have on local infrastructure and public services. These obligations ensure that developers contribute towards, or provide, the necessary facilities and amenities required to support new residents and counterbalance any adverse impacts arising from the development.
• Scope: S106 is focused on site-specific impacts, addressing the demands created by a particular project. Typical S106 requirements include financial contributions or the direct provision of infrastructure such as roads, schools, green spaces, and affordable housing.

Social Value Commitments

• Purpose: Social value commitments are broader in intent, aiming to maximise the positive social, economic, and environmental impacts of a project throughout its lifecycle. The goal is to generate long-lasting benefits for the wider community, beyond those tied directly to the development itself.
• Scope: Social value commitments can encompass a wide array of objectives, such as improving employment prospects for local people, supporting small businesses, boosting community wellbeing, and advancing sustainability initiatives.

2. Legal Framework

Section 106 Obligations

• Legal Basis: S106 agreements are legal obligations under the Town and Country Planning Act 1990. They are negotiated as part of the planning permission process and are enforceable by law.
• Implementation: Local authorities are responsible for monitoring and enforcing compliance. Failure to meet S106 obligations can result in enforcement action or legal proceedings.

Social Value Commitments

• Legal Basis: In contrast, social value commitments are typically not statutory requirements. They are often included in contracts or procurement processes as a result of organisational policies or local initiatives, rather than through planning law.
• Implementation: Delivery of social value commitments is managed through contract management and procurement oversight, with progress tracked via performance reviews and regular reporting, rather than through legal agreements.

3. Areas of Focus

Section 106 Obligations

• Provision of affordable housing
• Enhancement of local transport links
• Development of education facilities
• Creation or improvement of public open spaces

Social Value Commitments

• Increasing local employment and skills opportunities
• Supporting local enterprises and supply chains
• Promoting diversity and inclusion
• Reducing environmental impacts and encouraging sustainable practices
• Enhancing community engagement and wellbeing

4. Application and Evaluation

Section 106 Obligations

• Application: S106 obligations are directly linked to the planning process and are tailored to respond to the specific demands of each development project.
• Measurement: Success is measured by the practical delivery of the obligations specified in the S106 agreement, such as the completion of infrastructure or the handover of public amenities.

Social Value Commitments

• Application: These commitments extend beyond planning, often forming part of wider procurement and operational strategies. They can be embedded in various types of contracts and projects, not limited to planning permissions.
• Measurement: Assessment here tends to be more qualitative, focusing on the broader and longer-term impact on community wellbeing, economic resilience, and environmental outcomes. The specific metrics and reporting frameworks used can vary widely depending on the commitments made.

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5. Stakeholder Engagement

Section 106 Obligations
Stakeholder engagement is usually limited to negotiations between the developer and the local authority. While other voices may be heard, the main aim is to address the direct planning impacts of the development.

Social Value Commitments
Social value commitments generally involve a wider range of stakeholders, including community groups, local businesses, and other relevant organisations. The intention is to ensure that the commitments reflect local priorities and contribute to broader community and environmental goals.

Conclusion
In summary, Section 106 obligations and social value commitments both strive to deliver positive outcomes from development, but their methods, scope, and legal standing are distinct. S106 agreements are legally binding and focused on mitigating direct impacts of a specific project, while social value commitments seek broader benefits and are typically integrated into procurement and organisational policies. Understanding these differences is key to successfully managing both the immediate and wider effects of development.

If you’d like tailored advice or guidance on how to incorporate social value into your projects or to ensure compliance with S106 requirements, please don’t hesitate to get in touch. We’re always here to support you on your sustainability journey.