It all starts with planning – Highways agreements
It will often be necessary for works to be carried out to the existing public highway network in conjunction with development. These works will often form part of the planning application itself, with the technical details to be agreed and finalised post-grant of permission. Many developments will also facilitate the dedication and adoption of new roads to be constructed as part of the public highway network.
Section 278 of the Highways Act 1980 allows local authorities to enter into an agreement for a developer to either pay for, or make alterations or improvements to, the highway to facilitate a development. Section 38 enables a local highway authority to enter into an agreement with a developer to adopt a new road as public highway. It is these two provisions which are often key to delivering developments and form the basis of the considerations in this article.
In most cases securing the highways agreement will be put in place post-grant of planning and therefore managing this process well in advance is key to minimising any resulting delays on site. Below are five key things to consider when a highways agreement is required in conjunction with a development.
1. Technical Approval
Whilst indicative drawings will be approved as part of the planning process, it will still be necessary for the detailed specification of works to be technically approved by the local highways authority in conjunction with entering into the s278 agreement. Depending on the nature, scale and complexity of the works being undertaken the time needed in order to obtain technical approval should be factored into the development programme.
Most councils will require the drawings to be technically approved before the s278 agreement can be completed and it can often be the final piece of the puzzle before the works can progress. Starting early conversations with the local highways authority can be crucial in managing the programme timings.
2. Cash Deposit vs Bond
Local authorities will require a form of security to be provided in conjunction with carrying out the works, to be used by the local authority to remedy any breaches in the event of developer failure. This can either be provided as a cash deposit or via a bond with a third party surety.
The determining factor in which option can often be the amount of the security, often between 110% – 150% of the total cost of carrying out of the works but councils will have a preferred approach. For very large or complex schemes the council may require a third party bond to be provided.
Establishing the availability of bonds within the market as early as possible is important if that is the preferred option. Councils will often have a precedent bond which does not align with the surety’s preferred form, therefore understanding any particular requirements of both parties early in the process can iron out any issues earlier in the process.
The return of the cash deposit or release of the bond will be linked to the completion of the works and the adoption by the council, usually in incremental amounts as specified in the agreement. It is therefore important to ensure that the requirements of the agreement are managed effectively to ensure that funds are released without delay.
3. Maintenance Period
Following completion of the works, s278 agreements will require the developer to remain responsible for remedying any defects or damage to the works for a given period (usually 12 months but for larger and more complex schemes, it will often be a longer period). Following the expiry of that period and provided any damage has been remedied, the local authority will adopt the works and maintain at the public expense.
The timings of the maintenance period are a consideration to marry up with any defects period for the building contract to carry out the works. Ensuring that the relevant certificates are issued confirming that the works are either in the maintenance period, or have now been successfully adopted, are often are key area for any tenants or incoming buyers. It is important to ensure that the administration side of the s278 agreements are managed effectively and the relevant paperwork available when needed.
4. Section 38 and Adoption
Where a highways agreement also includes an area to be dedicated as highway and then adopted as maintainable at the public expense, it is important this area is clearly indicated on a plan. Timings for the dedication (public rights) and adoption (maintenance) taking place are key to consider in terms of managing access and responsibilities for the relevant area.
5. Planning Conditions and S106 Agreements
Where a development will require works to the public highway, the drawings submitted at application stage will often be included in a planning condition or a section 106 agreement. It is therefore important to ensure that the drawings technically approved and referred to in the s278 agreement are consistent with those originally secured in the planning permission or s106 agreement. If the design changes or scheme of works alters post-grant of planning, it might become necessary to vary the permission or s106 agreement to avoid conflicts between the different planning and highway controls.
Although unusual, some councils will absorb the s278 agreement within the s106 itself and in that instance no separate highways agreement will be required post-grant of planning.
Please do not hesitate to contact Sophie Smith, Associate in our Planning Team, for advice on highways agreements or any other planning matters.
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