Section 106 and social value commitments

We are often asked what the difference is between S106 and Social Value commitments. Both aim to ensure that developments contribute positively to communities and the environment, but they serve different purposes and operate in distinct ways. In this article we seek to provide a detailed comparison to clarify their differences:

1. Purpose and Scope

Section 106 Obligations:

• Purpose: S106 obligations are designed to mitigate the impact of a development on local infrastructure and services. They ensure that the development contributes to or provides necessary facilities and amenities to accommodate the new population and address any negative impacts.

• Scope: S106 obligations are site-specific and focus on the direct impacts of a particular development. They often involve financial contributions or physical provisions for infrastructure, such as roads, schools, parks, and affordable housing.

Social Value Commitments:

• Purpose: Social value commitments aim to maximize broader social, economic, and environmental benefits beyond the immediate impact of a development. They focus on delivering positive outcomes for the community and the environment throughout the lifecycle of a project.

• Scope: Social value commitments have a broader scope and can cover a wide range of issues, including improving local employment opportunities, supporting local businesses, enhancing community well-being, and promoting sustainability.

2. Legal Basis

Section 106 Obligations:

• Legal Basis: S106 agreements are legally binding and enforceable under the Town and Country Planning Act 1990. They are specific to planning applications and are negotiated as part of the planning approval process.

• Implementation: Compliance with S106 obligations is monitored and enforced by the local authority. Failure to meet obligations can lead to legal action or planning enforcement measures.

Social Value Commitments:

• Legal Basis: Social value commitments are often not legally mandated in the same way as S106 obligations. Instead, they may be incorporated into contracts or procurement processes based on local or organizational policies.

• Implementation: Social value commitments are typically implemented through procurement and contract management practices. They are monitored through performance reviews and reporting mechanisms rather than through specific legal agreements.

3. Focus Areas

Section 106 Obligations:

• Focus Areas: S106 obligations generally focus on mitigating specific impacts of a development, such as:

  • Provision of affordable housing

  • Improvements to local transportation infrastructure

  • Development of educational facilities

  • Creation or enhancement of public open spaces

Social Value Commitments:

• Focus Areas: Social value commitments address a broader range of social and environmental issues, including:

  • Enhancing local employment and training opportunities

  • Supporting local businesses and supply chains

  • Promoting diversity and inclusion

  • Reducing environmental impact and promoting sustainability

  • Improving community engagement and well-being

4. Application and Measurement

Section 106 Obligations:

• Application: Applied specifically to the planning and development process. The obligations are tailored to the needs generated by the specific development project.

• Measurement: Measurement is typically focused on the completion and implementation of the obligations as specified in the agreement. Success is measured by the delivery of infrastructure and facilities as outlined in the S106 agreement.

Social Value Commitments:

• Application: Applied more broadly across procurement and operational practices. They can be integrated into various types of contracts and projects, not just planning and development.

• Measurement: Measurement of social value is often more qualitative and involves assessing the overall impact on community well-being, economic development, and environmental sustainability. Metrics and reporting frameworks vary widely depending on the specific commitments and objectives.

5. Stakeholder Involvement

Section 106 Obligations:

• Stakeholder Involvement: Typically involves negotiations between the developer and the local authority. Stakeholder input may be considered, but the agreements are primarily focused on addressing planning impacts.

Social Value Commitments:

• Stakeholder Involvement: Often involves broader stakeholder engagement, including community groups, local businesses, and other organizations. The aim is to ensure that commitments align with the needs and priorities of the community and contribute to wider social and environmental goals.

In summary, while Section 106 obligations and social value commitments both seek to improve community outcomes, they differ in their purpose, scope, and application. Section 106 obligations are legally binding agreements focused on mitigating the impacts of a specific development on local infrastructure and services. Social value commitments, on the other hand, aim to deliver broader social, economic, and environmental benefits and are often integrated into procurement processes and organizational policies. Understanding these differences helps in effectively addressing both the direct and broader impacts of development projects.

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