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Summary
On Friday 13 June 2025, Paul Kitson, Corporate Director of Inclusive Economy, Housing and Culture, in consultation with Rokhsana Fiaz, Mayor of Newham as Portfolio Holder for Inclusive Economy, Housing and Culture, approved the completion of a Section 106 (S106) Unilateral Undertaking (UU) for the Pier Road development. This decision allows the council, as landowner, to fulfil obligations related to planning permission for a development of 350 new homes. The decision was made under delegated authority from the Cabinet.
Pier Road S106 Unilateral Undertaking
Paul Kitson, Corporate Director of Inclusive Economy, Housing and Culture, in consultation with Rokhsana Fiaz, Mayor of Newham as Portfolio Holder for Inclusive Economy, Housing and Culture, approved the completion of the Unilateral Undertaking to secure planning permission for the Pier Road site. This decision finalises an agreement ensuring that the development proceeds with the necessary planning obligations.
The S106 agreement1 outlines financial and non-financial contributions from the developer to mitigate the impact of the development. Background:
In December 2023, Newham's Strategic Development Committee (SDC) resolved to grant planning permission for a development at Pier Road, subject to the council completing a Unilateral Undertaking to capture the S106 obligations. In June 2024, the Cabinet approved the Heads of Terms for the Pier Road S106 UU and delegated authority to the Corporate Director of Inclusive Economy, Housing and Culture, in consultation with the Portfolio Holder for Inclusive Economy, Housing and Culture, to finalise the agreement.
Financial Obligations:
The S106 agreement includes several financial contributions, which have been updated since the Cabinet's initial approval in June 2024. These changes include:
- An increase in legal fees.
- An increase in the carbon offset payment following a review by the Greater London Authority (GLA).
- A new contribution to Transport for London (TfL) for road work improvements on Pier Road.
- A reduction in the car club membership allowance to remove VAT.
The total financial contributions have increased by approximately £531,000 compared to the original estimate of £1.88 million. The revised contributions are detailed in the table below:
| Contributions Approved at Jun-24 Cabinet | Updated Contributions | Change | ||||
|---|---|---|---|---|---|---|
| LBN S106 Legal Fees | £ | 10,000 | £ | 15,000 | £ | 5,000 |
| Car Club Membership | £ | 21,000 | £ | 17,500 | -£ | 3,500 |
| LBN S106 Monitoring | £ | 15,000 | £ | 15,000 | £ | - |
| Contribution to Our Work Newham | £ | 591,481 | £ | 592,000 | £ | 519 |
| Travel plan monitoring | £ | 10,530 | £ | 10,530 | £ | - |
| Car Free monitoring | £ | 2,000 | £ | 2,000 | £ | - |
| Education Contribution | £ | 984,367 | £ | 984,367 | £ | - |
| Total | £ | 1,634,378 | £ | 1,636,397 | £ | 2,019 |
| Contributions Approved at Jun-24 Cabinet | ||||||
| TFL Roadworks Contribution | £ | - | £ | 475,000 | £ | 475,000 |
| Carbon offset payment | £ | 247,184 | £ | 300,740 | £ | 53,556 |
| Overall Total | £ | 1,881,562 | £ | 2,412,137 | £ | 530,575 |
To account for inflation, the S106 contributions will be uplifted from December 2023, with payments expected by April 2026. The estimated contributions at that time are:
| Updated | Contributions RPI Dec-23 | RPI Apr 25 | Cost inflated to Apr-25 | Estimated Inflation between Apr-25 and Start on Site | Estimated Contributions at Apr-26 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| No | LBN S106 Legal Fees | £ | 15,000 | |||||||
| Indexation | Car Club Membership | £ | 17,500 | |||||||
| LBN S106 Monitoring | £ | 15,000 | 379.0 | 402.2 | £ | 15,918 | 3% | £ | 16,396 | |
| Contribution to Our Work Newham | £ | 592,000 | 379.0 | 402.2 | £ | 628,239 | 3% | £ | 647,086 | |
| RPI | Travel plan monitoring | £ | 10,530 | 379.0 | 402.2 | £ | 11,175 | 3% | £ | 11,510 |
| Indexed | Car Free monitoring | £ | 2,000 | 379.0 | 402.2 | £ | 2,122 | 3% | £ | 2,186 |
| Education Contribution | £ | 984,367 | 379.0 | 402.2 | £ | 1,044,624 | 3% | £ | 1,075,962 | |
| Total | £ | 1,636,397 | £ | 1,702,078 | £ | 1,753,140 | ||||
| BCIS Dec-23 BCIS Apr | 25 | Cost inflated to Apr-25 | Estimated Inflation between Apr-25 and Start on Site (Apr 26) | Estimated Contributions at Apr-26 | ||||||
| BCIS | TFL Roadworks Contribution | £ | 475,000 | 452.7 | 475.1 | £ | 498,503 | 2.5% | £ | 510,966 |
| Indexed | Carbon offset payment | £ | 300,740 | 452.7 | 475.1 | £ | 315,621 | 2.5% | £ | 323,511 |
| Overall Total | £ | 2,412,137 | £ | 2,516,202 | £ | 2,620,117 |
The increased S106 costs will be offset by a £400,000 reduction in the Community Infrastructure Levy (CIL) contribution, resulting in no change to the total approved development budget of £155.1 million.
Non-Financial Obligations:
The non-financial obligations remain unchanged from the June 2024 Cabinet decision. These include:
- Ensuring that 36.3% of the 127 units are affordable, with a mix of 85 social rent and 42 London Living Rent units.
- An early-stage viability review if the scheme does not progress within two years of planning consent.
- A late-stage viability review with surplus split 80/20 in favour of the council.
- Commitments to education for young people during the construction phase.
- Local labour and supply chain commitments.
The council intends to vary the affordable housing mix to deliver all 127 affordable homes as social rent units, aligning with the financial model approved in December 2024.
Implications:
Finalising the S106 UU is required to secure planning permission for the Pier Road development. The legal fees and S106 monitoring fees will be funded from the Pier Road budget within the existing capital programme. The Corporate Director of Inclusive Economy, Housing and Culture, confirmed that they have consulted with the Portfolio Holder for Inclusive Economy, Housing and Culture, in line with the Cabinet delegation.
Financial Risks:
There is a risk that the council could lose the costs incurred on the S106 agreement if it decides not to proceed with the development. However, this is considered unlikely due to the financial modelling confirming the scheme's viability.
Legal Implications:
The S106 agreement is made under Section 106 of the Town and Country Planning Act 1990, which allows planning obligations to restrict development or require payments to the planning authority. The council has opted for a unilateral undertaking because it is both the landowner and the planning authority.
Equalities Implications:
An Equalities Impact Assessment (EqIA) from October 2018 found that increasing the supply of affordable homes will have a positive impact on younger people on lower incomes, single parents, women, and some ethnic minorities. The proposed development is expected to contribute to these positive impacts by increasing the supply of social rent homes in Newham.
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Section 106 agreements, also known as planning obligations, are legal agreements between local authorities and developers, used to mitigate the impact of new developments on the community and infrastructure. ↩
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