We have been approached by an Authority with a question regarding planning obligations agreed between a developer and LPA to secure certain pieces of infrastructure through a traditional S106 agreement. They have obtained legal opinion to the effect that if these works are higher than EU threshold costs then the use of a S106 to secure a developer to provide them would be in conflict with EU procurement law. For large scale growth application it will be reasonably common for certain works to be higher than the EU thresholds, such as for the provision of certain large community facilities, transport improvements, etc. The issue is more pertinent following the outcome of an ECJ decision in relation to a case in France in Jan 2007 (Jean Auroux and others v Commune de Roanne). The ECJ appears to have reinforced the fundamental principles of the public procurement rules, namely the opening up of public contracts to genuine competition. We would be interested to hear if any LPA's have come across this issue and how they may be structuring legal agreements to avoid potential conflict. Or alternatively, if people are not aware of the issue at all, or do not feel it relevant. Any views welcome.
