Section 38 agreements

A Section 38 agreement (or S38) is the section of the Highways Act 1980 that is used when a developer proposes to construct a new road for residential, industrial or general purpose traffic that may be offered to the Local Highway Authority (St Helens Borough Council) for adoption as a highway maintained at the public expense. 

"An agreement under this section may contain such provisions as to the dedication as a highway of any road or way to which the agreement relates, the bearing of the expenses of the construction, maintenance or improvement of any highway, road, bridge or viaduct to which the agreement relates and other relevant matters as the authority making the agreement think fit."  

When an S38 agreement is in place, the developer must operate within a set of terms, conditions, and timescales. It is supported by a cash deposit or institution-backed surety bond that is calculated by the council that may be called upon to complete the works if the developer goes into liquidation or otherwise defaults on their responsibilities as set out within the agreement.

Prior to the forming of an S38, the developer will have to complete a series of technical checks to ensure that the scheme is suitable for adoption and that the design complies with the council's adoption criteria. 

S38 agreements are often entered into alongside Section 278 agreements (or S278s), which allow developers to carry out works to modify or reconstruct the public highway. This may be necessary, for example, to provide access to a new site or to improve access to an existing site following planning approval. Further information on S278 agreements 

The developer will be required to deposit an institution-backed surety bond or cash deposit with St Helens Borough Council to cover the cost of the highway works. This bond ensures that the council does not incur any costs if the highway works are stalled, changed or aborted by the developer. 

The council will provide the bond figure upon completion of the technical approval process. 

The works detailed within the Section 38 agreement will be staged and, following completion of each stage, the developer will receive the relevant certificate and there will be a reduction in the value of the surety's bond obligation. 

Agreement Reduction Stages

Design checks and supervision fees

St Helens Borough Council will charge for the design checks and supervision of the highway works. This fee is 10% of our estimated highway works costs (Bond Figure), which are calculated using the council term maintenance contracts rates. Once the Section 38 agreement has been signed by all parties, the agreement fees must be paid without delay prior to any works commencing on site.

The council will require an advance non-refundable application fee of £5,000 (outside the scope of VAT) to cover the initial costs in respects of our initial comments on the proposals and our submission validation checks. Once the agreement has been completed, the application fee of £5,000 will be deducted from the design checks and supervision of the highway works agreement fees.

Legal fees

An additional fixed fee of £1000 will also be required to be paid prior to the completion of the agreement to the council's legal service department. This fee is to cover the costs, associated with the drafting, administration and distribution of the agreement. The draft Section 38 agreement documentation will be forwarded to the developer's appointed legal representative for comments once the design checks have been completed, the agreement drawing has been approved and the developer or landowner has provided evidence that they have the right to dedicate the land as public highway. No variation to the wording of the council's model forms of agreement documentation will be accepted.

The developer should note that should any changes to the agreement be required after the document has been engrossed then an additional fee of £500 will be required to be paid to our legal service department to cover the additional administrative costs. 

Commuted sums

St Helens Borough Council may seek payment to pay for the future maintenance of the new or revised highway from the developer, acquiring monies via 'commuted sums' where necessary. Commuted sums allow greater flexibility for the highway authority to adopt non-standard materials and other items when development increases the council's future maintenance liability. The cost of commuted sums can vary depending on the asset however the cost is generally set at a minimum liability period of 25 years maintenance per asset.

Items that generate commuted sums figures are generally items that are non-standard highway assets; for example, highway structures, highway verges, urban traffic control (UTC) equipment, street furniture, bridges, drainage, trees and specialist surfacing. Developers should discuss their requirements with St Helens Borough Council's highways and transport planning department, prior to a full planning application.

The council will provide the commuted sum figures upon completion of the technical approval process and all commuted sum figures will be payable upon completion of the Section 38 agreement.

Payment methods

Payments can be made by Standing Order, Online Bank Transfer or BACS using our bank account details shown below or alternatively, you may pay via an official council invoice. Please ensure you have obtained a payment reference prior to making any payments and quote this on all payments / correspondence. Payment references can be obtained by contacting St Helens Borough Council's highways and infrastructure service. Email: Highwayadoptions@sthelens.gov.uk or alternatively by telephone: 01744 673303.

Account Name: St Helens Council
Sort Code: 60-70-08
Account No: 94231397
Bank Name: National Westminster Bank
Bank Address: 5 Ormskirk Street, St Helens, Merseyside, WA10 1DR