Section 278 Agreement

This refers to S278 of the Highways Act 1980 (as amended) and is essentially a formal agreement between a highway authority and another party to make changes to an existing highway where it will of a benefit to the public and either wholly or partially (as specified in the agreement) at the cost to the other party. The section is a little more involved, but most people will come across this piece of legislation where highway changes are being made to accommodate a new development and the changes form part of a planning consent (often subject to detailed design considerations). S278 also allows a sum to be paid for ongoing maintenance works known as a “commuted sum”.

S278 agreements will normally contain a bond or cash deposit to cover the costs of the work in case the other party defaults in some way which allows the highway authority to step in and complete the works at no cost to the public purse (or put the highway back to how it was in some cases). 

It is an established legal principle that a highway authority cannot unreasonably withhold an agreement made under S278 to prevent a development which has planning consent and this can create tensions, especially in non-unitary situations, where a highway authority has objected to a planning application and is then expected to accommodate highway changes. In essence the “benefit to the public” issue has already been tested at planning application stage, although the highway works must be integral to the scheme. The famous case where this was tested is known as “the Powergen case” which can be read via

S278 can be used for other purposes. For example, a tenant's management organisation (TMO) may wish to have their estate traffic calmed, but the streets are public highways and not under their control. S278 would allow the TMO to fund the works to be undertaken by the highway authority – formal agreements are used to ensure transparency.