Population growth from new housing developments places increasing pressure on general practice. One of the least understood, but potentially valuable, funding routes available to GP practices is Section 106 (S106) funding. When used correctly, it can support much-needed GP premises improvements and expansion.
This article explains what Section 106 funding is, what it can be used for, how to access it, how repayment works, and how it interacts with notional rent reimbursement.
What is NHS Section 106 funding?
Section 106 funding arises from Section 106 of the Town and Country Planning Act 1990. It allows local planning authorities (LPAs) to enter into legally binding agreements with property developers. This ensures that developers contribute to the additional infrastructure needed to support the growing population of an area.
In areas where new housing will increase patient numbers, councils can secure S106 contributions specifically to mitigate the impact on local GP services. These funds are usually held by the local authority and released to the NHS (typically via the ICB) for agreed healthcare projects.
What can Section 106 funding be used for?
Section 106 funding is capital funding, not revenue funding. It must be used for projects that directly address capacity pressures caused by population growth.
Typical permitted uses include:
- Extension or reconfiguration of existing GP premises
- Creation of additional consulting or treatment rooms
- Improvements to clinical or patient-facing space
- Accessibility works (e.g. lifts, ramps, compliant toilets)
- Contribution towards new or relocated health centres
Funding must be site specific and linked to demonstrable growth pressures. It cannot be used for staffing costs, running expenses, or routine maintenance.
How do GP practices apply for Section 106 funding?
While processes vary locally, the typical steps are:
- Identify qualifying developments
Large or multiple housing developments nearby that will increase patient numbers. - Engage early with the local Integrated Care Board (ICB)
Raise the issue with the ICB primary care estates or commissioning team. - Demonstrate impact and need
This may include:
– Patient list growth projections
– Capacity constraints
– Estates condition or space shortfall
– Alignment with local estates strategy - Prepare a capital proposal
Often alongside other funding sources, such as NHS improvement grants. - Council approval and release of funds
Funds are released subject to the S106 agreement terms and timescales.
Practices that engage early with their ICB and local planners are significantly more likely to benefit from S106 funding allocations.
Do GP practices have to repay Section 106 funding?
In most cases, no. Section 106 funding is not a loan.
However, repayment (or “clawback”) may occur if:
- The funds are not spent within the agreed time limit
- The project does not proceed as approved
- The premises cease to be used for NHS primary care within a defined period
If unspent, funds may be returned to the local authority or (in some cases) the developer.
How long do you have to use the funding?
Most Section 106 agreements include a time limit, commonly 5 to 10 years from the date the contribution is triggered. If funds are not committed or spent within this period, the council may reclaim them. This is why early planning and a “shovel ready” project are critical.
Does Section 106 funding affect notional rent reimbursement?
As Section 106 funding is not a loan, practices will not be subjected to an abatement of their NHS rental reimbursement.
In fact, capital improvements funded via S106 may increase the current market rental (CMR) value of the premises. Such improvements can trigger a notional rent review and, in many cases, this results in higher notional rent reimbursement. This process is governed by NHS Premises Costs Directions and BMA guidance.
Key takeaways for GP practices
- Section 106 funding is developer funded capital, not NHS revenue
- It can significantly support premises expansion and modernisation
- Practices must work proactively with their ICB to access it
- Funding is time limited but usually non repayable
- It may increase the practice’s Notional Rent after review.
Final thought
With continued housing growth across England, Section 106 funding is becoming an increasingly important — and underused — opportunity for GP practices. Early engagement, strong estates planning, and collaboration with ICBs can unlock funding that might otherwise be lost.
