Purpose of Policy

East Sussex County Council (ESCC) recognises the vital role played by the local highway network. ESCC is committed to ensuring that it has the best highway network for the investment available.

This policy sets out the requirements and procedures for the calculation and application of commuted sums associated with the adoption of new highways or improvements delivered as part of development proposals. Commuted sums are financial contributions made by third parties (usually developers) to offset the future maintenance burden of assets adopted by the Highway Authority.

The policy informs the Commuted Sums at New Development Guidance which will provide a transparent and consistent approach for the application and calculation of commuted sums. Guidance for all stakeholders responsible for delivering new infrastructure on the types of materials and assets preferred by the Highway Authority, the associated commuted sums costs, and the necessary levels of consultation required with the Highway Authority for them to be approved and adopted.

In carrying out this policy, ESCC will meet its statutory obligations and will also support the Council’s Priorities, Local Transport Plan and Highway Service Outcomes.

Policy Statement

1. Legal Framework

Commuted sums may be secured under:

· Section 38 of the Highways Act 1980 (for new roads to be adopted)

· Section 278 of the Highways Act 1980 (for improvements to existing highways)

2. Scope of Assets Covered

Commuted sums may be sought for, but are not limited to, the following assets:

· Carriageways (non-standard surfacing or materials)

· Footways and cycleways (non-standard materials or paving)

· Drainage systems (especially SUDS)

· Street lighting (non-standard columns or lanterns)

· Street furniture and signs

· Structures (bridges, retaining walls, culverts)

· Trees, planting, and landscaped areas

· Traffic signals and electrical equipment

3. Standard vs Non-Standard Construction

Assets constructed using the authority’s standard materials and specifications are generally not subject to commuted sums. Non-standard elements (e.g. decorative surfacing, ornamental bollards, custom lighting) will incur a commuted sum to cover their higher maintenance and replacement costs. This includes patching, repairing, maintaining and replacement with standard materials

4. Calculation of Commuted Sums

Commuted sums are calculated using a Net Present Value (NPV) approach, based on:

· Estimated maintenance cost (Mp)

· Discount rate (D) – typically 2.2%

· Time period (T) – typically 60 years (or adjusted where justified)

Formula:

Adjustments may be made to account for shorter life cycles of certain assets (e.g. 15 years for traffic signals, 30 years for fencing).

5. Payment & Legal Agreements

Commuted sums must be agreed and secured through the legal agreement before technical approval is granted:

· For Section 38: before adoption of new roads

· For Section 278: before construction of works on the public highway

Any design changes during construction that increase the maintenance liability will require the commuted sum to be updated before final certification.

6. Use of Commuted Sums

All commuted sum monies will be re-invested into maintenance of the highway network, and ringfenced for that purpose and where practicable to the specific asset category. Commuted sums monies will be drawn down annually based on assessed need and the availability of resources, with allocations representing a proportionate percentage of the total funding available each year.

7. Application of Commuted Sums Policy

· The Commuted Sums Policy Guidance applies to all planning submissions validated on or after the 1 August 2025 where Section 38 and Section 278 agreements are required.

· Where a planning submission has been validated for a Section 38 or Section 278 agreement prior to 1 August 2025, commuted sums will be applied in accordance with the previous Commuted Sums Policy Guidance. However, if the Section 38 or Section 278 legal agreements are not signed within 2 years of 1 July 2023, the new Commuted Sums Policy will apply.

Supporting Information

The legal authority to secure these sums was confirmed by the Court of Appeal, which clarified that commuted sums may be sought for all elements of future maintenance, not only for "non-standard" features.