S278 agreements generally include a cash loan or deposit to cover labour costs if the other party is in late payment in one way or another, allowing the motorway authority to intervene and complete the work at no cost to the government (or to hand over the highway as it was in some cases). A Section 278 (or S278) agreement is a section of Highway 1980 that allows developers to enter into a legal agreement with the Council (as a Highway Authority) to make permanent modifications or improvements to a public highway as part of a plan. It is a firm legal principle that a motorway authority cannot unreasonably refuse an agreement under S278 to prevent a construction that has planning authority, which can create tensions, particularly in non-harmonized situations where a motorway authority opposes a plan request, and then changes to the highway are expected. For the most part, the issue of “public benefits” was tested from the planning application phase, although highway work must be an integral part of the system. The famous case in which this was tested is known as the “Powergen Case,” which can be read on swarb.co.uk/regina-v-warwickshire-county-council-ex-parte-powergen-plc-qbd-9-jan-1997/. S278 can be used for other purposes. For example, the administrative organization of a tenant (TMO) might want estate traffic to be calmed down, but roads are public highways and not under their control. S278 would allow the TMO to finance the work to be carried out by the motorway authority – formal agreements are used to ensure transparency. In cases where a highway system requires real estate developers to set up land under their control to accept it as public highways, please refer to Section 38 of the agreements.
In Birmingham, we normally use s278 agreements to allow designers to employ a contractor in road construction and for that contractor to work on the existing public highway, as we, the motorway authority, would carry out work. The proponent is responsible for all aspects of the public highway work, from planning to monitoring the construction and ensuring that the work is completed to our satisfaction. This relates to the S278 of the Highways Act of 1980 (as amended) and essentially constitutes a formal agreement between one motorway authority and another party to make changes to an existing highway, where it will benefit the public in whole or in part (as stipulated in the agreement) at the expense of the other party. The section is a little more involved, but most people will run into this legislation that changes highways to accommodate a new construction, and the amendments are part of a planning authorization (often subject to detailed design thinking).