Agenda item

To receive a briefing on Section 106 Agreements and Funds from the Section 106 Officer.

The Committee received a report on the current position of Section 106 agreements (S106) from the dedicated Section 106 Officer. The report updated Members on the balances of S106 and the work being undertaken to ensure service areas spent the outstanding balances where appropriate.

The Council currently held a total of £4,900,989.90 in the S106 account, £3,277,582.25 of the total figure was identified as non-time limited funds and £1,623,407.64 was identified as funds time limited for expenditure.

The report showed expenditure of S106 funds since 2009, examples of expenditure and delivery of benefits to the community, and the future programme to expend S106 monies.

Some of the S106 monies were close to their time limited deadline and the S106 Officer was working with service managers to ensure that they spend the money that was allocated to them before the time expired. The report stated that S106 would be replaced on the adoption of the new Local Plan (2014) by a Community Infrastructure Levy (CIL). However it was contended that this was not accurate and that CIL would become an addition to S106 agreements which would remain the main mechanism for securing funds from developments for communities.

The Committee asked questions and the following points arose:

·         S106 monies were used to mitigate the effect of developments on a community. Negative impacts were identified at the planning stage of developments. Each S106 defined the community affected and where the monies could be spent by the Council.          

·         Each S106 specified how accrued interest was dealt with; in many cases interest was applied to the sum of the S106. The Council did not have a financial benefit in holding S106 money as long as possible to accrue interest.      

·         The £250,000 returned by the Council to a developer as shown in paragraph 7.1 of the report was returned because “The Greenways” did not come to fruition and the S106 agreement specifically stated that money would be returned to the Council if the development didn’t take place.

·         Councillors worked hard to secure S106 monies for their community and wanted to ensure that there is a plan for spending S106 monies.

·        Some of the S106 required match funding by the Council. These cases needed to be clearly identified to ensure that the Council had the funding to match the S106 agreements before being agreed.

·        Appendix 1 showed some agreements that consisted of very small amounts of money. S106 agreements required a lot of legal input which could be expensive and in some cases more costly than the S106 was worth. It was suggested that it would be prudent to allow these amounts to expire and default to avoid the legal costs that out stripe the benefits of the S106 money.         

·        It would be useful for Ward Councillors to maintain knowledge of S106 that affect their ward by arranging Appendix 1 to link S106 monies to the respective ward. It was also considered important that Councillors were informed about S106 agreements that preceded their election to the Council. 

·        Paragraph 9.2 stated a S106 Spending Working Group had been set up in January 2012. The Committee wanted to know how Members could get involved in the spending working group. 

·        The Spending Working Group had agreed that Appendix 1 should be divided into service areas and then each individual balance would be reviewed to allocate a project manager to each amount of S106 money. As stated above the Committee felt Appendix 1 should be divided by Ward to help Councillors monitor S106 in their area.  

·        If a developer became insolvent before S106 money was obtained the Council could claim the amount for the developer’s receivers.

RESOLVED:

(a)  That the Section 106 Officer be thanked and the report be noted.    

(b)  That the Section 106 Officer be requested to return to the Committee at the next meeting with a project plan that illustrates how improvements to the management of Section 106 are going to be developed.   

(c)  That the Head of Development be requested to provide a report on Community Infrastructure Levy at the next meeting of the Committee.