Agenda item

The Special Projects Planner presented a report detailing the Council’s unspent Section 106 monies, how the income was allocated and the time limits for spending the funds.

Members were informed that as at June 2019, the current balance of S106 planning obligation financial contributions held and unspent was £10.2 million.  It was explained that £8.7 million was a more accurate figure, as this excluded money held for longer term maintenance of open spaces transferred to the Council by some developers. 

93% of the £8.7 million had already been committed to specific works, projects or tasks.  The majority of the £8.7 million sum related to proposed capital works, the remaining was collected for non-capital items.  Non-capital items included Travel Plan monitoring and funding for bus passes.  Consequently, £7 million was the current balance held for capital works, most of which was for proposed highway and transport works.

Members were advised that there were several reasons for the current balance, including: if funding was a contribution towards part of a project, time was needed to gather additional money before committing to spend, and budget holders required flexibility to spend money held for investment.

In most cases the S106 planning obligation specified how the financial contribution must be spent and on what project.  Sometimes this was very specific and at other times it was more general and allowed flexibility.  Each contribution had a designated budget holder who was informed when a S106 was signed, when income was expected and any restrictions about how it could be spent, in particular the time limits for it to be spent.  Precisely how and when money was spent was the responsibility of the budget holder.  The time limit for spending S106 money was normally fixed at five, eight or ten years from receipt.  Five years was the accepted guideline in most circumstances, but officers were able to seek a longer period if necessary.

It was confirmed that the Council had never returned S106 funds to a developer or landowner due to it being unspent within the set time frame.  Occasionally, developers or agents contacted officers to ask if the money was being spent correctly within the required time limit.

A discussion ensued, during which the following issues were raised:

• Housing schemes in Slough Town Centre often did not include social housing as developers did not consider it financially viable to incorporate this provision.  Members asked for further information about the number of new housing schemes that provided social housing to be circulated to the Committee.

• Members asked for the details of any outstanding S106 money that had not yet been collected to be circulated to the Committee.

• In response to a query about how the Council pursued developers for unpaid S106 money, Members were informed that a S106 was a legally binding agreement and ultimately if an agreed contribution was not provided to the Council the matter could be settled in court.

• Planning officers considered the viability of a scheme and the S106 contribution offered and assessed these considerations as part of the  decision-making process.

• It was confirmed that a S106 obligation remained attached to the land, therefore if a developer become insolvent and unable to complete a scheme, the S106 obligation remained and transferred to the next land owner.

• Members asked how common it was for developers to declare a scheme unviable and subsequently negotiate a lower S106 contribution.  In response, the Special Projects Planner advised that this situation was uncommon and had only occurred on a few occasions.

• New regulations coming into force in September 2019 required the Council from 2020 to publish an infrastructure funding statement listing Section 106 money received and spent.  It was expected that a national standardised format for categorising and listing contributions to be available for local authorities to use.  Members requested a copy of the statement before it was published.

• It was noted that the Government currently limited S106 pooling to five contributions for any one infrastructure project.  This meant that any large project requiring more than five contributions had to wait until other funding sources were available.  This restriction would be relaxed in September 2019.  The restriction did not and would not apply to affordable housing. 

• Members noted that the Council’s policy required an affordable housing contribution for any new scheme above 15 units.

Resolved –

(a)  That the report be noted.

(b)  The information requested by Members as detailed above be circulated to the Committee.