Agenda item

To examine the receipt and spend of developer contributions received from Section 106 legal agreements as at 31 December 2022, incorporating an examination of the plans to use Section 106 funding for the improvement of parks.

The sub-committee received the latest in a series of reports setting out details of the current balances, commitments and spend in relation to Section 106 agreements.

The Authority had the power under Section 106 of the Town and Country Planning Act 1990 to require developers to make financial contributions towards the delivery of a range of services including highways, affordable housing, sport and leisure facilities, health services and play sites where these contributions would make a development proposal acceptable in planning terms and mitigate the impact of the development on an area.

The sub-committee noted that on 31 December 2022, the Authority had received £20.266m in contributions of which £6.609m had been spent. A balance of £13.656m remained in the budget but £3.910m was committed.

At its previous meeting the sub-committee had agreed to invite those officers responsible for the delivery of projects to be funded from Section 106 contributions to attend future meetings to explain the reasons why these sums were not yet committed or spent. In accordance with this decision the Head of Environment & Safer Neighbourhoods, Kim Pye, attended the meeting to present a detailed analysis of developer contributions received, spent and committed for the improvement of parks together with emerging plans to use the remaining balances.

Members of the sub-committee asked a series of question of officers when the following issues were examined and officers were asked to provide supplementary information:

a)      Members expressed concern that the spreadsheet did not contain an end date for two financial contributions. Officers indicated that work was progressing to confirm an end date but in the meantime the use of the funding had been committed and approved for improvements to Chirton Dene Park and Benton Quarry Park.

b)      It was noted that a number of developer contributions had not been spent prior to the expiry of the Section 106 legal agreement or “end date” and rated as red in the spreadsheet presented to the sub-committee. Members expressed concern that funding which appeared to have been received up to 10 years ago remained unspent and now at risk of repayment to developers. Members asked that they be provided with an explanation of the reasons why each of the financial contributions which had reached its end date had not been spent prior to that date.

c)       With reference to the financial contributions received from Bellway Homes, associated with the Moorhouses Reservoir development, it appeared that the funding had been secured without a clear plan as to how it would be spent. The sub-committee asked that they be provided with an explanation as to the Authority’s approach to identifying and developing projects to be funded from Section 106 contributions.  Members also asked that they be provided with a more detailed breakdown of the dates on which the contributions had been received to provide a clearer indication of how long the funding had been available.

d)    As many of the contributions had been ear marked for delivery of the Regeneration Killingworth Master Plan, the sub-committee asked that they be provided with details of the proposed improvements to parks contained within the plan.

e)      A residual amount of £540 received from development of 16 John Street, Cullercoats was to be transferred for the management of the Section 106 process. Members asked officers to confirm whether the amount could be used to supplement the budgets for play sites which they understood was currently £500 per playsite.

The sub-committee considered which areas of Section 106 spending it wished to examine at its next meeting. It was suggested that the relevant officers responsible for the delivery of projects to improve sports facilities and play sites be invited to attend the meeting.  To aid the sub-committee’s understanding of how the Authority identifies and develops projects to be funded from Section 106 contributions, it was suggested that officers be invited to comment on the extent to which the Authority adopts a strategic approach to pooling contributions together to deliver longer term programmes of improvements.

It was agreed that (1) the current balances, commitments and spend in relation to Section 106 agreements be noted;

(2) the sub-committee be provided with the following supplementary information:

i)    an explanation of the reasons why each of the financial contributions which had reached its expiry or end date had not been spent prior to that date;

ii)    an explanation as to the Authority’s approach to identifying and developing projects to be funded from Section 106 contributions;

iii)   a more detailed breakdown on the dates on which each of the financial  contributions were received to provide a clearer indication of how long the funding had been available;

iv)   details of the proposed improvements to parks contained within the Killingworth Master Plan; and

v)   confirmation as to whether the residual amount of £540 received from development of 16 John Street, Cullercoats could be used to supplement the budgets for play sites; and

(3) the relevant officers responsible for the delivery of projects to improve sports facilities and play sites be invited to attend the next meeting to explain the reasons why financial contributions received from developers remain unspent or uncommitted and they be asked to comment on the extent to which the Authority adopts a strategic approach to pooling contributions together to deliver longer term programmes of improvements.