Agenda item

To receive a presentation on the Council’s approach to utilising income received through Section 106 agreements.

(Presentation to follow)

The Committee received a presentation on the subject of Section 106 Agreements (Appendix A).  During consideration of this item the following points were discussed.

·                In Redditch funds derived from Section 106 Agreements had generally been allocated to affordable housing, education and open space maintenance. 

·                One of the key considerations for Officers when negotiating a Section 106 agreement or CIL arrangement was the viability of the proposed project(s).  In some cases particular projects had to be prioritised to ensure that the agreed projects would be viable.

·                From 2014, or the date when the CIL charging schedule was adopted in Redditch, the Council would no longer be able to pool more than five Section 106 contributions towards one infrastructure project.

·                Elected Members could get involved in discussions about Section 106 arrangements for large developments in their wards. 

·                Members required pre-application training to become actively involved in the Section 106 process for a particular development, though Members who had not been trained could submit written comments for Officers’ consideration.

·                The involvement of Members in work on Section 106 agreements was welcomed by the Council, particularly as Officers recognised that Members would have valuable local knowledge about the potential impact of a proposed development on the area.

·                Officers were asked to investigate the possibility of providing Members with prior notice about developments that could require a Section 106 Agreement and / or CIL arrangement.

·                The support, including finances and resources, required to support the Community Infrastructure Levy (CIL) was debated.  Concerns were expressed that these costs could be relatively high and might have a negative impact on developer companies that were already experiencing financial pressures.

·                Officers explained that CIL agreements would be essential for new developments as it would help to fund infrastructure requirements for the residents who would live in that development.

·                The potential for the Council to influence Section 106 and CIL arrangements involving cross boundary development was also debated.  Officers explained that cross boundary developments were complex as they needed to meet the housing needs in one local authority area though the decision about the development would be made by Councillors representing a different local authority.  In these circumstances Officers would aim to develop a protocol between the two Councils.

·                There was no set guidance dictating the size of developments which would be subject to a Section 106 agreement.  However, Section 106 agreements were more likely to be applied to larger developments due to the potential impact on local infrastructure.

·                In future years it was likely that the Council would negotiate a mixture of Section 106 agreements and CIL arrangements for some large developments.

·                The potential for CIL money to be paid up front by developers was debated.  On the one hand it was suggested that this would help to ensure that appropriate funding was provided to invest in infrastructure for a development regardless of whether the developer subsequently went out of business.  On the other hand Members noted that some developers might struggle to pay CIL funding prior to recouping funds through house sales.

·                Concerns were expressed about cases where developers, for a variety of reasons, had not provided funding requested in a Section 106 agreement.  In these circumstances residents in the new developments could struggle to secure necessary infrastructure.

·                Section 38 Agreements with Worcestershire County Council were used when organising for roads in new developments to become adopted public highways.  A bond needed to be paid by the developer as part of a Section 38 Agreement.  This bond could then be utilised to fund the adoption of roads regardless of whether the developer subsequently went out of business.

·                There would need to be appropriate monitoring to manage CIL agreements once the process was actively applied in Redditch.  It was possible that this monitoring role would be assumed by the Council’s existing Section 106 Officer working group.

RESOLVED that

the report be noted.