Agenda item

The Infrastructure Contributions and Spend Manager introduced the report which was the third annual Section106 Update to the Committee and included Appendix A – East Herts Council Annual Infrastructure Funding Statement 2021/2022. She highlighted the key points included in the Annual Infrastructure Funding Statement and said that the statement would be published on the Council’s website and submitted to Central Government once reviewed and received by the Committee.

The Infrastructure Contributions and Spend Manager said that she had been specifically asked by the Committee for detail on how she dealt with late payments. She advised that all new Section 106 agreements contain a clause to cover any late payment of contributions by the developer, with late fees and compound interest added. She said that no late payment fees had been charged since 2020, due to a complete review of agreements and her positive relationship with developers.

The Infrastructure Contributions and Spend Manager drew Members’ attention to the potential legislative changes to Section 106 and the information contained within the report relating to the September 2022 Fiscal Statement

The Chairman asked if the aforementioned generated income went into the Council’s Planning Budget. The Infrastructure Contributions and Spend Manager said that this was the case.

Councillor Crofton thanked the Infrastructure Contributions and Spend Manager for her informative report and referred to page 50, which showed Section 106 income and allocation data. He asked if this data showed a drag forward from 2021. The Infrastructure Contributions and Spend Manager explained that all the contributions received went into a bigger pot, and never balanced out year on year as the agreements were signed when planning permission was decided, which could be two years in advance of any payments being triggered. 

Councillor Crofton asked for clarification of where the Section 106 funds had to be spent. The Infrastructure Contributions and Spend Manager said that the locality of where the money was spent had to conform with the wording of the Section 106 agreement itself and was to be used for the benefit of new residents. She explained that Hertfordshire County Council contributions not East Herts Council contributions from a Watton-at-Stone Section106 agreement were used for Ware Library.

Councillor Huggins asked what controls were in place to ensure that money was being spent to deliver what was desired locally. The Infrastructure Contributions and Spend Manager said that this was an ongoing mission and explained how she was reliant on her close working relationship with Planners, Town and Parish Councils, Ward Members and local organisations to identify potential contribution uses. She said that she had tried to make Section 106 as visible and accessible as possible, and the Section 106 funding webpage included an ‘expression of interest’ web form.      

The Chairman asked for examples of works carried out to promote sustainability other than solar panels and electric vehicle charging points. The Infrastructure Contributions and Spend Manager said that bidders were asked to make projects sustainable, as payments were one off and not ongoing. She gave the example of asking that recycled materials be used for playground surfaces.

The Chairman referred to paragraph 3.1.7 of the report and asked if the indexation of payments applied to the period in between the date set out in the legal agreement and when payments were triggered. The Infrastructure Contributions and Spend Manager said that  this was the case and referred the Committee to Appendix B of the report, which showed the typical Section 106 requirements including the indices used and the usual indexation calculation start dates.

The Chairman asked why in some cases the period in which the contributions had to be spent had shortened. The Infrastructure Contributions and Spend Manager said that this was dependent on negotiations with the individual developer, with some larger developers preferring a Consumer Price Indexed (CPI) spend over five years. She said that this was not a problem as projects could be targeted within this time frame and were monitored closely.

Councillor Crofton asked how affordable housing Section 106 agreements worked. The Infrastructure Contributions and Spend Manager explained that there were two options, the first was onsite provision where the developer built housing which was then taken over by a registered housing provider, i.e. a housing association. The second option, if no social housing was provided on site, would be a financial contribution in lieu of provision. This would see funds being held by the Council, and then, via close working with colleagues in the Housing and Health Department, monies spent by housing associations to build extra social housing, which the Council then allocated.

The Chairman thanked the Infrastructure Contributions and Spend Manager for her report and her work.

RESOLVED – that the Infrastructure Funding Statement 2021/2022 and Section 106 Funding Report be noted and received.