Agenda item

The Executive Member for Financial Stability introduced the item which was the annual report to the Committee on Section 106 at East Herts Council, the Infrastructure Funding Statement and the work of the Section 106 Programme Manager.

The Executive Member for Financial Stability said that the report provided basic background information on Section 106 contribution identification, collection, and allocation at East Herts Council. He said that this included an overview of historic Section 106 contribution collection and allocations from 1^st April 1996 to 31^st March 2023, details of income and expenditure in the last five years, and an update on the Section 106 contributions collected and allocated in the current financial year (from 1^st April 2023 to the end of September 2023).

The Executive Member for Financial Stability said that the report also included information on the audit of Section 106 which was currently being undertaken, for which draft feedback was very positive. He said that the final report would be shared with Members and reported on in detail in the next report to the Committee in November 2024.

The Executive Member for Financial Stability referred to Appendix A, the Annual Infrastructure Funding Statement for 2022 – 2023 which the Council was bound by Legislation to produce and publish. He said that this was the fourth Infrastructure Funding Statement produced by East Herts Council, which provided detailed information on Section 106 for the last financial year (2022/23).

The Executive Member for Financial Stability said that the Section 106 Programme Manager would be providing a Member Briefing on Section 106 on 7^th December 2023, for which all Members would receive online meeting details.

Councillor Nicholls said that historically Section 106 funds were able to be reallocated internally to finance projects in different parts of the district, i.e., Hartham Swimming Pool. She asked if this had now changed. 

The Section 106 Programme Manager said that legislation was changed in 2019 to include a named project use or recipient within the Section 106 contribution (with a degree flexibility for security and back up). She said that prior to this change agreements were generalised and enabled contributions to be received within the vicinity of the development. She said it was therefore vital that she was made aware by both Members and the community what was needed so this could be written into agreements.

The Section 106 Programme Manager said that Hartham received funding as it is one of the Council’s flagship destinations, with the leisure facilities used by residents of new developments.

The Chairman said that it was good to note that the Section 106 Programme Manager was involved in Section 106 agreements from the beginning, and not just at the distribution of funds stage.

Councillor Jacobs asked if it was unusual to only have one provision to provide affordable housing included in a Section 106 agreement in a year (2022/23).

TheSection 106 Programme Manager said that 2022/23 was a poor year for Section 106 agreements as there were few developments signed within the year. She said that a search of the Infrastructure Funding Statement would show several large developments with significant housing provision from previous years. 

Councillor Hart said that a lack of affordable housing which met people’s needs was a concern.

The Section 106 Programme Manager said that developments which come forward are bound by supplementary planning documents. She said that the Council negotiated with developers to obtain the maximum affordable housing possible, but that the outcome also depended on viability. 

Councillor Hart asked if viability was placed above the needs of the local population. She said that there was a disconnect between the needs of the community and a demographic crisis being created, which encouraged younger people to live elsewhere.

TheSection 106 Programme Manager said that such needs were taken into consideration, with a full report written by Officers. She said that there was also an independent viability review when viability was an issue with an application.

The Head of Strategic Finance and Property said that in line with the District Plan most of the major sites in the District have come forward for development and Section 106 agreements were signed. He said that the provision to provide affordable housing occurred when a development application was for ten or more houses. He said that the Government had strict viability calculations, which the Council had to apply.     

Councillor Nicholls asked for clarity on how the needs were defined for Section 106 NHS (National Health Service) Integrated Care Board (ICB) contributions.

TheSection 106 Programme Manager said that she could not comment on needs, but that the ICB put forward their requirements as a statutory consultee when a planning application came forward. 

Mr Poppy said that it was innovative for the Council to have a Section 106 Programme Manager in post and asked if Hertfordshire County Council (HCC) and the ICB contributed to the running of the service.

TheSection 106 Programme Manager said that these bodies did not make such a contribution, but a monitoring fee was collected which went towards the funding of her role.

Mr Poppy asked if Section 106 contributions were taken back if they were not spent within the time specified in the agreement.

TheSection 106 Programme Manager said that there had only been one instance where funds were taken back. She said that this was due to a change in circumstances, resulting in monies which could not be used for the set reason given within the agreement. 

TheSection 106 Programme Manager said that on average a time limit of ten years was stipulated in agreements, but that many new agreements cited a five-year timeframe, which put pressure on both her and recipients. She added that HCC undertook its own collection and monitoring of Section 106.

Councillor Deering said that the NHS were not always good responders to Section 106 invites, with only a small improvement in engagement the last eighteen months.

Councillor Jacobs referred to the table on page 117 of the report and asked for clarification regarding the text found in place of several total funding amounts in column four.

TheSection 106 Programme Manager said that the text was seen where there had been a deed of variation to a Section 106 agreement. She said that this was normally due to a legal change, such as a mortgagee, and so there would be no additional funds attached to the legal agreement.

The Chairman thanked the Section 106 Programme Manager and the Executive Member for Financial Sustainability for their report.

      It was moved by Councillor Nicholls and seconded by Councillor Hart that the recommendations, as detailed, be approved.  After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that Members note and comment on the contents of the Section 106 Update Report and the 2022/23 Infrastructure Funding Statement as attached at Appendix A.