Agenda item

The Executive Member for Financial Sustainability introduced the report, which was the annual report to the Committee on Section 106 at East Herts Council. 

The Executive Member for Financial Sustainability said that report itself provided an update on East Herts Section 106 financial contribution identification, collection and allocation plus information on the 2023/24 Infrastructure Funding Statement (which was included as Appendix A) and feedback from the Internal Audit undertaken last year (which was included as Appendix B), as well as information on other Section 106 related income generation from monitoring fees and S106 information requests.

The Executive Member for Financial Sustainability drew Members attention to paragraph 3.19 of the report, which gave an overview of historic Section 106 contribution collection and allocations from 1^st April 1996 to 31^st March 2024 – with details of the total amounts of contributions received, spent, allocated and unallocated, and paragraph 3.23 which provided more detailed information on the total amounts collected and allocated over the last five years, and an update on the contributions collected and allocated in the current financial year (from 1^st April 2024 to the end of September 2024). He said that figures could be seen at paragraph 3.26.

The Executive Member for Financial Sustainability said that Members would be aware that East Herts Council was bound by Legislation to produce and publish an annual summary of income and expenditure of the financial Section 106 contributions collected by the Council as the annual Infrastructure Funding Statement (IFS), which was required to be published on the council’s website before 31 December each year.

The Executive Member for Financial Sustainability said that the IFS attached at Appendix A was the 5^th to be produced by East Herts and highlighted the following to Members:

·            New Section 106 Agreements - There were eleven new Section 106 Agreements signed in 20232/24 providing £1,171,381.00 in identified East Herts council financial contributions including £11,700 monitoring contributions and 23 new affordable housing units.

·            Historic Contribution information – page 7 of the IFS provided further details on total income, expenditure, and allocated / unallocated contributions from 1^st April 10996 up to 31^st March 2023.

·            2023/24 contributions collected - a total of £5,304,487.68 was received from 86 contributions triggered for payment from 11 individual Section 106 Agreements.

·             2023/24 contributions allocated - a total of £4,859,523.51 was allocated and spent on 21 individual projects or identified uses from 70 individual contributions from 29 Section 106 Agreements.

·            In addition, the IFS gave details of the various council projects and services funded with capital and revenue contributions, and the seven external projects across the district supported with Section 106 in the financial year 2023/24.

The Executive Member for Financial Sustainability said that the Internal Audit final report (which was attached at Appendix B) was very positive, with ‘substantial assurance’ that there was effective controls and a robust framework in place for the collection and allocation of Section 106 contributions. He said that this was the highest grading and that only one ‘low priority’ recommendation was noted – a checklist for the Section 106 Programme Manager to use, and that this had been implemented.

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

Councillor Deering asked for clarification of a how relatively low number of contributions were ‘unallocated’. 

The Section 106 Programme Manager said that contributions were technically ‘unallocated’ if they did not have a specific project named within the agreement’s wording. She referred to page 8 of the IFS which gave a breakdown of each individual ‘unallocated’ allocation and gave detail on how work was being undertaken with colleagues and Parish Councils to identify projects for these contributions. 

Councillor Deering asked if Town and Parish Councils could apply to East Herts for Section 106 monies.

The Section 106 Programme Manager said that normally they could not as Section 106 contributions were tied to major developments in an area. She said that work was undertaken with both the Planning Department and Town and Parish Councils to establish what facilities local communities wanted.

The Section 106 Programme Manager said that she was keen however to hear from Town and Parish Councils, to understand what was occurring in their areas and to enable a list of potential projects to be made. 

Mr Poppy asked if there was a time limit for contributions to be spent.

The Section 106 Programme Manager said that there was a time limit, which was normally ten years, but some agreements had a five-year limit written in. She said that she had an ongoing monitoring programme, and that to date no contributions had been given back. 

Mr Sharman said that he thought the report was excellent and provided clarity. He asked if the monitoring fees covered the costs of the council’s administration.

The Section 106 Programme Manager said that the fees (£300) were set several years ago and were not sufficient to fund the work done. She said that benchmarking against other local authorities was being undertaken, with the potential for fees to be increased or percentage charged being considered.    

The Chair asked if it was just East Herts Council who were involved with the allocation of contributions.

The Section 106 Programme Manager said that technically no, as draft agreements and projects were worked on collaboratively with Town and Parish Councils and community groups (for example, sports organisations) to identify their wants and needs.

Mr Poppy asked if there were ever instances of failure to collect contributions.

The Section 106 Programme Manager said that to date, failure to collect contributions had never occurred. She said that such failure came close with one insolvent developer but work with the council’s legal department ensured that contributions were paid. 

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

RESOLVED –that the ‘2023/24 Infrastructure Funding Statement’ (Appendix A) and the SIAS Internal Audit Report (Appendix B) be noted, and any comments given to the Section 106 Programme Manager.