Agenda item

Resolved:

The Committee will receive an update on Section 106 spending once schemes have been realised and further details on how S106 monies received from the scheme have been spent.

John Miller (Head of Planning) introduced the report and highlighted the following information:

·         Planning obligations, also known as Section 106 agreements (S106) are mitigation for development not accounted for through a planning condition on the planning permission.

·         The Community Infrastructure Levy (CIL) allows local authorities to raise funds from developers to fund a wide range of local and strategic infrastructure that is needed to support growth and development. CIL will provide developers with more certainty up front about how much money they will be expected to contribute towards borough infrastructure needs and is a sum per square metre of the development.

·         The Mayor of London has own infrastructure levy, which is set at £35 per square metre in Lewisham. Developers must pay this levy before paying the Lewisham CIL.

·         Larger sums from S106 agreements have recently come in, which has increased the amount held by the Council. These larger sums can be used more strategically for projects. There is a need to co-ordinate S106 and CIL monies with the capital programme of the Council more closely.

In response to questions from the Committee, John Miller provided the following information:

·         The CIL rates were discussed extensively before going to Full Council for approval and will be adopted in April 2015. Some other local authorities have a Category C rate of £0 per square metre as Lewisham does and the rate has been set at this level to encourage jobs to the borough.

·         Some local authorities have complex matrices of uses and locations to decide CIL rates. For example, Wandsworth has a matrix that includes a rate in excess of £300 per square metre in the Nine Elms development area.

·         The S106 sums for the Convoys Wharf development have been set by the GLA and are set out in their report.

·         There is no specific requirement to consult with local communities on allocating S106 funding, however officers are discussing with local communities and local assemblies about how to spend some of the funds allocated for community and leisure facilities.

·         There is more flexibility in CIL about how it can be spent as there are not the same controls on where it has to be spent as there are for S106.

·         If the developer cannot pay the CIL then the development cannot go ahead and CIL is not paid until the development commences.

·         There is a S106 steering group made up of officers that lets people know what funding is available, so that the Council can better match the funds with needs.

·         A S106 agreement may have funds that come under a number of different headings, the funds must then be used for that specified purpose. For example, one heading could be funding for schools to mitigate the impact of new population. S106 money must be spent in the geographic area specified in the agreement.

·         Significant funds from large developments in Deptford and New Cross are just starting to come through and there is more to be released as phases of the developments are completed. The S106 for Convoys Wharf has a series of headings and will be spent locally.

·         Review mechanisms around affordable housing have been introduced to some schemes. These came in at the time of the economic downturn and specify that if residential units achieve a certain level of sales value then more affordable housing can be added in later phases. These are reviewed and agreed as the phases come forward but developments being implemented with these agreements are still in their early stages of delivery.

·         Larger schemes will be financially reviewed at each phase, as these have outline permission. This should make it transparent where additional payments for S106 agreements are due.

·         Historically the relatively low level of development meant that S106 produced a small amount of funding annually at a time when public sector funding was in good supply. Now larger sums are coming forward at a time of public sector constraints in budgets, so officers are exploring how to better use S106 money.

·         Some activities are funded through S106, such as employment and training and it is possible to expand activities funded by S106 money, for example funding project management costs. However it is not possible to carry out large scale budget substitution of existing Council posts and functions with it.

The Committee then discussed the following issues:

·         The public can have the perception that S106 agreements are payments to ‘buy’ the support of a Planning Committee, even though the clear rationale of mitigation is set out in the planning reports.

·         The success of S106 agreements should be made clearer and publicised. This will enable councillors on planning committees to see the impacts of the agreements and so that local people can see the benefits for their local areas.

Resolved:

The Committee will receive an update on an example of Section 106 spending once a suitable scheme has been realised and further details on how Section 106 monies received from the scheme have been spent.