October 23 2014 Latest news:
By Amie Keeley
Friday, November 23, 2012
CALLS have been made for a major overhaul in how planning gain cash is spent after figures reveal councils in north Essex are sitting on more than £9million of unspent section 106 funds.
They were made by a senior councillor at Colchester Borough Council where around £6.6m is yet to be used on local infrastructure projects.
Figures obtained by the East Anglian Daily Times through a Freedom of Information request shows just over £20m has been received through combined 106 agreements with developers at Tendring, Braintree and Colchester councils in the last ten years. So far, around £11m has been used.
In Colchester, the borough council received £13.4m and has spent £6.8m.
Section 106 agreements relate to money paid by developers to local authorities to off-set the impact of a new development. The money could be earmarked for new road improvements, play areas or schools, which are built after the development is completed.
In most cases, the money can only be used in the area where the development is being built, therefore a council cannot freely transfer 106 money from one project to another.
Colchester Borough Council’s portfolio holder for business and resources, Paul Smith, said: “The current system is very inflexible. We need a system where the council can spend 106 money on major infrastructure in advance of developments.
“In other cases it may be better if the council and the developer agree a fixed amount of cash per house, as opposed to agreeing a type of project.
“What we may have agreed to use the 106 money on at the outset, such as a play area, may well change three or four years down the line when the project is finished. When this has happened, we have had to renegotiate with the developer and this slows things up.”
He said work on a number of projects, inlcuding an outdoor gym area in Castle Park and a new village hall in Great Horkesley, are due to be carried out using some of the 106 money.
He added that when a council is looking to start a big infrastructure project, such as a bypass, they often have to wait until there is enough money from a number of a developers in a particular area, before it can go ahead.
However, Peter Halliday, Tendring District Council’s (TDC) finance chief, said he was “ happy” with how 106 agreements currently work.
He said: “I think it’s about how clever you are with the developers - we try to box clever and make sure we get what we want at the outset.
“I’m happy with the current system and as far as we’re concerned our needs shouldn’t change from the time we sign the agreement to when work begins on a particular project.”
TDC has received £2.4m in ten years and has spent just over £1m.
“We have a good turnover of projects so it’s not stagnant money.”
In Braintree, the district council has received £4.6m over the same time period and spent £3.3m so far.
A spokeswoman said: “The time it takes to deliver projects with 106 money can depend on how quickly we can obtain the relevant consents or what restrictions might be in place.
“In some cases two or three contributions from different developments are needed for the Council to be in a position to deliver a project and we need to ensure the total funding is secured before we can start work.
“We are currently working on over £520,000 of projects funded from section 106 contributions for the benefit of the community, ranging from additional play equipment and cycle paths to art sculptures and town centre improvements.”