To receive a report which explains the background to developer contributions, how contributions are calculated and collected for the Council and how these are then used.
Nigel Smith (Head of Development) was in attendance for this item.
1. Mr M Dance (Cabinet Member for Economic Development) introduced the report that set out developer contributions, the process used to calculate and collect developer contributions; and the final stage in terms of how they were then used.
2. Mr Smith said that there were a number of challenges and constraints within the context of the national legislation on Planning Policy which made it more difficult to secure developer contributions. The first issue was that s106 contributions were entirely predicated around capital provision for infrastructure and could not be applied as revenue; the second was in relation to viability whereby the developer would make a case to the Planning Authority that they could not afford which Kent County Council would then have to risk manage through viability assessments, a deferral or overage of payments or where appropriate a shared use of space; and the third issue was in relation to the existing Community Infrastructure Levy which limited the number of development contributions to five. Whilst Kent County Council had been successful in limiting the impact of the pooling restrictions through the delivery of projects in multiple phases, Mr Smith said that the Government was due to be making an announcement later in the year which proposed an amendment to the regulation to remove the pooling restriction.
3. Mrs Prendergast (Member for Maidstone Rural East) attended the meeting and expressed her concerns regarding developer contributions, specifically in relation to those Districts that had adopted the Community Infrastructure Levy (CIL) charging schedule. The Maidstone district was forecast to see 10% of the projected growth during the plan period up to 2031 and potentially a further 7,000 new homes as part of the local planning review which would total 50,000 new residents who would need access to a number of services. Mrs Prendergast read aloud a letter that had been written by Maidstone Borough Council which said:
“The Council forecast of the expected cost of the required infrastructure to support growth in the plan period would be circa £100 million. The infrastructure delivery plan identified other funding resources such as Local Enterprise Partnership money (and KCC) to assist in financing this requirement where there remains a gap of £38 million. The adopted CIL rates in the Maidstone Borough Council charging schedule could generate net receipts of around £19.8 million to go towards reducing this gap. It has never been estimated that CIL would fund the whole of the infrastructure required.”
Mrs Prendergast said that where it was a statutory requirement for Maidstone Borough Council to produce the infrastructure, she sought clarification as to where the Kent County Council funding element would be coming from to fund the financial gap as there was no commitment to provide capital investment for new developments. A particular issue remained around the governance of planning decisions as Kent County Council were not involved in the meetings where those discussions were had by the District Borough to prioritise planning applications. In light of the aforementioned issues, Mrs Prendergast sought clarification as to how Kent County Council would manage the risk to its budget.
4. Officers responded to comments and questions and follows:
(a) Mrs B Cooper (Corporate Director of Growth, Environment and Transport) addressed the issues raised by Mrs Prendergast and agreed with the compelling difficulties presented by s106 contributions and CIL, however, she informed the Committee that regardless of Kent County Council’s position as the Upper Tier Authority, the Statutory Highway Authority and provider of school places, it did not have a place at the CIL table with the Local Planning Authority. Mrs Cooper said that she had taken advice from the Queen’s Council regarding Kent County Council’s role in those discussions around CIL, however, the advice received was that Kent County Council’s involvement was not permitted. She informed the Committee that all local authorities (including those with CIL) still had access to s106 contributions for their large developments as it was easier to manage, however, the disadvantages of CIL for Kent County Council was that it was prohibited from insisting on expenditure for a particular item but would hope that the Local Planning Authorities prioritised the need for school places. Mrs Cooper assured the Committee that the Cabinet Member for Children, Young People and Education worked in conjunction with the Local Planning Authority to help determine the number of additional school places required in every district, the ongoing issue however, was that whilst developers were keen to fund primary schools, they did not want to invest in secondary schools which could cost up to £36million. Due to the restriction of the Governments five pooling regime, Kent County Council lost £4million towards its education provision, however, to mitigate the risk of losing any further investment, it did review the planning applications to ensure contributions were secured for larger scale developments. Mrs Cooper assured the Committee that whilst Kent County Council worked within a difficult set of parameters, it did work closely with Local Planning Authorities, in particular with Dartford where there was a joint governance board to review the allocation of CIL, as well as finance and infrastructure colleagues to ensure that funding was available at the right time for developments. Mrs Cooper also said that there were instances where Kent County Council forward funded developer contributions and recouped the money via the Roof Tax.
(b) Mr Smith confirmed that the s106 contributions could be used to capitalise a revenue funding stream, however, this was limited to bus service subsidies and recreational community centres.
(c) Members queried the Government’s initiative of allowing London Boroughs to transform office spaces into apartments without being granted planning permission and the impact that would have on local services. Mrs Cooper assured the Committee that s106 contributions that were managed by Kent County Council were closely monitored and audited to ensure they were used for the exact purpose that they were collected for. Mrs Cooper said that jointly signed s106 agreements between the County Council and the District Councils had been consistently sought, however, it remained an outstanding issue that required further work. In response to the conversion of office/ commercial space into residential space, Mr Smith confirmed that this was permitted as part of the Government’s initiative to increase housing numbers and to expedite the planning system. The district and borough Local Planning Authorities had taken a more practical approach and took account of the viability before agreeing to housing developments.
(d) In response to the calculation of book stock for library dwellings, Mr Smith agreed to review this query outside of the Committee and report directly back to the Member.
(e) Mrs Cooper agreed with Members comments and said that the s106 and CIL regime had inherent flaws and did not work in two tier authority areas. She also assured the Committee that the Leader of Kent County Council had rallied against the Governments restriction of the five-pooling scheme at a number of forums including at the Ministry of Housing, Communities & Local Government.
5. The Chairman invited Mrs Prendergast to respond to the comments raised by the Committee.
(a) Mrs Prendergast concluded by thanking Members for their comments which provided a useful insight into some of the major concerns reflected in Maidstone Borough Council around s106 and CIL agreements and the necessity for greater monitoring of developer contributions until changes had been made by central government.
6. RESOLVED that the report be noted.