North Somerset Council
1. Summary of Report
The Working Group had conducted an investigation into section 106 agreement practice within North Somerset with the aims of improving the process for establishing agreements and to ensure that these resources are used effectively. The Working Group has drawn up 11 specific recommendations and this report comprises the response to those 11 recommendations.
Section 106 agreements derive from legislation and national guidance. At local level the finance and other assets procured from agreements assists in achieving sustainable development providing for the needs of the growing community and therefore make a significant contribution towards the Councils goals as set out in the Corporate and Directorate Business Plans. The North Somerset Replacement Local Plan contains policies to support the use of s106 agreements including –
Policy GDP5 – contributions for infrastructure and other planning requirements securing mitigations
Policy GDP6 – future use and management of land
Policy H4 – affordable housing
Polcy CF/1 – contributions for cultural and community facilities
Policy ECH11 – bio-diversity – off site compensation for habitat loss
Policy T10 – transport – safety, traffic & provision of infrastructure/services.
Any decision upon the recommendations of the Working Group needs to be considered in the context of potential national changes. Following the demise of the Planning Gain Supplement the Government now propose a Community Infrastructure Levy which will allow local authorities to apply a levy to all new developments in their area, subject to a low de minimus threshold.. Part 10 of the Planning Bill laid before Parliament will provide the Secretary of State with the power to make regulations to impose a levy. The detail will be in the regulations made but the purpose of the levy is to ensure that the costs in providing infrastructure are funded (in whole or in part) by the owners of the land. A report upon the use of tariffs in North Somerset will have been considered by the Executive on 11 March 2008.
The current system of planning obligations permits local authorities to seek contributions from developments to mitigate their impact and the requirement for a contribution to meet all the tests in Government Circular 05/05.
It is important that all are very clear about national Circular advice on when S106 agreements apply. There is unfortunately a perception that shopping lists of problems and projects can be brought forward none of which may be relevant to the development being proposed.
Great care is also needed to eliminate any perception that planning permissions can be bought/sold.
In addition there is national guidance on best practice. For example the 2006 Audit Commission publication ‘securing community benefits through the planning process’ and DCLG Planning Obligations: Practice Guidance” also of 2006. These are highly relevant background papers to be taken into account in any review and it is not clear that the Working Party has taken this best practice into account. The responses to the recommendations in section 2 of this report take this guidance into account.
So, whilst fine tuning existing arrangements is a reasonable proposition more structural changes should be approached with considerable caution.
2. The 11 detailed recommendations –
Working Group recommendation 1
That the process of establishing s106 agreements be modified to include more significant Member involvement at the earliest stage. In particular s106 reports be made available to the respective Area Committee ;
a) whenever substantive discussions with developers commence on major applications;
b) when a Heads of Agreement document is prepared by, or received by, Officers;
c) When a s106 is signed so that Members can be involved at an appropriate stage and before the Masterplan is drawn up.
Executive response 1
If Members should become directly involved in pre application discussions upon possible s106 agreements then a caution is appropriate. It is quite possible that a Member could subsequently find himself or herself in an invidious position with his or her ability to act in an open manner somewhat fettered. .There is a case for considering a protocol that would enable early member involvement within a framework that does not fetter their decision making role.
The Local Government Association have published a paper on member engagement in planning matters . The document encourages member involvement at pre-application stage but highlights the need for members to be aware of impartiality and the dangers of blurring discussions and negotiations.
It is important for Members to appreciate that the Council’s planning policy documents are critical in determining what planning obligations can be sought and have regard to other published documents. All in addition to following Circular 05/05 as already mentioned.
In some circumstances developers may ask for commercial confidentiality to be respected as well.
This recommendation could be a material change with resource consequences unless approached in a very structured manner. It is recommended that the proposals in recommendation 8 will fulfil this requirement together with existing encouragement for early contact between the developer and Town and Parish Councils. This should be the primary route for the developer to get a feel for what the local community wants. It is not possible to commit officers to meetings with the Town and Parish Councils each and every time a development has an infrastructure impact. In addition it is recommended that local Members be briefed upon proposals at the pre application stage so that they can feed to Officers any requirements they feel should be considered for inclusion within a s106 agreement. A protocol would need to be established for this designed around the tests of Circular 05/05.
These proposals would of course involve the appropriate Members.
Rec 1B – this is done now – Area Committees are advised of heads of terms.
Rec 1C –A quarterly report simply scheduling agreements completed in that period could be presented to the Area Committees.
Working Group recommendation 2
Presentation to be given to Town and Parish Councils to enable them to engage with the s106 process. The presentation should cover the process of 106 money agreement and how Councillors will be involved.
Executive response 2
This is in hand – presentations have been made to Portishead, Weston-super-Mare Town Councils and representatives of Nailsea. However this recommendation, which in its initial form, referred to Town Councils only now embraces Parish Councils. Work would need to be prioritised according to those parishes or towns where major development is planned in the Local Plan and even then this will create a serious resource issue.
Care needs to be taken not to blur boundaries of responsibilities and the possibility of conflict of interest issues between the district and the town and parishes must also be born in mind.
It is recommended that presentations be given when the tariff system begins to become operative, initially to ALCA and then to major Town Councils.
Working Group recommendation 3
That each s106 agreement has a plain English cover to give the overview of the agreement – this should be reported back to Area Committees as well as Town and Parish Councils.
Executive response 3
Agreed provided this no more than an index and anyone who needs the story behind the agreement must refer to the case file. This could be the heads of terms as described in the report for determination.
Further than this creating a plain English version would double workload and would have implications for interpretation. Matters are complex and cannot always be expressed in day-to day language without losing some of the watertight legal meaning.
How agreements are worded has changed over the last few years and have become more user friendly and language simplified. Including an index at the beginning of the agreement allows persons to easily navigate their way around.
Working Group recommendation 4
That a database be established and maintained to catalogue and monitor the 106 agreements.
Executive response 4
The database has been designed installed and is undergoing testing. Whilst based upon a database developed by Colchester Borough Council aided by the Planning Advisory Service it develops and enhances this to suit our needs However it is important to note that there will be a time lag before it has sufficient data to be of value in use.
It should be noted that there is some confusion of a semantic nature. Presently financial 106 data is recorded in spreadsheet format – this has been referred to as a database.
Working Group recommendation 5
106 agreements should be grouped and conceptualised by area, similar to the planning process. That where appropriate and legal data to be shared between North Somerset Council Directorates in order to inform and update contributions
Executive response 5
If the first part of this recommendation means grouped by Area Committee then the database will enable searches to be made with that criteria. As to the second part this will be one of the positive benefits of the database.
Working Group recommendation 6
Management reports on status should be issued to Area Committees. This should be built in as part of the initiation of the database with controls that flag any pending agreements that close expiry dates.
Executive response 6
Agreed on the basis that this is a simple flag up of current Sect 106 schemes and progress.
If status means progress towards triggers and securing an agreements provisions/requirements the database will assist with this but see the next paragraph.
The database will contain a series of standard reports. What is presented to Area Committees will need to be carefully managed otherwise they could be swamped with unnecessary information. Unless it is one of the standard reports however there will be resource implications.
Working Group recommendation 7
Using the database there should be a better approach to maximising resources in dealing with all types of project to identify any scope for improvements.
For existing agreements investigation should be undertaken to identify whether there are any duplications where different contributions are unnecessarily covering the same scheme.
If necessary approaches be made to developers for use of their contributions for a different need.
Executive response 7
With regard to the first part of this recommendation it should indeed be the case that the database will be a useful tool for colleagues with responsibility for using the contributions. So the database should help resolve these issues but the database will be an aid, it can only do so much it will not be a panacea.
The second part of the recommendation is noted but it would be surprising if we have duplicated any obligations and if so it may only have the result of covering increased costs anyway. All planning obligations should comply with Circular 05/05 as previously stated and unnecessary and/or duplicate contributions should not occur.
Also noted is the addition made by the Finance and Performance Policy and Scrutiny Panel.
Where there has been a material change in circumstances then approaches have been made to developers to see if it is possible to redirect an obligation. However it is important to be aware that the Council cannot direct change it can only be achieved by negotiation. In any event contributions should be based upon strategic programmes of the Council and members should also be asking if these programmes are fit for purpose? Caution is thus needed, planning policies and circular must always be borne in mind and any variation to the principle agreement should be by deed to accord with s.106 of the Act.
Working Group recommendation 8
Develop a community priority list for each ward comprising of possible schemes or needs that can be used in the negotiation of the s106 agreements.
Executive response 8
Please note the comments made under recommendation 1. This is a positive recommendation and an excellent opportunity for Town and Parish Councils to consult with their communities to develop their own priorities. This is the best way of picking up local issues PROVIDED the local community understand that there are “rules” about what can be sought. Parish Councils should be encouraged to use the Parish Plan process to inform on community needs perhaps with a summary list provided as input to Officer considerations.
However PCs must understand restrictions and criteria. It would be for North Somerset Council to then determine whether contributions towards such aims would be legitimate in s106 terms. The requirement for a planning obligation must accord with published planning documents and the Circular as previously stated. Also it is very important that local needs are considered in the wider strategic context.
It also needs to be clearly understood that circumstances may well arise where e.g local councils wishes are in conflict with those of the District Council. In particular this is an issue where both councils may provide e.g Public open space and wish for different projects to be funded.
Finally in the recommendation it would be better if to the word ‘ward’ is added ‘parish’ .
Working Group recommendation 9
In the initiation of new s106 agreements consideration should be given to engaging a staff resource in order to ensure the correct spend of the agreements.
Executive response 9
Streets and Open Spaces are considering options now in respect of contributions already committed. For the future consideration needs to be given as to whether contributions sought should be increased by a percentage – this will need to be very clearly defined not least to ensure that the parties to an agreement can be satisfied that the extra contribution will be used for the stated purpose within that particular agreement.
Agreements already build in supervision fees for highways and open space. This may well need to be developed into a more robust arrangement . considering funding for the feasibility, development, procurement and supervision of schemes - all of these should be covered.
Working Group recommendation 10
Thought to be given to the terms of the s106 agreements at conception to allow where appropriate the greatest scope for use.
Executive response 10
This is already done. Within the rules of s106 officers will always try to achieve flexibility case by case. For this to be more structured however the Council may need to review or develop its different needs analyses to ensure that we secure contributions towards pre planned objectives.
Working Group recommendation 11
That in the event of there being insufficient internal human resources to undertake/administer certain 106 agreements and when time is of the essence we should look to hire external suppliers to undertake and manage that work providing the cost is contained within those specific s106 budgets.
Executive response 11
Noted and please see comments made under recommendation 9.
It is unclear at this stage whether the new tariff system may make this easier in the future. Consultation upon the Community Infrastructure Levy is due in autumn this year.
5. Financial Implications
S106 agreements have major financial implications. Over £11m in contributions are currently held and a further sum in excess of £6m is due from completed agreements
6. Equality Implications
7. Corporate Implications
8. Options considered