Agenda item

Report of the Director of Place and Sustainability to update the Committee on the Council’s Section 106 (s106) policy and guidance, s106 agreements signed and administered between 2005 – 2011 by the Planning, Regeneration and Economy Service and the distribution of the s106 funds received by the Council.

Marc Dorfman, Assistant Director, Planning Regeneration and Economy, presented the report on the Council’s s106 policy and guidance, s106 agreements signed and administered between 2005 -11 and the distribution of the s106 funds received by the Council. Of the approximately £13m received, around £3.7m remained unspent, of which £0.7m related to monitoring activity. Mr Dorfman advised that there were currently two sites of significant concern, Winns Mews and Markfield Road, totalling around £138k, and that the possibility of legal sanction was being explored in these instances. A number of other schemes which were close to their payment deadlines were also being monitored, totalling around £300 – 400k.

The following points were raised in discussion:

• Mr Dorfman would check the length of time the schemes at Winns Mews and Markfield Road had been given for the payment of the s106 monies owed, and would report this back to the Committee.
• It was confirmed that £7.7m was owed in respect of Hale Village, of which the majority was outstanding. Mr Dorfman reported that the renegotiated s106 agreement was close to completion; the signature of this would trigger an immediate payment of £3.2 – 3.5m, with the rest to be triggered at further points during the development. The s106 agreement had been brought back twice to the Planning Sub committee for revision, and it agreed that this was unusual. The revised agreement for Hale Village was scheduled for completion in March 2012, and it was felt unlikely that this date would slip.
• Concern was expressed that the recent decision in respect of Spurs might set a precedent for other large developments, such as Hale Village, and that in agreeing to renegotiate the s106, the Council had appeared compliant in accepting reduced contributions. Mr Dorfman advised that it was a balance; if a hard line were taken and the construction on the site was closed down due to non-payment, then there would be no chance of recovering the monies owed. Where issues arose with a development that had previously been considered appropriate for permission, for example as a result of a decrease in land values, it was reasonable that renegotiation of the s106 be brought to the Planning Sub Committee for consideration. Mr Dorfman advised that the Spurs decision was not a precedent for other schemes.
• Mr Dorfman agreed that he would check the date after which LVE could appeal the s106 obligations in respect of Hale Village, and would report this back to the Committee.
• The Committee asked about education formula; Mr Dorfman advised that this was a detailed formula based on child yield predictions, calculated by a mathematical model which linked in with other boroughs. It was agreed that the formula would be sent to Cllr Schmitz for information.
• Mr Dorfman reported that a legal agreement had been signed in respect of the Wards Corner development, but no money had been paid over as consent had subsequently been overturned and any contribution had therefore not been triggered.
• It was agreed that a training seminar on the Community Infrastructure Levy would be held for Committee Members.
• Mr Dorfman agreed to check that no figures were double-counted by being included in categories for both ‘not implemented’ and ‘value negotiated / received’, but advised that significant effort had been made to ensure that figures were not double-counted in the report.
• The Committee noted the scale of the concessions made in respect of the s106 for the Spurs development, when compared against the total s106 receipts as outlined in the report. It was reported that Spurs was an unusual scale in comparison with other sites in the borough, and must be considered in the context of the associated investment.
• The Committee asked about the education component in wards such as Highgate, where there were significant areas which were not within the catchment area for Haringey schools. Mr Dorfman reported that it was general practice not to transfer any s106 payments to other authorities, although an agreement had been made in respect of the Spurs application for a contribution to be made to Enfield. Haringey was also working with Enfield to look at the distribution of s106 contributions between the two boroughs in respect of proposed residential developments situated north of the North Circular. It was confirmed that education contributions were distributed across the borough, on the basis of need.
• In response to further discussion around Hale Village, and why the Council should not take a firmer stance, Mr Dorfman reported that this was an option, but that legislation afforded developers the opportunity to argue their case in respect of s106 agreements and viability. Mr Dorfman reported that it was important that, once a scheme had been identified as valuable, the planning authority made efforts to bring that development forward. With regards to Tottenham Hale, an approach requiring a developer to take a significant loss by meeting s106 contributions agreed under different economic conditions could have longer term impacts on land values and regeneration reputation in Tottenham Hale.
• The Committee asked about overage in respect of Hale Village, and Mr Dorfman reported that whether overage payments would be triggered was dependent on the wider economic position and the national and London property market.
• The Committee suggested that a land charge should have been considered at Hale Village in order to ensure that the Council received payment at the point when the sale of blocks had been completed. Mr Dorfman advised that issues around viability at Hale Village had been looked into, and that such a land charge would have impacted on the developer’s ability to borrow. It was agreed that Mr Dorfman would look into the suggestion that land charges be considered in respect of future developments and report back to the Committee regarding this issue.
• The Committee was advised that, were there significant further delay in contributions being made in respect of Hale Village, or payment trigger points reached in the development without the developer advising the authority, then a position would be reached where an enforcement approach would be necessary.
• It was noted that Hale Village was providing affordable housing in addition to the s106 payments due, which did offer the Council savings on its temporary accommodation budget.
• It was agreed that Mr Dorfman would provide all Committee Members with an update on the position in respect of the Hale Village development, the s106 agreement for which was due for signature in March 2012, triggering an immediate payment of £3.2 / £3.5m

RESOLVED

That the content of the report be noted.