Leicestershire County Council to examine how to prevent unspent cash being handed back to developers

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The leader of Leicestershire County Council has vowed that the authority will no longer return unspent cash to developers after it was revealed that nearly £900,000 in contributions has been handed back.

Conservative Councillor Nick Rushton has called for a review into the way section 106 agreements are made.

It comes after the Local Democracy Reporting Service submitted a freedom of information request, asking how much of the money had been given back to developers.

Section 106 contributions are paid by developers to local authorities when planning permission is agreed, to offset the impact of local developments.

Cllr Rushton told the BBC Local Democracy Reporting Service: “We returned £0.9 million of the £42 million we received, which is round about two per cent.

“While it is a small amount overall, we don’t want to be returning any money.

“Going forward, we will not be giving any money back and will be making sure we get more from developers.

“We need to maximise what we get in terms of infrastructure and other areas.”

Local health care, schools and community projects have all benefited from cash given by developers to the council to offset the impact of new developments. Money has also been given towards bus passes.

In the Harborough area, cash handed back to developers includes:

- Warwick Road, Kibworth – £324,000 – Arriva took the decision to route a commercial service through estate meaning section 106 money was not required. Some of the section 106 cash was used towards subsidising a Centrebus service.

- Farndon Fields, Market Harborough – £260,288 – Internal roads were not ready to facilitate the provision of bus service the money was for due to development not being rolled out at the expected rate. The council was denied an extension on agreed time.

Cllr Rushton said that the council needed to come up with new ways of using developers’ cash to the benefit of the area.

He said: “Bus pass contributions just aren’t tenable.

“We’re saying, let’s stop asking for bus passes, we’ve seen that people don’t want them because that’s where we’ve had to give money back.

“Instead, let’s ask for contributions that will assist us with providing adult social care for example, sheltered housing or transport schemes for elderly people.

“In terms of children’s care, we’ll look to ask for a ‘family home’ on the new development. We’ve got plenty of people willing to foster children, let’s provide them with a family home suitable to do that.”

Cllr Rushton explained that since the freedom of information response revealed the amount of cash returned, officers have looked in more detail at the reasons behind cash not being spent.

A report prepared for cabinet members gives a detailed overview of why and when returns were made.

The largest return was in relation to an estate on Warwick Road, Kibworth. Some £324,000 was sent back to the developers after bus operator Arriva took the decision to provide a commercial route in the area, meaning the money, which was meant to subsidise a service, was no longer required.

Some £260,288 was sent back to the developers behind the Farndon Fields estate in Market Harborough after internal roads on the estate were not ready to facilitate a bus service because development was slower than expected. The council asked for a time extension but the developer refused.

No or limited take up of bus passes accounted for £224,668 of the total amount sent back. The largest return was in relation to the Montgomery Road development in Earl Shilton. The cash, totalling £82,941, was returned in 2015/16.

Cllr Rushton said that a problem was that the county council was not the planning authority. District councils deal with section 106 agreements.

On Friday, July 6, cabinet members will look over proposals designed to stop section 106 cash not being spent.

One of the ideas floated in a report for the meeting is to extend the time frame given to spend the cash from five to 10 years.

The council is also exploring if it could write in potential extensions if projects are not completed on time.

Leicestershire County Council leader Nick Rushton admitted that there are issues with the system.

He said: “Allegedly, developers can be very crafty. The bus passes have been available and if you go into the show home and ask about one you will be told, but it’s not something many people take up and developers do know that.”

The interim report will be discussed at the meeting. A more in-depth follow-up report is already being worked on for the September meeting when the issue will be revisited.

Cllr Rushton said: “Going forward we want to explore and come up with innovative ways that we can make these agreements work for us.”