Infrastructure Funding Statement 2019-20

INFRASTRUCTURE FUNDING STATEMENT 2019-20 Review of Section 106 Planning Obligations 2018-19 and 2019-20 SCARBOROUGH BOROUGH COUNCIL Planning Services 1 1.0 INTRODUCTION Levy Regulations 2019. All LPAs must publish an annual report 1.1 Section 106 of the Town and Country Planning Act 1990 covering both CIL and S106 obligations regarding the monies allows Local Planning Authorities (LPAs) to impose restrictions or secured, received, held and spent, as well as provision of certain requirements on land, including the payment of monies towards on-site infrastructure, such as affordable housing. This is the first infrastructure or securing affordable housing. Collectively, these such IFS and complies with the requirement to cover the financial are known as planning obligations and may take the form of a year 2019/20 (1st April 2019 to 31st March 2020). To provide Section 106 (S106) agreement between a developer/landowner, continuity from previous Section 106 Monitoring Reports prepared the Council and possibly other parties, or alternatively, a unilateral by the Council, it also covers 2018/19. undertaking providing a legal commitment by the developer alone. 1.5 This IFS in effect replaces these Monitoring Reports which 1.2 Obligations form part of a planning permission, but are only have been regularly published by the Borough Council since the used when planning conditions are unsuitable, because of their early 2000s. These were not a statutory requirement, but it was complexity and the delay they can add to the planning process. considered best practice to assist with transparency in the Since 2010 it has been a legal requirement that that planning planning process. These reports largely covered the same issues obligations may only constitute a reason for granting planning as the IFS. They included a comprehensive list of all ’live’ permission for the development if the obligation is: - individual S106 obligations securing infrastructure or payments in its place, together with a short commentary on the current status. (a) necessary to make the development acceptable in planning Although not a specific requirement of the IFS, we have continued terms; with this practice and this information can be found in Appendix A. (b) directly related to the development; and (c) fairly and reasonably related in scale and kind to the 1.6 This Statement only relates to those S106 obligations for development. which Scarborough Borough Council (SBC) is legally responsible for ensuring compliance. In accordance with the 2019 Regulations, 1.3 The 2008 Planning Act made provision that most financial the data in this IFS therefore does not cover S106 obligations contributions could be secured by the Community Infrastructure applying to land in the Borough in the following cases: Levy (CIL) and it was the government’s intention at the time that this would become the usual means of securing funding for off-site (A) Where the North York Moors National Park Authority is the infrastructure (excluding affordable housing). Scarborough LPA. Borough Council ultimately decided not to introduce CIL, since (B) Where North Yorkshire County Council (NYCC) is the LPA across much of the Borough it would not be viable. Indeed, this (e.g. mineral and waste applications) has often found to be the case in parts of England where (C) Where SBC determined the planning application, but where developer profits are more marginal, and S106 obligations can be NYCC is signatory of the S106 to the effect that it is directly more sensitively adapted to such market conditions. As a result, responsible for compliance — this mainly relates to certain both processes continue to co-exist across the country. highway payments. (D) Section 278 Highways agreements between the developer and 1.4 The publication of this Infrastructure Funding Statement (IFS) NYCC. is a legal requirement arising from the Community Infrastructure 2 1.7 Those obligations falling in Category C above were previously 2.0 OVERVIEW OF PLANNING OBLIGATIONS reported in monitoring reports and where appropriate they are referred to in the commentary, as well being listed in Appendix A, 2.1 Table 1 below provides a summary of the key S106 but they are not included in cumulative figures. obligations for the year 2019-20. These largely cover the figures which IFSs are specifically required to publish. It is appreciated 1.8 Section 2.0 of this Statement provides a brief overview of that in isolation that these figures may be difficult to interpret. S106 obligations. The remaining Sections 3.0 to 8.0 consider in Hence, the remainder of this statement seeks to provide context greater depth the key areas where funding or infrastructure has and more detailed explanation. been secured, namely for affordable housing, green space, education, transport, health and miscellaneous/other. These Monies Secured and Held sections are then structured around the different stages of the S106 process from securing the monies through to expenditure, 2.2 Figure 1 on the following page provides an overview of current largely based on the categories identified in the 2019 CIL financial S106 obligations as they stood at the end of March 2020. Regulations. It does not cover infrastructure secured by obligations and constructed by the developer, such as on–site affordable housing or open space. If the monetary value of such items were to be Table 1 - Overview of Section 106 Financial Contributions 3 Figure 2 Figure 1 iii. Monies which have been paid, but have not been committed or included it would significantly increase the net worth of S106 allocated to be spent on a particular project (grey). contributions. It also does not cover money which has now been iv. Monies which have been paid and have been committed or spent. The majority of sums are secured from residential allocated to be spent on a particular project (yellow). development and in accordance with national and local planning policy these largely relate to schemes of 10 or more dwellings. 2.4 Figure 2 above shows the total sums from Figure 1, re- expressed solely as a percentage of the total potential worth of the 2.3 The bars on Figure 1 show the main types of infrastructure as obligations which stood at £8,206,087. covered by Sections 3.0-8.0 of this IFS. Each individual bar is then subdivided according to the stage the obligations have reached. 2.5 The 61% which has not been triggered (£5,055,917) should These are as follows: be treated with some considerable caution. It is likely that a proportion of this will never be collected. The principal reason for i. Monies which have been secured by s106 obligation, but where this is the fact that not all planning permissions are implemented the trigger point for payment has not been reached, e.g. before expiring, normally after 3 years if not started. In other cases commencement of development or occupation of 50% of dwellings development may stall before the trigger point for payment is (blue). reached. This is slightly offset by the fact that where the payment ii. Monies which the Borough Council has billed, but have not been is triggered months or years later, then indexation is usually liable. paid (orange). On outline planning permissions it should also be noted that some 4 of the figures are estimates at this stage. 2.10 Table 1 also does not include Section 106 monitoring fees, to cover associated administration costs to Planning Services. In 2.6 The total amount of S106 sums held by the Borough Council 2019-20, there was £14,994 of expenditure drawn from the fees, at the end of 2019-20 was £3,150,170. This comprises the 38% of leaving an end of the year a balance of £30,039 waiting to be monies coloured yellow and grey in Figures 1 and 2. The spent. differentiation between ‘allocated’ and ‘unallocated’ sums is not always entirely clear cut. Generally, it refers to cases where the 2.11 To help put the figures in Table 1 in context the next page Borough Council (and occasionally other statutory bodies) have shows 4 line graphs indicating trends over a period of made a spending commitment. approximately the last 4 years (Figures 3-6). They show the fluctuation in the value of sums at different stages of the S106 2.7 While a sum may be identified as ‘unallocated’ for the process. The lines on each of these graphs represents the purposes of this document, the scope of projects on which it may different categories of infrastructure benefitting from contributions, be spent can be quite restricted due to the original terms of the reflecting the columns in Table 1. The last two periods covered in S106 obligation. As a result of statutory limits mentioned in the graphs relate precisely to the financial years 2018/19 and para.1.2 the contribution will be limited to a specific type of 2019/20. However, the first 2 periods going back to December infrastructure within a geographical area. For a number of years up 2015 relate to 14 month periods, reflecting figures and periods until 2019 the government imposed pooling restrictions, allowing covered by previous S106 monitoring reports. This should be no more than 5 obligations to fund the same item of infrastructure. noted when interpreting the graphs, but they nonetheless show To circumvent this it became increasingly necessary for the broad trends. These graphs are referred and analysed in more obligation to identify a specific project, such as an individual play detail in Sections 3.0-8.0 of this document. The impact of larger area, for example, but this could severely restrict flexibility if housing developments should also be noted; thus in 2017-8 the spending priorities changed.

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