Report of the Strategic Director (Growth and Development)

This report provides an update on the Council’s Section 106 (s106) activity for the municipal year (2018/19).  Together with the appendices it provides an update on the management and administration of planning obligations and sets out the progress on unspent funds.

The Committee considered a report of the Strategic Director (Growth and Development), which provided information on the 2018/19 municipal year’s activity in relation to S106 Agreements and specifically on associated financial obligations. The report also set out the legislative framework for negotiating S106 agreements, and updates on the Community Infrastructure Levy (CIL) and viability assessments.

The Executive Member for Environment, Planning and Transport provided a brief summary of the report.  The main points and themes included:-

·                During 2018/19 year, 16 S106 agreements were signed.  Of these, seven related to the provision of affordable housing;

·                A total of £966,865 had been received in S106 financial contributions and to date income collected in the current fiscal year was £907,878;

·                There was currently £6.5 million held through received S106 contributions. Of this around £500,000 was awaiting to be reserved to projects;

·                No refunds had been made during this period in relation to any financial obligation, however, there was one case where the financial obligation was now required and this was being pursued;

·                Viability assessments were now submitted as part of the planning application and were publically available for inspection;

·                The ability of Member engagement in the context of planning agreements;

·                S106 governance arrangements, which included the establishment of a dedicated S106 Advisory Group to review spend, track process and help unblock any issues; and

·                The Council continued to not implement CIL in Manchester at the current time.  As part of the review of the Core Strategy (the development plan), consideration would be given to the introduction of CIL which would include assessing, if it is possible to establish an economically viable CIL rate and/or whether these could differ in different geographical areas.

The report also contained a breakdown of S106 agreements on a ward by ward basis.

Some of the key points that arose during the Committees discussions were:-

·                Would it be possible for all Councillors to have access to the new viewing portal for S106 agreements;

·                What was the exact process for Member engagement in the context of S106 agreements secured through the planning process;

·                It was felt that on some occasions, Ward Councillors were not being made aware of potential S106 monies within their wards and clarification was sought on the co-ordination between the Planning Department and Neighbourhood Teams;

·                It was suggested that some Members felt that S106 agreements had been determined by the time pre-application discussions were taking place and that due to this, they had little influence;

·                It was queried as to how local residents could contribute ideas to S106 spend;

·                Could the amount of S106 contribution increase if a development became more profitable than anticipated;

·                Was there any timescale around a future decision on the possible implementation of a CIL;

·                There was concern about assumptions being made between the S106 agreement and the source of spend as well as the length of time it was taking between a S106 agreement being made and the its implementation;

·                It was suggested that it was not clear to Members who was responsible for ensuring the spend of S106 once an agreement had been secured through the planning agreements

·                It was suggested that the Council’s Member Development Working Group considered arranging refresher training for all Councillors on the S106 agreement process;

·                Was there anything more the Council could do to achieve more S106 contributions from developers; and

·                Had there been any instances where the Council had proposed a small S106 contribution than that identified from the viability assessment.

The Director of Planning, Building Control and Licensing advised that it was the intention for the new viewing portal for S106 agreements to be accessible for all Councillors by the beginning of December 2019.  In terms of Member engagement in the context of S106 agreements secured through Planning, it was reported that pre application engagement was key and although not mandatory, all developers were encouraged to undertake this.  Once a planning application was submitted, every Member was provided with details of these applications relevant to their ward and were encouraged to contact Planning to discuss the S106 proposals in relation to these applications.

The Committee was advised that the dedicated S106 Advisory Group was led by the Director of Planning, Building Control and Licensing and had strategic leads from Neighbourhoods and Planning as part of its membership to ensure that appropriate governance arrangements were in place.

It was explained that when the Council entered  pre-application discussions with developers it was inevitable that discussions around mitigation measures would take place and this would include whether this could be achieved by way of a planning condition or through a S106 agreement and at this stage, no final decision would be taken.  Once an application was submitted, officers constantly reviewed, assessed and evaluated what may be required and up until the point of issuing a Planning committee report,  Members and residents had the opportunity to make comments as to whether they felt a requirement for a S106 contribution was needed in relation to an application.  This was caveated with the point that there would be some limitations as to what a S106 agreement could be used for.

In terms of the ability to increase the amount of S106 contribution from a  profitable development, the Council now introduced a reconciliation process which enabled the Council to retest the viability of every S106 agreement it entered into for a financial contribution and had embedded a claw back provision to enable the Council to seek further S106 contributions from a developer if there had been an uplift.  In relation to CIL, the Director of Planning, Building Control and Licensing advised that at present there was no timescale for the introduction of CIL in Manchester but this would be considered as part of the development of Manchester’s Local Plan.  This would not be a straight forward decision and due to the complexity, it would take some time before a decision was taken as to whether to implement this in Manchester.

The Director of Planning, Building Control and Licensing acknowledged that there was a number of S106 agreements that were now quite old in terms of when these agreements had been made, however, over the last 12 months a risk review had been undertaken for these agreements and it was reported that none of the S106 agreements were in danger of the financial contributions being returned to the developer.  It was agreed that in future reports dates would be included in the as to when consents were granted and dates S106 agreements were signed.  The Chair asked that this information be added to the Ward Information data and circulated to all Members within the next month.

The Director of Planning, Building Control and Licensing acknowledge concerns raised and commented that the establishment of the S106 Advisory Group and new governance arrangements as detailed in the report sought to address these concerns.  It was also reported that the Council’s Internal audit had been asked  to undertake a complete review of the new governance arrangements.  The Chair suggested that the Committee received an update report following Internal Audit’s review.

It was reported that at the present moment it was difficult to identify and further scope where the Council could seek further S106 financial contributions as all viability information was now published in the public domain and the Council already negotiated strongly with developers. Furthermore it was reported that the Council had been no instances where the Council had proposed a smaller S106 contribution than that identified from the viability assessment.

Decisions

The Committee

(1)       Notes the report; and

(2)       Requests an update report following Internal Audit’s review of the new S106 governance arrangements and that this report includes the following information:-

·                An indication of affordable housing being provided from S106 contributions

·                How Developers are encouraged to mitigate any harm from their developments

·                Best practice and comparison of S106 arrangements with other GM local authorities; and

·                The S106 triggers for planning applications within the Deansgate Ward (Land Bounded By Chester Road, Mancunian Way And Former Bridgewater Canal Offices and Land Bounbd by Jackson Row, Bootle Street, Southmill Street and 201 Deansgate.

(3)       Requests that when the update report is considered, representatives from Neighbourhoods and Capital Programmes attend to help address the Committees concerns around the rate of spend of S106 agreements.