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Could you receive your S106 money back?

By: Anthony  Published Date: 24 Sep 2013 10:01
legal agreement

Developers are being urged to check their entitlement to a rebate in S106 costs. This is in the wake of councils all over the UK failing to spend the designated money.

What is a Section 106 agreement?

S106 costs are created under the Town and Country Planning Act 1990. They are legally binding obligations that are attached to a piece of land and are registered as local land charges against that piece of land. Planning obligations enable a council to secure contributions to services, infrastructure and amenities in order to support and facilitate a proposed development.

The S106 contributions tend to be distributed for the following purposes:

• Community Facilities • Affordable Housing • Public Art • Education • Open Space • Traffic, Transport & Highways • Adult Training, Employment & Enterprise • Health • Environment & Public Realm

Most notably London Councils are the largest culprits compared with the rest of the UK. Westminster banked 70% of London’s off-site affordable housing contributions in the 12 months to August 2013, collecting a total of £94m. The City of London secured the next highest sum of £17.5m, equivalent to 13% of the London total of £138.4m.

Tracking S106

Upon agreement of your S106, the allocation of the money will be vaguely stipulated i.e. ‘X’ amount to be allocated to “Traffic, Transport & Highways”, where your money will be secured for highway works and sustainable transport initiatives. However, being able to track whether it has actually been spent is another matter altogether. It is a rather challenging process for developers as many lack the resources or time to monitor how their capital is used. In addition, local authorities rarely provide reports on how the S106 contributions have been spent.

The most viable way to track your S106 contribution is by contacting the S106 officer at your local council. The majority of councils across the UK have an internal database which stipulates where the money has been allocated to and if it has indeed been spent. The internal databases tend to refer back to applications from as early as January 2000. Obtaining information prior to 2000 may prove somewhat difficult.

Are You Entitled To Money Back?

It is essential that you read through the S106 that was agreed. All S106 agreements will stipulate whether there is a time period that the S106 must be spent by. If there is no time limit stated then the local council are able to spend the contribution at their own leisure. However, if there is a date or time limit stipulated and this deadline has lapsed, then you are able to contact your S106 officer and make an enquiry as to claiming your money back. This can be in written format or an initial phone call.

The table below shows the Capitals top five commuted payments:

Local authority   Total*
 Westminster  £94.2m
 City of London  £17.5m
 Hackney  £9.1m
 Hammersmith & Fulham  £5.1m
 Southwark  £5m
* Year to August 2013

Paramount Opinion

I believe that S106 contributions need to be made easier to track as to where and when the money has been spent. S106’s have been viewed by developers as a ‘bribe’ from the council in order to allow development to take place. If developers are going to be hit with a ‘bribe’ in order to help new homes be built then I feel that they should be entitled to know exactly what their money has been spent on and when it was spent. If this money hasn’t been spent in accordance with what was stipulated in the S106 agreement then there should be a straight forward rebate procedure in place.

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