Councils made to give £225k BACK to developers - often because they didn't spend it quickly enough
PUBLISHED: 05:30 26 January 2019 | UPDATED: 08:46 26 January 2019
Cash-strapped Suffolk councils have returned thousands of pounds of contributions to developers which were meant to be spent on community schemes.
More than £225,000 of Section 106 money has been handed back by councils – mainly because they did not spent it in time.
The money, paid to councils by developers, is meant to go on road improvements, public transport and community facilities at new housing estates.
S106 contributions are often included as a way to overcome objections and as a condition of planning approval.
But on a number of occasions in the last five years the money was returned because Suffolk councils had not spent it within a five-year limit, Freedom of Information requests from this newspaper show.
While the sums are a fraction of total S106 contributions made, councillors said they showed deep failings within local government.
Andrew Stringer, leader of the Liberal Democrat, Green and Independent group at Suffolk County Council (SCC), said it was “perverse” that developer contributions were going unspent during a time of austerity.
Much of the returned funding was down to SCC’s failure to carry out highways projects.
“This just fuels the anti-development argument,” Mr Stringer said.
Councils said far more S106 funding has been spent than returned, helping to build new roads, schools and sports facilities.
But with many of the biggest returns relating to already controversial developments, councillors said it undermined people’s faith in planning. Sarah Adams, Labour’s group leader at SCC, said there was something “fundamentally wrong with the system”.
“This money could have made a real difference to communities across Suffolk, with many already feeling the strain of increasingly unsustainable development,” she added.
Ipswich Borough Council returned £37,960 to house builder Crest Nicholson over its 340-home development on the former Hayhill allotment site off Woodbridge Road. Although money had been earmarked for highways improvements, SCC failed to carry out the project on time.
Mid Suffolk District Council (MSDC), meanwhile, repaid Bellway Homes £20,000 for a 21-home extension to the Claydon Heights development in Claydon. The funding was for a new village hall but had to be returned when the rest of the cash could not be raised in time.
The council said it sought to negotiate other uses for the funding but claimed the developer was not willing to engage.
Peter Avis, treasurer of the Claydon and Barham Community Centre, said there had been repeated attempts to contact Bellway, dating back several years, but to no avail.
And Saxmundham missed out on just under £20,000 for Hopkins Homes’ 145-home development in Church Hill.
The S106 money was earmarked for traffic calming measures but was returned because SCC highways did not spend it within five years.
Jeremy Smith, chairman of Saxmundham’s neighbourhood plan steering group, said: “I’m dismayed that Saxmundham has been deprived of essential infrastructure funding.”
The same development had also been expected to provide £200,000 for a “one stop” health service.
But John Havard, of Saxmundham Health, said that never got off the ground because of financial problems at the now disbanded primary care trust.
However, Dr Havard said Hopkins Homes “acted very reasonably” and allowed half of the money to fund changes to the existing building.
Hopkins Homes was paid a further £25,267 of returned S106 money from MSDC on its 21-home development in Walsham le Willows.
Although £33,808 was spent on new tennis courts, football pitches and a village hall extension, further projects could not be completed on time. Jessica Fleming, who represents the village at SCC and MSDC, called for a “full inquiry” into the matter in 2016.
Speaking this week, she said: “The situation could easily have been remedied by a more co-operative developer.”
Haverhill also lost out on two pots of S106 funding.
Almost £2,400, which had been earmarked for bus services, was returned to Tesco for its supermarket in the town. A further £30,067 was given back to Carisbrooke Suon over its Helions Park development. The money had also been for a new bus service which was withdrawn due to lack of use.
Haverhill Town Council said it was “extremely frustrated” the money had been lost.
A spokesman said: “The county council’s failure to consult with local parishes before they agree S106 with developers and failure to work with us to implement projects shows a complete disregard for the community they are supposed to be serving.“
Other returned funds included £74,698, which went back to Badger Building, relating to its 22 flats at Kingswear Court in Lowestoft, after Waveney District Council failed to spend it in time,
A further £2,254 was returned by Suffolk Coastal District Council to Hopkins & Moore relating to a development in Peasenhall.
Hopkins Homes received £10,961 back from contributions related to its 38-home development at The Albany in Ipswich.
Simon Bryan, development director at Hopkins Homes, said the money had been returned as the actual cost of the works were less than had been budgeted.
Mr Bryan said in other cases, such as in Snape, Hopkins Homes had donated £25,000 of unspent S106 funding directly to the parish council to carry out work.
Essex County Council, meanwhile, returned £180,802 of S106 money, all for projects that came in under budget.
None of the other developers have responded to our requests for comment.
‘We work hard to avoid this’
Suffolk councils said most developer contributions were spent on time.
The county council added that it occasionally delivered schemes below estimated costs and had to return any underspend.
Suffolk Coastal and Waveney councils said Section 106 funding could only be spent on specific projects.
They said towns and parishes now received a share of Community Infrastructure Levy raised from developments in their area.
Mid Suffolk District Council said £316,000 of developer contributions had been collected in the past year to spend on sports facilities, playgrounds and community halls – with £5m more expected. “It’s true that the agreements can sometimes set terms so exacting that we cannot spend all the money collected,” a spokesman added. “We work hard to avoid this and, where it happens, we rarely have to refund all the money involved.”
Millions spent on new schools, roads and libraries
Projects funded through developer contributions have included new schools, roads and libraries.
Suffolk County Council said The Pines Primary School and Pine Cones Pre-School in Red Lodge, Limes Primary Academy in Lowestoft and Sybil Andrews Academy in Bury St Edmunds had opened using developer funding.
A new primary is also set to open in Thurston in 2020 using developer contributions.
SCC said Countryside Properties’ 950 home development in Bury St Edmunds had funded a new relief road, while Persimmon Homes’ 1,150 home scheme in Haverhill would fund a new primary school and relief road.
Babergh and Mid Suffolk district councils said £549,674 of developer projects had been used for infrastructure projects in 2018.
Suffolk Coastal District Council has received nearly £3million in Community Infrastructure Levy since the scheme opened in 2015.