St Helens Council will need to be “more explicit” in showing how developer contributions are spent in the future, a senior planning officer said.
Planning obligations, commonly referred to as section 106 agreements or developer contributions, are legal obligations entered into to mitigate the impact of a development proposal.
They are used when it is not possible to attach conditions to a planning application to make it acceptable.
A significant number of developer contributions have been negotiated over time in St Helens.
New legislation came into force this month made changes to the existing regulations and will require local authorities to publish an annual infrastructure funding statement at the end of each calendar year.
The statement should include funds received, expenditure during the year and planned expenditure for the following year where a decision has been taken.
The council’s environment, regeneration, housing, culture and leisure overview and scrutiny panel were updated on the new legislation.
A council report says: “Planning practice guidance states that reporting on planning obligations helps communities and developers see how contributions have been spent and understand what funds will be spent on in the future.
“In this way, the system will be transparent and accountable.”
Developer contributions generally concern, but are not limited to, the payment of financial contributions to provide for improvements to infrastructure.
However, councils have been criticised for sitting on millions of pounds worth of developer contributions.
Melanie Hale, the council’s service manager for development and building control, said they are often “misunderstood”.
“I think planning obligations are a really effective tool to deal with the impacts of developments when you can’t do it with conditions,” Ms Hale said.
“They’re often very misunderstood and I think discussion in this forum is a welcome opportunity to assist in people’s understanding.
“Each payment, each financial contribution has a story behind it and has a legal document and a justification.
“It’s important to understand that and going forward we’ll obviously have to be more explicit in how funding is spent – and I think that’s going to be to everybody’s benefit.”
Ms Hale said each section 106 agreement has a specific requirement that has to be carried out in a specific way.
She said there are instances, such as when contributions have been made by a developer for ongoing maintenance of open spaces, when money effectively sits there for a “significant period of time”.
Ms Hale said this money will “never” be spent in its entirety because the council want the money to be effectively maintained so the open space can be looked after.
“It’s important to understand within that context that we will always hold money in a section 106 for those things,” Ms Hale said.
“It may look from the outside like money’s not being spent, but it is being spent over time and for a specific purpose and it’s important to understand that.”
Currently, St Helens Council does not any specific planning policy that deals with developer contributions.
The St Helens Local Plan submission draft, which still needs to be inspected by the government’s independent planning inspector, does include a policy on infrastructure delivery and funding.
The policy explains the basis on which the council will seek to enter into a planning obligation and sets out a hierarchy that will form the basis for negotiations.
Ms Hale told the panel this will be “very helpful” as it will help the council set out its priorities in how it compensates for the impact of a development.