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Agenda item

SECTION 106 AND COMMUNITY INFRASTRUCTURE LEVY (CIL)

To receive details on the background to the collection and assignment of the borough’s Section 106 income Community Infrastructure Levy (CIL).

 

Minutes:

The Cabinet Member for Culture and Regeneration introduced the item and outlined details in a Presentation

Following the Presentation, Members had the opportunity to ask questions.

Points of Clarification

A Member asked for further details and composition of the infrastructure finance group

Officers said that it was an officer group led by the Spatial Planning Service, with officers from the Council’s finance and legal services. The group undertakes legislative checks and it was bound by the Council’s finance levels in terms of authority. All decisions made was reported in the Annual Infrastructure Funding Statement.

The Cabinet Member when asked if there was a potential for Councillors to be part of the group, whether it be portfolio members or ward members, said this was a discussion that would take place with officers.

Following points of clarification, the Chair opened discussions for questions and answers.

A Member asked what the difference was between the Section 106 and the Community Infrastructure Levy (CIL). The Cabinet Member said that S106 was specifically designed to mitigate the impact of a particular development by addressing various challenges pertinent to the geography around the development. CIL paid for things such as school improvement which benefitted the wider community and borough. CIL levied for a particular development may be spent elsewhere to address challenges or priorities that were Borough wide.  The whole basis of CIL which was introduced in 2010 was to allow for LA’s to collect funding on a Borough wide basis to enable strategic infrastructure investment decisions to be made.

A Member asked how local people were listened to across the whole borough and their voice taken into account within the strategic decision around allocation of funds. The Cabinet Member said that the administration was tasked with delivery of government programmes that were set out strategically through manifesto pledges with programmes to be delivered locally which could be funded by CIL and this was done as expected. Councillors work actively in their Wards to encourage community involvement in decision making.

A Member asked if minutes of the community infrastructure group were in the public domain.  Officers said that in terms of transparency of the work of the infrastructure finance group, since inception they published the S106 tracker on the Council website, which details all the decisions made by the group on a quarterly basis. In accordance with CIL regulations, they published the Infrastructure Funding Statement on an annual basis on what had been received, assigned and balances carried over.

A Member commented that the total amount of CIL collected from the Cane Hill development was extensive and very little had been spent in the area where a large scale development had taken place to alleviate the strain on current resources that a development of this type would cause on local community infrastructure. The Cabinet Member said that CIL was designed to be spent across the borough and not necessarily in the area that it was collected in and that there was competing priorities across the Borough for the relatively small pot of funding. The total amount collected for the year was approximately £8million and in terms of addressing infrastructure issues, this was not a vast sum of money. Officers added that CIL and allocation per wards was a subject of a recent Councillor question which was responded to and could be attached to the minutes.

The  Council Question, 001/21, 007/21 and 008/21 can be viewed here

https://democracy.croydon.gov.uk/documents/s31801/25%20February%20Responses.pdf

 

https://democracy.croydon.gov.uk/documents/s31804/2%20June%20responses.pdf

 

In response to a Member question on discrepancies on what was collected against what spent on CIL and what happens to the rest of the money as there were balances left each year that could have been spent elsewhere. The Cabinet Member said that not everything collected was spent in that specific year. Officers said that the figures presented were gross figures, total CIL collected each year and total allocations shown with the residual of the 15% local meaningful proportion and was allocated to Community Ward Budgets. The CIL regulations also allows up to 5% of the budget to be allocated to administrative tasks of the collecting authority, any underspend following that was rolled onto the following year. It was made clear that there was no rolling over of any CIL funds to the General Fund.

In response to a question on how to streamline the processes to ensure the right and robust decisions had been made in spending of the CIL appropriately and timely, the Cabinet Member said that it would appear that there was a bureaucratic process to unlock funds but that a degree of bureaucracy was needed to ensure that money was allocated appropriately in accordance to scheme aims and objectives and the right balance had to be sought. Officers added that Community Ward Budgets had been subject to audit to ensure that they were being spent as per purpose of allocation. In terms of proportionality of process, bids were considered on a timely basis as the team meets monthly to discuss bids. The completed bidding forms was in line with the requirements and teams support bidders where necessary to complete the forms.  This was all conditional on available resource to progress a bid and execute delivery of the project thereafter as there was a requirement of meaningful commence of the project within 12 month or the funds would be returned to the balance sheet thereafter. This was to avoid unintentional banking or funds being unspent when could be utilised elsewhere.

It was asked what the other models for CIL Local Meaningful Proportion consideration on allocation processes was and how it was decided that Ward Budget was the model for Croydon. The Cabinet Member said that some LA’s have a Borough wide community fund model where communities can bid for but Croydon had a more localised model where individual Ward Members would hold a budget and local organisations could bid. The Ward Budget system determination was made several years ago through the Council’s budget setting report and it was felt at the time that it was a good link between local reps, communities and councillors. Officers added that there is a variation of models across London in terms of levels of engagement with communities and how resource demanding they were. Croydon had a middle approach based on the available options, where councillors could engage with communities on how budgets were utilised.

It was asked how to strengthen governance arrangements in order to improve processes in Croydon. The Cabinet Member welcomed Scrutiny’s thoughts on how the allocation process could be strengthened whilst being mindful of the organisations capacity.

An update was requested on the Place Plans funding investments in communities and what was the future for the approach.  The Cabinet Member said that it was designed to assist communities to adapt to the changes and developments in their area. There would be a degree of change going forward in all communities and it was important for residents to be supported through the process. If within the current resource constraints, Place Plans could be resurrected, it would be a useful tool to assist people to adjust and drive change in individual neighbourhoods. Officers added that this would be discussed with the district centre and regeneration directorate.

A Member asked if there was a way to have more influence on how the local fund was spent locally to allow for more involvement in the prioritisation process. The Cabinet Member said that Place Plan should be a bottom up process in an arena where processes can feel to be very top down and local ward councillors were best places to drive Plans in the communities they serve.

It was asked if there was any risk of cross subsiding infrastructure elsewhere in the Borough than anywhere that development occurs. The Cabinet Member said that CIL collected in one end may pay for services in another part of the Borough and residents would benefit from that infrastructure spend regardless of it not being where they live in the Borough. CIL allows for Borough wide strategic infrastructure investment.

It was asked as the Council was looking forward to receiving the recommendations from the Climate Change commission and was exploring how to work within the existing funding, if there was opportunity to put together a policy around taking action against Climate Change using CIL and S106 funding. The Cabinet Member for sustainable Croydon would welcome the opportunity to work with officers on this where possible.  The Cabinet Member said that tackling Climate Change was priority and welcomed any opportunities to discuss if CIL and S106 could be used to fund projects.

It was commented that more platforms for joined up working models of engagement on issues was needed across the Council.

It was asked what the Borough CIL collection rate was for the Town Centre. The charging schedule was set in 2013 and was set at £0 and this was due to a challenge regarding the viability of schemes in the Town Centre and the ability to pay CIL and deliver affordable housing. The LA took the decision that it wanted affordable housing coming through with developments and CIL would be set at zero to maintain the viability of those developments. In the last 7/8 years, conditions and land values had changed and it may now be viable to provide affordable housing as well as pay CIL and the Council would need to reassess the conditions and what was now possible.

The Chair thanked the Cabinet Member and officers for their engagement and responses.

 

In reaching its recommendations, the Sub-Committee came to the following conclusions

  1. In the interest of transparency, the public to be made aware of discussions that took place and how decisions were arrived at in the Community Infrastructure group meetings.
  2. The Infrastructure Finance Group was made of officers and it would be beneficial for a Councillor to be part of the group
  3. Details on CIL collection and allocation was an area of interest for Councillors and Members of the public and it was important that this information be made accessible to the community.
  4. The lack of member activeness in the allocation process of Bid was noted and in order to further streamline the service, it would be beneficial for the role that members could play be expanded.
  5. There was a lack of engagement and participation on how the allocation process was approached as it was heavily officer led process
  6. It was vital that the Place Plan be brought back due to importance of the work that was and could be further carried out.

The Sub-Committee recommended that

  1. Consideration be given to summary of the minutes from the Infrastructure Finance Group meetings being made available in the public domain
  2. The officer response to Councillor Simon Brew’s request for information on CIL receipts be added to the minutes of this meeting,
  3. In order to improve transparency and accountability in the allocation process of Bids, Member involvement be weaved into the process.
  4. A review of the CIL Local Meaningful Proportion allocation process be conducted to include looking at different models and how to better involve community groups and residents.
  5. Officers bring back the Place Plan to a future meeting, with a proposal on how to redevelop

 

Supporting documents: