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Councils are 'sitting on' cash claim

By Western Daily Press  |  Posted: January 08, 2014

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Local authorities across the West are 'sitting on' tens of millions of pounds of unspent money given to them by house-builders to pay for infrastructure to go with developments.

Swindon Borough Council was named as the 'worst offender' – with £18 million of developers' money 'unallocated'.

Councils receive money in the form of a 'Section 106 agreement', which is put in place with any medium or large housing development. Most of the money pays for roads, schools, playgrounds and other infrastructure for a new housing estate.

The Government is about to replace S106 schemes with a Community Infrastructure Levy, or CIL, which gives more power to local authorities to spend the money more widely in the community, rather than on specific projects associated with the development itself.

A survey of English councils showed £1.5 billion of S106 money in local authorities' coffers, given by developers but yet unspent by council chiefs.

Most of that – more than two-thirds – is allocated to projects, but has not been spent, while nationally, councillors have yet to decide what to do with £421 million.

Of all the local authorities in the country, Swindon Borough Council had the highest individual total of unallocated funds, at £18 million, with even more still unspent.

If councils do not spend the money in time – usually a set period of up to five years – they have to give the money back.

The revelation has fuelled central government claims that councils could do more to spend the money, and the totals justify the cuts that have sparked hundreds of redundancies at county and town halls across the West. Ministers also said it justified the change to CIL.

Swindon's Labour opposition said the ruling Tory group in the town hall had mismanaged the money from the town's developments.

Mark Dempsey, the shadow deputy leader, said: "We need a full review of how this money is managed, so we can give real value for money."

Swindon has seen a wave of large developments, and Mr Dempsey said the council had not put the infrastructure in place with the money, which was now starting to be returned. He claimed: "It was meant to be spent on a new link road to the town centre, a new sports hall and football pitches, but none of this has taken place."

A council spokesman denied they were 'sitting' on money, and the situation was down to the fast pace of the development in the town.

"This inevitably means the council has a significant amount of Section 106 money waiting to be spent," he said. He added that more than half of the council's Section 106 money had already been allocated to specific projects.

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