Agenda Item No


The Vale of Glamorgan Council


Cabinet Meeting: 5 November, 2012


Report of the Cabinet Member for Regeneration, Innovation, Planning and Transportation


Section 106 Legal Agreements - Protocol for Implementation of Spend


Purpose of the Report

1.         The purpose of this report is to outline the issues surrounding the implementation of section 106 financial receipts and to seek Cabinet's endorsement of an updated protocol for implementation of section 106 obligations.


1.         That the content of the report and the issues raised herein are noted, and proposals for improvement endorsed.

2.         That Cabinet endorse the updated protocol for implementation of section 106 obligations.

3.         That Cabinet refers the report to Scrutiny Committee (E&E) for consideration.

Reasons for the Recommendations

1.         To inform Cabinet of the issues surrounding section 106 implementation and to enable further progress to be made in this important area.

2.         To ensure the effective future implementation of s106 obligations.

3.         To seek the views of Scrutiny Committee (E&E) on the content of the report.


2.         Members will be aware that the Council currently has the power to enter into legal agreements with developers under Section 106 of the Town and Country Planning Act 1990, to seek contributions from developers to mitigate negative development impacts and facilitate development which might otherwise not occur.  The Council's approved Planning Obligations SPG sets out the Council's policies for seeking section 106 obligations.

3.         Each year an annual monitoring report is prepared for Cabinet which summarises the Council’s progress on negotiating, monitoring and implementing planning obligations through section 106 agreements, for the last financial year. At their meeting on 1st October 2012, Cabinet considered this report for 2011/12 and resolved "That a further report is presented at a future Cabinet Business meeting outlining a protocol on how the Council can release Section 106 monies" for the reason "in order that schemes approved can be established from the monies received under the Section 106 Agreements". This resolution followed concerns which had been raised by Cabinet Members of the Scrutiny Committee (E&E) and Community Liaison Committee that having secured section 106 contributions these contributions are not being spent quickly enough.

Relevant Issues and Options

Section 106 financial contributions

4.         Section 106 obligations can often take the form of financial contributions that are received on an ad-hoc basis depending on the implementation and progress of individual developments. These are held in a separate account for audit purposes. At the time of writing, the 'section 106 account' holds £2,254,310.17. Details of the amounts held, what they relate to and plans for their implementation are attached at Appendix A.

5.         These financial contributions are administered by the Council's Planning (Development Management) section, which is responsible for negotiating the obligations with developers in the first place, and thereafter monitoring developments and progressing receipt of contributions where necessary. Responsibility for spending section 106 contributions lies with the individual service areas (albeit in the full knowledge of the Council's Development Management Group) to which the obligation relates, for example 'public open space' contributions should be implemented by the Parks and Grounds Division. The section 106 database keeps a record of all agreements and their implementation and this is managed by the Council's Planning (Development Management) section.

Protocol for Implementation

6.         In 2008, the Council introduced a protocol for Member Involvement in the implementation of section 106 spend. The full protocol has been amended to take account of the recent changes in administration and Council structure as well as changes to make it more streamlined and is set out, in its amended form at Appendix B.

7.         In summary, the protocol sets out that when financial obligations are received, the relevant service areas are notified and options for spend are considered and proposed with consultation undertaken with Ward and Cabinet Members and a scheme for implementation agreed.

8.         The protocol sets out the formal process, but this does not prohibit a degree of flexibility. For example, Local Members are often aware of developments occurring in their areas and can put forward suggestions for schemes to spend section 106 contributions before they are formally consulted. In the past this has often led to more effective implementation because of early support from Members.

Issues with s106 implementation

9.         There are a number of issues which can frustrate the successful and speedy implementation of section 106 financial receipts. Firstly, the ad-hoc timing of financial receipts because they are triggered by market dependant factors such as the commencement of development or beneficial occupation of that development. This makes it difficult to plan ahead without potentially wasting staff resources. This is an issue which is primarily out of the Council's control.

10.      Secondly, there are a few issues which prevent the service areas themselves progressing schemes towards implementation, namely: a lack of 'on the shelf' schemes ready to implement; the small sums of money sometimes involved makes it difficult to implement a meaningful scheme without pooling resources alongside other sums of money; resources (officer time) to undertake projects above and beyond the normal work programme; and, prioritisation of other workload which may be time-constrained or more urgent.

11.      In addition, there have been delays in the past following member consultation and disagreements on how contributions should be spent in particular areas.

12.      Finally, there are significant implications from the introduction of the Community Infrastructure Levy Regulations, which will in part replace section 106 planning obligations, in particular for financial contributions. Officer resources in the Council's Planning (Development Management) section have needed to also look at this process, meaning that there is less scope for the pro-active pursuing of S106 spends with the relevant service areas to drive forward implementation of section 106 schemes.

Proposals for improvement

13.      Given the issues highlighted above with pressures on individual service areas and within the Council's Planning (Development Management) section, it is intended to utilise the Council's Project Management Unit to drive forward implementation of section 106 receipts, especially for major development sites such as Penarth Heights and Barry Waterfront where the number and value of the contributions are significant. Furthermore, the Director of Development Services is currently considering options to allow the effective monitoring of section 106 implementation.  This is a role that has typically been undertaken by the Principal Planner (Planning Obligations) who, out of necessity is now devoting more time to work on the introduction of a Community Infrastructure Levy for the Vale of Glamorgan.

14.      To utilise some of the smaller sums of money, it is envisaged that the Council will continue to seek to match-fund section 106 monies with other grants such as Creative Rural Communities and Barry Regeneration Area funding.

15.      To try to avoid delays arising from separate stages of consultation, it is proposed to amend the protocol to notify the relevant ward and Cabinet members when s106 monies are received so that they can put forward suggestions of schemes for implementation at the same time that service areas are considering options for spend. It is hoped that this will stream line the process, and will also allow for all options to be considered at the same time.  The protocol at Appendix B, reflects this change.

16.      In additional, the capital schemes funded by S106 obligations will be included in the Council's Capital Monitoring data, so that spends can be tracked.  Likewise, it is envisaged that performance against Section 106 implementation will be subject to regular updates to the Council's Corporate Management Team.

17.      Finally, where appropriate, officers will seek on-site provision of facilities as part of developments to remove the administrative burden from the Council and leave the responsibility of implementation with the developer. This is particularly relevant to matters such as public art and open space facilities, which can more practically be provided on site.

Resource Implications (Financial and Employment)

18.      The planning obligations sought through Section 106 legal agreements are an important mechanism to mitigate against the impacts of new developments.

19.      The administration of section 106 matters is covered by the 'Administration Fee' charged at the time of completion of the legal agreement, which assists in meeting the costs of the workload that is outlined in the report.

Sustainability and Climate Change Implications

20.      The use of Section 106 agreements and schemes arising from the same assist in mitigating the impacts of new development.  In this regard certain Section 106 contributions can add to the sustainability of new development.  Good examples relate to improvements in public transport, sustainable transport measures and the provision of local community facilities that reduce the need to travel.


Legal Implications (to Include Human Rights Implications)

21.      The planning obligations system is covered by Section 106 of the Town and Country Planning Act 1990 (as amended) and The Community Infrastructure Levy Regulations 2010.

Crime and Disorder Implications

22.      None arising out of this report, although planning obligations can be related to crime and disorder matters given that such matters are material considerations.

Equal Opportunities Implications (to include Welsh Language issues)

23.      None arising directly out of this report, although the use of Section 106 finance on community facilities and public transport can contribute to providing access to services and facility to all sections of the population.

Corporate/Service Objectives

24.      The contributions paid by Developers under the planning obligations system have a wide impact on many of the Council’s functions including education, community facilities, highways and public transport, enabling the Council to mitigate the impact of new development.

Policy Framework and Budget

25.      This report is a matter for Executive decision by the Cabinet.

Consultation (including Ward Member Consultation)

26.      No Ward Member consultation has been undertaken as the report has implications for the Vale as a whole rather than specific wards.

Relevant Scrutiny Committee

27.      Economy and Environment.

Background Papers

Town and Country Planning Act 1990

The Community Infrastructure Levy Regulations 2010


Contact Officer

Contact Officer – Victoria Robinson, Principal Planner (Development Control) - Tel: 01446 704662



Officers Consulted

Chief Accountant

Operational Manager – Legal Services

Operational Manager – Planning & Transportation Policy

All Heads of Service


Responsible Officer:

Rob Thomas - Director of Development Services