Infrastructure Funding Statement 2020/2021

This report provides information on the monetary (and non-monetary) contributions sought and received from developers for the provision of infrastructure to support development in South Tyneside, and the subsequent use of those contributions by South Tyneside Council. The report covers the financial year 1 April 2020 to 31 March 2021.

South Tyneside Council seeks developer contributions through Section 106 agreements (also known as “planning obligations”) and Section 278 agreements. South Tyneside Council has not introduced a Community Infrastructure Levy charging schedule.

Section 106 of the Town and Country Planning Act 1990 enables a local planning authority to enter into a negotiated agreement – a planning obligation - to mitigate the impact of a specific development, to make it acceptable in planning terms. The planning obligation might, for example, require the provision or contribution to a new or improved road, school, health facility or local green infrastructure. Local planning authorities can also seek planning obligations to secure a proportion of affordable housing from residential developments. In some instances, Section 106 planning obligations may require payments to be made to parish councils.

The policies for seeking Section 106 contributions are set out in the suite of development plan documents that comprise the adopted Development Plan for the Borough. Ancillary guidance is provided in Supplementary Planning Document (SPD) No 4: Affordable Housing and SPD No 5: Planning Obligations. For example Core Strategy Policy SC4 Housing Needs, Mix and Affordability requires a minimum of 25% of all new dwellings to be affordable. SPD4 provides detailed guidance on matters associated with this. See www.southtyneside.gov.uk/localplan

Section 106 agreements can be re-negotiated and varied, and delivered in stages. For example, when a developer requested deferment of payments owing to the effect on housing delivery of the public health crisis, the local planning authority worked with the developer’s legal adviser to agree staged payments.

The headline figures in Table 1 show that significant sums from developer contributions have been invested in infrastructure to benefit local communities in 2020/21 and significant funds remain available to invest.

The Council did not enter into any financial obligation agreements with developers in 2020/21.

No non-monetary contributions, such as affordable housing units or school places for pupils, were entered into during 2020/21.

Table 2 shows the funds transferred to the Council from planning obligations during 2020/21. The table also shows when the planning obligations to which these funds relate were entered into and the types of infrastructure that they will fund.

The Council retained significant sums from developer contributions which has not been allocated / spent as of 31st March 2021. As explained at paragraph 7.1 the funds have been allocated to a funding ‘pot’ that is consistent with the Section 106 agreement but have not yet been applied to a capital programme for a given financial year i.e. have not been drawn down as ready to be spent on a specific project. These funds are shown in Table 3.

As stated at paragraph 2.3, developer agreements can be re-negotiated and varied, and delivered in stages where this is considered to be appropriate; for example in order to show flexibility in response to the operational constraints imposed on developers by the public health crisis. Table 4 shows Section 106 agreements which were signed before the financial year 2020/21 but which the payments have not been received owing to payment not having been triggered as at 31st March under the terms of the Section 106 Agreement with the Council.

The Council’s Finance Team only allocate funds (recorded as Applied Capital Programme 20/21) following a successful bid to draw down funds from the relevant team for funding for a particular project. Part of the criteria for a successful bid is that the money is ready to be spent. ‘Applied Capital Programme 20/21’ therefore is equated to both allocating and spending the funds and a distinction is not drawn between the two categories.

As stated at paragraph 7.1, a distinction is not drawn between allocating and spending funds. Table 5 shows the balances at 31st March 2021 of Section 106 funds held by the Council but not yet committed to the Capital Programme.

The largest amount of unspent funding is for affordable housing and that will be allocated to deliver the Council’s five year plan for housing – building new council homes and delivering new specialist and supported housing. These projects will focus around provision of extra care schemes, supported accommodation and specialist housing for vulnerable households within South Tyneside, for which there is currently a gap in accommodation. In addition the Council will support South Tyneside Housing Ventures Trust in developing and acquiring additional affordable family accommodation to provide high quality affordable housing across the borough. The Council are also looking into direct delivery and as such will develop additional council owned accommodation for those households in need within the borough. This accommodation will be delivered in locations of greatest need and reflective of the conditions of the S106 agreements.

The funding secured for strategic transport is to be spent on infrastructure improvements around the Hebburn area. This will include feasibility studies into metro stations.

The majority of funding for play held at 31st March 2021 has now been committed to North Marine Park which is nearing completion.

The majority of the funding held for education on 31st March 2021 has been allocated to a number of schemes.

Expenditure from S106 receipts during the 2020/21 financial year has been divided between transport and travel, children’s play space at North Marine Park and affordable housing.

Transport and travel

The main usage of S106 in 2021 has been the signalisation of the Mill Lane / Monkton Lane junction in Hebburn. This involved the removal of the mini roundabout and replacement with formal traffic signals.

Affordable housing

Section 106 monies have been used to fund the acquisition of sites for affordable housing.

Children's Play Space

The majority of expenditure on children’s play space in 2020/21 was committed to the North Marine Play Park project. The children’s play space is part of a £3.2m project to transform North Marine Park, at South Shields seafront, back to how it was when it first opened in 1890. The project, supported with £2.4m from the National Lottery Heritage Fund, is a partnership between South Tyneside Council, Esh Construction, Southern Green landscape architects and the Friends of North and South Marine Parks, who have been working closely with the Council’s Regeneration Team as well as dedicated Parks Officer. The delivery of an exciting, challenging and practical facility for children up to the age of 12 years is therefore a key element of this overall scheme and Section 106 funds have contributed in the region of £140,000 to the delivery of this project.

Paragraphs 9.2 to 9.4 of the document have described the projects that funds were allocated to / spent on during the financial year 2020/21. Table 6 shows the planning permissions that funded this expenditure and the total amount allocated/spent for each project.

The Council does not use Section 106 receipts to repay debt, only to fund project costs. Therefore zero monies were used for repaying money borrowed.

The Council does not include a clause in Section 106 agreements in respect of the cost of monitoring the delivery of planning obligations.

An agreement of this type covers works that need to be carried out on the existing adopted highway network. It is South Tyneside Council’s policy to construct all ‘stand-alone’ works that fall into this category; this will be at the developers’ expense. There are exceptions to this policy and they are as follows:

• The works are of a minor nature such as forming the bell mouth junction to a new development or resurfacing a short length of footway.
• The works involve a number of visits to site to carry out small amounts of work. An example of this is re-development of existing housing sites.
• Where the Council cannot carry out the construction within a reasonable timescale due to the workload.

The process for producing a Section 278 agreement depends on who is to complete the works; it can therefore be split into two parts.

1. When the works are to be built by South Tyneside Council the Section 278 drawing is submitted for approval and the required number are supplied for legal purposes. An estimate of total cost of works can be provided to the developer. The developer will provide his name and business address and that of his solicitor. From this information the draft agreement can be prepared by the Councils Legal Section. This becomes the Section 278 Funding agreement.
2. When the works are to be designed and built by the developer the process is the same as that of a Section 38 agreement. Where the works are of a minor nature such as junction bell mouths or short lengths of footway the Section 38 and 278 agreement drawings can be combined.

South Tyneside Council, as the local highway authority, does not usually separate out the section 278 works from the other developer highway works; we combine the agreements into one and the developer undertakes the section 278 portion of the works. Also the Council typically license the developer to carry it out.

Schemes that will be making alteration to the existing adopted highway but are likely to be undertaken by the developer so there are no cost estimates include the following

• Redevelopment of Holborn site – new junctions and improvements to existing junctions and footpaths
• Land at Hindmarch Drive – improving existing junction access
• Land at Ellison Street – new junction accesses to serve new internal road network

The Community Infrastructure Levy (Amendment) (England) (No.2) Regulations 2019

Regulation 121A states:

1. Subject to paragraph (2), no later than 31st December in each calendar year a contribution receiving authority must publish a document (“the annual infrastructure funding statement”) which comprises the following—
   1. A statement of the infrastructure projects or types of infrastructure which the charging authority intends will be, or may be, wholly or partly funded by CIL (other than CIL to which regulation 59E or 59F applies) (“the infrastructure list”);
   2. A report about CIL, in relation to the previous financial year (“the reported year”), which includes the matters specified in paragraph 1 of Schedule 2 (“CIL report”);
   3. A report about planning obligations, in relation to the reported year, which includes the matters specified in paragraph 3 of Schedule 2 and may include the matters specified in paragraph 4 of that Schedule (“section 106 report”).
2. The first annual infrastructure funding statement must be published by 31st December 2020.
3. A contribution receiving authority must publish each annual infrastructure funding statement on its website.