Review turned up £23,000 in ‘orphaned’ funds from developers

Section 106 money (S106) is contributed to the community by developers and can be used to help fund everything from affordable housing and roads to bus routes and youth services.

The orphaned funds were made up of interest paid on some old contributions that had already been spent on various projects.

With no guidance set down to indicate what to do with the extra money, it was essentially left in limbo.

At a meeting of the cabinet in East Pallant House on Tuesday, members were told that the changes to the protocols would ensure that no money was ever left unspent.

From now on, all interest paid on each S106 contribution that has not yet been spent on a project will be ringfenced so that it can only be used for that project.

Susan Taylor (Con, East Wittering) told the meeting that any interest earned on contributions that had already been spent would be placed in a separate reserve and used each year to supplement the New Homes Bonus parish allocation scheme.

The scheme helps to fund projects throughout the towns and parishes of the district.

Principal planning officer Karen Dower advised the meeting that it was unlikely that orphaned interest would occur again, but procedures would now be in place if it did.

Mrs Taylor added that the purpose of the changes was to ‘provide clarity’ about the use of all interest raised from S106 money.

The changes also cover interest earned from Community Infrastructure Levy (CIL) payments, which are paid by developers to fund infrastructure to support growth.

Simon Oakley (Con, Tangmere) has dedicated years to ensuring communities get as much benefit as possible from S106 contributions and minimising the risk of having to hand unspent money back to developers.

He said: “Back in 2011/12 I instigated the original decision to ringfence the interest earnt while these funds are in Chichester District Council’s hands as it helps in part mitigate the effects of inflation when they are spent.

“The amendments to the S106/CIL protocol and the allocation of ‘orphan’ S106 interest to supplement the New Homes Bonus parish allocations scheme is something I’ve been working on with officers for over a year and I welcome the decisions on this.”