VOTE: Should Chichester District Council have kept a closer eye on how Section 106 cash was handled?

Reasons why Chichester District Council ended up having to hand back more than £200,000 provided by developers for improvements at the city’s canal basin were revealed last week.

The cash was given under a so-called ‘section 106’ legal agreement, decided when planning consent for a scheme is given. These deals sometimes include a deadline for spending the money, and the council failed to meet one in this case.

At a committee meeting councillors were told an independent assessor found that the council, having handed over the cash to West Sussex County Council – which owns the canal – ‘failed to concern itself with the way in which the funds were being spent’.

The district overview and scrutiny committee approved a series of recommendations designed to ensure the same thing does not happen again.

These include development of a ‘clear working protocol’ for dealing with section 106 agreements, council cabinet agreement for spending section 106 contributions over £5,000, and a stipulation that information on 106 sums and expiry dates should be provided to all members on a regular basis.

A review of what happened in the canal basin case was carried out by a special task group, chaired by Cllr Alan Chaplin. Its report said the section 106 involved developers who were given planning permission for a scheme at the Chichester Girls’ High School site.

The money was paid to the council on March 20, 2003. There was a condition in the agreement that it should be repaid if it was not used within six years – ie, by March 19, 2009. The task group concluded that progress on spending the money had been slow ‘due to the differing interests of the parties involved, and the lack of formal contracts and/or partnership agreements.’

The report said a council decision to transfer the funds to the county council, to satisfy the requirements of the section 106 in time to meet the deadline, was carried out in February, 2009, following advice from the council’s legal team.

“At this point in time the council was satisfied it had met the requirements of the section 106, and it was felt the money was not at risk of repayment,” it added.

“However, the independent expert concluded the lack of contracts agreed between the parties as to the spend of this money demonstrated there was no binding commitment on the execution of the work.

“He found the council, having handed the money over to the county council, failed to concern itself with the way in which the funds were being spent.”

Cllr Chaplin told the committee: “Schemes take a lot of development work, and it’s no good saying two months before the expiry date ‘we have to do something’.”

The task group’s work highlighted the important role for ward members in future arrangements, which was missing in the past.

“It is absolutely crucial ward members know what is going on in their local area,” he added.

Cllr Chaplin said committee members should be aware of the new protocol, but it was a matter for officers to work with this.

Corporate policy manager Joe Mildred said officers had learned they needed to come up with a more co-ordinated approach. “We will make it much more accessible to members,” he added.

Officers were now drawing up a recommended protocol.