Agenda item

The purpose of this report is to provide an update on the collection, allocation, and spend of Strategic Community Infrastructure Levy (SCIL) and Section 106Agreement contributions made pursuant to the Town and Country Planning Act 1990 (S106) over the last 10 years, including information on any unallocated funds and spending priorities.

Members are asked to note that the report does not consider the collection, allocation and spend of the Neighbourhood Community Infrastructure Levy, which is overseen by the Community Grants team in the Partnerships, Housing and Residents Services directorate.

Gerry Ansell (Director Inclusive Regeneration and Employment) was invited to introduce a report providing an update on the collection, allocation, and spend of Strategic Community Infrastructure Levy (SCIL) and Section 106 Agreement contributions made pursuant to the of the Town and Country Planning Act 1990 (S106) over the last 10 years which had been broken down by theme and by ward, including information on any unallocated funds and spending priorities.

In presenting the report, members were advised Brent used two key mechanisms to secure funding for infrastructure improvements and community benefits from new developments; S106 and CIL with both mechanisms essential in providing local infrastructure in response to the demands created by new development.  While both S106 and CIL were designed to ensure that developments contribute to infrastructure and community services, there were key differences in how they function in terms of:

·            S106 being negotiated on a case-by-case basis and focussing more on addressing specific impacts of individual developments, such as affordable housing.

·            CIL being a fixed charge that applied to most developments and was more broadly used to fund infrastructure improvements that support growth across the borough.

The Committee was advised of the strategy and governance arrangements established to manage the collection, allocation of SCIL and s106 funds based on the Council’s Infrastructure Delivery Plan (IDP) and Local and Borough Plan with both often used in a complementary manner. For example, on larger developments S106 would be sought to address specific local impacts (e.g., affordable housing and site-specific infrastructure) and CIL contributing to broader borough-wide needs.

Having thanked Gerry Ansell (Director Inclusive Regeneration and Employment) for introducing the report, the Chair then moved on to invite questions and comments from the Committee in relation to the overview provided , with the following comments and issues discussed:

·            As an initial query, further details were sought regarding the overarching strategy for the Strategic Community Infrastructure Levy (SCIL), with a particular focus on how needs were identified and how spending was mapped to those needs, considering that some wards in the Borough collected significant amounts of SCIL but did not see commensurate spending. In response, Gerry Ansell outlined in more detail the role of the Local Plan and Infrastructure Delivery Plan (IDF) in identifying and prioritising the range of infrastructure requirements across the Borough which included housing, employment and supporting facilities. This constituted the overall strategy for SCIL. Reference was also made to the objectives and priorities within the Borough Plan and growth areas identified within the Local Plan across the borough. Members were advised that SCIL had been allocated to 26 projects, as referenced in the committee report. It was noted that infrastructure projects often involved substantial capital investments that took time to plan and implement. It was further noted that there was a time lag, as SCIL collection was triggered when development commenced.  In terms of the schemes listed in the report, Reference was made to the Morland Gardens scheme included in the list of SCIL allocated projects, which confirmation provided that this had not been progressed due to viability issues with the SCIL allocation subsequently not having been utilised.  Members noted the details of SCIL collection, allocation, and spending divided by ward within the report with the delivery of projects often designed to support the delivery of infrastructure and provide local community benefit across a wider area than the initial ward(s) identified, for example, through the provision of health facilities that would serve a much wider catchment area.

·            Following up from the previous question, reference was made to paragraph 3.3.10 of the committee report, which indicated that Dudden Hill ward had approximately £4 million in SCIL collected but £0 allocated, and Fryent ward had nearly £4 million in SCIL collected but £0 allocated. Members therefore questioned why SCIL funds were collected in certain areas intended to support communities undergoing regeneration, yet no allocations had been made in those areas with the Committee keen to ensure that funds were effectively allocated to meet needs identified across the Borough.

·            With reference to paragraphs 3.3.7 to 3.3.9 of the committee report, members then moved on to seek further detail on the SCIL governance arrangements and role of the Infrastructure Officer Working Group, Capital Programme Board and Cabinet (in cases were more than £250,000 was being sought) to ensure that the process addressed existing need. In response, Gerry Ansell explained that while an Infrastructure Delivery Plan was in place and discussions were held with partners and boards through governance arrangement processes, it remained a reactive process with potential projects identified through a number of sources.  Members were advised that SCIL could only be spent on physical infrastructure that supported development and could not be spent on revenue or feasibility reports or used to repair existing failing infrastructure which is not related to development i.e. potholes, pavement repairs or existing infrastructure deficiencies.  As such the assessment and governance process was focussed on the relevant criteria permitting use of SCIL with the processes felt to function well and subject to regular review. Members learned that an Infrastructure Funding Statement was published annually, as referenced in the committee report, outlining the spending, collections, and allocations for public transparency.

·            In outlining the different categories of spend, members noted that SCIL could be utilised to fund a wide range of physical infrastructure and inquired whether there was an opportunity to work in partnership with the Climate Action Team to communicate that SCIL funding could be allocated to different categories and to collaboratively identify needs and ensure the effective use of SCIL funding. In response, Gerry Ansell confirmed that discussions had taken place with the Climate Action Team with reference also made to the details on the Carbon Offset Fund, as detailed in paragraph 8.4 of the committee report and other significant funding sources available in this respect. The importance of spending SCIL funds prudently and linking them with other funding regimes was also stressed.

·            In terms of overall responsibility for the allocation of SCIL funding members were advised this fell within the remit of Cabinet with the Committee keen to ensure that a proactive strategy was developed working collaboratively across the Council to identify needs and translate them into actionable project plans with effective monitoring to drive implementation.

·            The Chair sought clarity on the flexibility available in terms of how SCIL and Section 106 funding could be more creatively used and aligned to support the Council’s budget process and pressures identified in order to address wider areas of need. In response, Councillor Mili Patel (Deputy Leader & Cabinet Member for Finance & Resources) highlighted the restrictions faced in terms of use of SCIL.  Recognising the issues highlighted, members were advised, however, that the Leader of the Council had already written to the relevant Minister lobbying for a relaxation of SCIL regulation to provide scope for greater flexibility in spending, with the rationale provided that the council had a better understanding of its needs and the Borough, and this was something that could be pursued to effect change.

·            The Chair sought further clarification on the primary reasons for the under allocation of SCIL and the greatest barrier to delivering more projects.  Whilst officer capacity was highlighted as one issue it was noted that there were often a range of factors involved including the identified of relevant and deliverable schemes.  Whilst effective monitoring arrangements were in place it was acknowledged that enhanced reporting on a thematic basis would also help better identify resource needs.

·            The Chair expressed concerns voiced from residents about the impact of developments on school places and GP appointments and sought officers' views on assessing the Borough's largest infrastructure needs. In response, Gerry Ansell confirmed that significant SCIL funds had been allocated for the provision of health services. It was highlighted that highways and transport infrastructure remained the most substantial and challenging for the Borough with ongoing discussions between the GLA, TfL and West London Alliance cited as crucial for supporting growth including delivery of the West London Orbital rail scheme. It was noted that tree planting could offer significant long-term benefits without being a major expense. The importance of identifying infrastructure projects with the greatest impact, both in terms of cost and benefit, was emphasised. The Borough Plan and Local Plan were considered good metrics for this assessment. David Glover (Head of Planning and Development Services) further added that while the available funds appeared substantial, the costs of some projects were equally significant. The ambition to provide step-free access at stations across the borough and the limited funds from TfL were also highlighted alongside the allocation of SCIL and Section 106 funds towards educational infrastructure including projects involving the United College Group and College of Northwest London,. The importance of exploring funding sources, pressures, and the optimal methods for funding and delivering projects moving forward was emphasised.

·            In highlighting issues regarding the provision of SCIL funding for certain schemes (including Moreland Gardens and the provision of the pedway providing access to Wembley Stadium) a need was identified to contrast this against what were felt to be other more immediate strategic priorities such as highway infrastructure and improvements given their daily impact on local residents. Whilst noting the current restrictions on its use, concerns were also raised about the perceived lack of creativity by the local authority in identifying potential uses for SCIL funds with specific concerns related to the provision of health facilities highlighted including (as an example) reference to Alperton, which had experienced substantial development and was in urgent need of expanded health facilities. Members observed that the ward allocation for SCIL required updating, as some wards listed in the committee report no longer existed. It was suggested that SCIL funds could be reallocated to the appropriate areas.

In response to the comments raised, Councillor Mili Patel (Deputy Leader & Cabinet Member for Finance & Resources) reiterated the position regarding  the funding allocation initially allocated to the Morland Gardens Scheme with additional clarification provided on the restricted use of SCIL relating to the scheme and educational provision which had initially been proposed. Regarding health provision in Alperton, David Glover (Head of Planning and Development Services) further noted that St Georges were building space for a health centre (utilising funding allocated in partnership with the health service) which was in the phase of development and were in discussions with the Integrated Care Board (ICB) regarding its use for GP provision.  In terms of follow up comments and suggestions regarding the provision of district heat networks, funds had been allocated to a project in South Kilburn, which was currently out for tender. Due to the costs associated with pipe works, district heat networks were most effective in areas with high densities of development. South Kilburn was identified as a suitable area due to its high density of homes and significant number of social housing units, providing an excellent opportunity for integration with new developments. It was noted that older areas posed more challenges, as buildings would need to be equipped with heat exchanges and networks to distribute the heat, and these areas were less likely to have the necessary development densities to make the project financially viable. The opportunity was also taken to highlight that Carbon Offset funding had also been utilised for retrofitting projects, which was considered a beneficial approach subject to the restrictions although identified in terms of its permitted use.  In terms of the pedway providing access to Wembley Stadium advised that this had involved an approach designed to improve the wider environment and public realm as well as releasing opportunities for additional development in the surrounding area which would also generate additional SCIL. In explaining the ward SCIL allocations contained within the committee report, it was clarified that the report intentionally referenced both previous and current wards, with the SCIL collected, allocated, and spent accordingly.

·            In response to further clarification sought, Minesh Patel (Corporate Director of Finance and Resources) outlined the role of the Council’s Treasury Management activity in terms of managing investment and borrowing activity and how this related to the management of SCIL funding in order to ensure its most effective use.

·            Further inquiries were made around the amount of SCIL spent in relation to libraries. In relation to Harlesden library, Martin Paglione Holley (Infrastructure Planning Team Leader) advised that this had involved match funding and had been designed to deliver an improvement to the library and infrastructure in the area. This was also the case for Preston Library which involved a new library and an improvement to existing facilities. In concluding members' views, the Chair reiterated the necessity of mapping SCIL expenditure to the needs within the Borough and examining how this aligned with identified budget pressures, securing the financial future of the Council, and creating improvements for benefit of residents.

·            Upon the collection of SCIL, members observed that the process of SCIL allocation and expenditure appeared to be slow and inquired whether the process was governed by deadlines. In response, Gerry Ansell (Director of Inclusive Regeneration and Employment) highlighted that larger projects took longer to deliver and were subject to the aforementioned governance process. Although the process seemed lengthy, it was as expected. One of the shortcomings identified by the government in the past regarding forward funding was that SCIL was triggered by the commencement of development, which in turn triggered the payment. However, this was considered to be not early enough. It was further noted that the process of SCIL was governed by legal stipulations.

·            With reference to the committee report, members observed the varying allocations for trees and then moved on to question the £10 million allocation, (noting that £213,000 had been spent) on the Northwick Park Spine Road project. In response, Martin Paglione Holley (Infrastructure Planning Team Leader) clarified that there had been two allocations made for the Northwick Park Spine Road project. The first allocation of £10 million was an underwriting from the Highways Infrastructure Fund (HIF). The allocation enabled officers to advance the project earlier, addressing potential timing issues with HIF payments and allowed officers to proceed with the project, with the HIF funding ultimately covering the expenditure and the remaining £213,000 would be returned to the SCIL pot.

The second allocation of £3 million was spent directly on the Northwick Park Spine Road to help complete the project. This was cited as a good example of using SCIL to expedite infrastructure development, thereby mitigating significant financial risks. David Glover (Head of Planning and Development Services) added that if the infrastructure had been advanced without timely funding, officers would have needed to find alternative funding sources. The Committee also heard that SCIL was utilised as it was designated for infrastructure projects.

·            Members observed that a significant amount of student accommodation was planned for the Borough but noted a lack of diversity and expansion in health services, including GP clinics, mental health services, Talking Therapies, and others. Details were sought on how SCIL could be utilised to plan for the needs of a new, younger community moving into Brent. In recognising the issues highlighted, Gerry Ansell noted the need to ensure they were considered as part of a strategic approach in terms of the way these needs were addressed. The Committee heard that regular discussions were held with health partners to consider the needs identified to ensure these were also reflected within development of the Infrastructure Delivery Plan in support of the Local Plan. The necessity of regularly reviewing this area was acknowledged. The review of the Borough Plan was considered a solid foundation for establishing a framework to address the diverse health needs of the Borough. The importance of short, medium, and long-term planning for future expenditure was highlighted, as well as the need for an overview of how funds were spent.  In response, Gerry Ansell highlighted that, despite planning for a certain profile of households, the actual development and occupation patterns, particularly in Wembley Park, had varied based on the different type of development which had come forward. While officers planned for household and population growth, the detailed profile did not always align with expectations, emphasising the importance of constant monitoring of the area.

·            Looking ahead, the Committee advised they would be keen to explore the opportunities available to further engage local ward councillors in the process of optimising SCIL usage as proactively as possible to meet the diverse needs of the Borough and to identify issues earlier.

·            Further details were sought on the consultation process in relation to Section 106 agreements. In response, Gerry Ansell noted that officers would consult an area around the site on each application and followed the guidance in the Statement of Community Involvement thoroughly to ensure that consultation was proportionate and carried out in the correct way. David Glover (Head of Planning and Development Services) added that when SCIL came in, the role of Section 106 changed particularly around mitigating specific impacts of development with the agreements often relating to specific works. Regarding wider mitigations, the efforts to address net zero did not just relate to the specific site or property or ward but in terms of those Section 106 contributions, these would be secured for the borough as a whole, allowing officers to focus and target their use in the most effective way.

·            Further clarification was also sought on the delivery of new community centres in Willesden Green with details sought about the potential utilisation of Section 106 to broaden public and community access. In addition, clarification was sought on the measures in place to ensure the Section 106 conditions would be upheld post-agreement. In response, Gerry Ansell clarified that while the planning system could allocate community space within developments, it did not manage these spaces, as they were not council-run facilities. Consequently, the operation of these facilities required the involvement of groups within the new communities.  As an example, Members heard that the Grand Union site included a community facility managed by a trust established to oversee and review its operations. Although the initial management of the facility was suboptimal, the existence of the trusteeship allowed for review and subsequent improvement in management. It was emphasised that while the council facilitated the provision of space, it necessitated community collaboration, with ward councillors and officers playing a key role in facilitating discussions between communities and developers.

·            The Chair further inquired about the role of the council in ensuring that Section 106 conditions were upheld in both the short and long term. In response, David Glover advised that compliance with obligations within Section 106 agreements was monitored and explained that a Section 106 agreement was a legally binding bilateral agreement between the council and the property owners, with obligations passed on to any subsequent owners, thereby binding successors in title.

At this stage in proceedings, the Committee agreed to apply the guillotine procedure under Standing Order 62(c) in order to extend the meeting for a period of 10 minutes to enable conclusion of the item and remaining business on the agenda.

·            In continuing, the Chair sought further clarity on instances where the council had taken legal action against organisations that had not complied with Section 106 agreements. Members referenced the committee report and noted that only 20% of SCIL funds had been spent, which was a minimal proportion, and were keen to understand the reasons for this. Other members queried whether the SCIL charging schedule was up-to-date and effective, and if it was indexed once the charges were agreed.

·            In response to the first query regarding enforcement action on Section 106 agreements, officers advised that they would need to seek the necessary details in order to respond outside of the meeting. Regarding the second query, Martin Paglione Holley (Infrastructure Planning Team Leader) explained that, in the last two years, a significant portion of SCIL funds had been allocated, although it often took time for projects to commence. It was noted that £7 million had been allocated for 2023-24 and £14 million for 2024-25, emphasising that it sometimes required time for schemes to start utilising the SCIL funds. In response to the final query, Martin Paglione Holley noted that a review of the SCIL charging schedule was ongoing to determine whether the rates per square metre for different uses should be updated. It was highlighted that there was currently a good balance, as the viability of the scheme was considered when SCIL was charged. Members heard that the borough was delivering a substantial portion of affordable housing, and increasing SCIL charges could potentially reduce this. Referring to the committee report, Martin Paglione Holley detailed the indexation from the original rates, noting that the original £200 per square metre for residential use had increased to £340. It was further explained that comparisons with other boroughs were not feasible due to differing values, uses, and scheme viabilities. David Glover added that the council was among the highest in the country in terms of total SCIL collected each year. Martin Paglione Holley further noted that the planning team worked effectively with various service areas, particularly the Debt Recovery and Legal teams, to ensure that when SCIL payments were received, officers pursued all extensions to recover the funds and associated legal costs.

·            In response to further query about why only 20% of SCIL money had been spent, members received context that this still equated to nearly £40 million which compared very positively to other boroughs. Gerry Ansell, whilst recognising the concerns raised, noted that larger projects required more time come forward and deliver with this process under review. In his view, projects did require some time to progress but the timescales for projects would be reviewed. The significance of timely delivery of projects was emphasised and that infrastructure funds were used as effectively as possible. It was confirmed that the borough’s spend was higher than most other boroughs.

·            As a final point, the Chair sought the views on what was felt to be an acceptable level of spend and performance in terms of delivery. Gerry Ansell responded that within the overall fund, there was a forward planning process. It was noted that it was difficult to specify desired figures without conducting benchmarking. The importance of maintaining a reserve fund for larger projects was further emphasised. The Chair expressed a keen interest in further examining SCIL expenditure in the future and, as further context, felt it would be helpful for officers to provide further detail to ensure confidence in the small percentage (20%) of SCIL funds being spent.   If the plan was to retain a certain amount of SCIL reserves to fund significant infrastructure projects in the future, the Chair stressed the need for transparency and clarity regarding those figures. The importance of identifying which SCIL funds could not be allocated immediately because they would be required in later years, and determining what was and was not feasible within the remit of SCIL, was highlighted.

Given the remaining time available the Chair bought the discussion to a close and in thanking officers and members for their contributions it was AGREED as a result of the outcome of the discussion to make the following suggestions for improvements and information requests:

Suggestions for improvements

(1)       Review the strategy for allocating and spending SCIL that ensures better alignment with local needs, a more balanced distribution of funds across borough plan priorities, and that facilitates creative investment into budgetary high-priority areas (e.g. key departmental budgetary pressure/ risk areas). This review should also consider how resident and councillor feedback can be more effectively incorporated into the SCIL spending strategy and how updates on SCIL-funded projects can be more clearly communicated to residents and councillors.

Information Requests

(1)       Provide a comparative analysis of SCIL allocation and spend over the last 10 years, using data from relevant local authorities. 

(2)       Provide further details on the process developers must follow to vary a S106 agreement complete 5 or more years ago, including the individuals or teams at the Council responsible for reviewing and deciding such requests.

(3)       Provide further details on the process for enforcing s106 agreements, including all options available, along with any accompanying examples of where the Council have had to follow this process.