Monitoring Section 106 Agreements and Dealing with Developer Contributions

Covid-19 Update: At this time requests regarding the availability and release of developer contributions to projects will be progressed as normal.  However the actual release of funds to agreed projects may be delayed depending on delivery timescales as all non-essential funding release has to be confirmed through a separate authorisation process at this current time.

The Planning Service is responsible for monitoring development and ensuring that the obligations set out in Section 106 agreements are met.  For new housing developments, the Council will not take any action regarding unmet planning obligations against individual house owners; planning obligations are a Land Charge so this is a question we are often asked when someone is buying a house and undertaking a local authority search.

The Council is obligated to hold financial contributions made by developers and ensure that these are passed on to the appropriate party and spent in accordance with the Section 106 agreement.

Sometimes the contribution is for something very specific (such as providing the expansion of a named school) and sometimes it is for a certain type of project (like providing public art in the vicinity of the development).

The Council is required to monitor the financial contributions it is holding and ensure they are spent for the purpose it was negotiated for, and in a timely manner.

The table below shows the process the Council follows to manage the release of financial contributions from developers for specific projects.

Tracking what developer contributions have been received by Milton Keynes Council

Each s106 agreement contains development “trigger” points when developers are required to pay any specified financial contributions.  As the development progresses the Council tracks it to determine when a payment is due from the developer.

 

When the developer makes a payment the monies received are held by MKC.  MKC will release a periodic snapshot to show what monies have been received, what development the money is related to, and the purpose of the contribution.

Planning and programming the use of developer contributions

The majority of developer contributions are secured to support the delivery of Milton Keynes Council plans and strategies (e.g. education, transport and highways, communities and leisure, culture, public realm), or statutory services that the Council must deliver (like waste).  It is also the Council that is obligated in the legal agreement to secure the lawful use of contributions.  The Council will therefore oversee the use of all contributions.

 

The Council has a standard method of planning and delivering projects, controlled by a number of programme boards.  The programme boards monitor monies received and programme its use to specific projects, which might include;

  • delivery by Milton Keynes Council itself; or
  • delivery by another body (e.g. a Town or Parish Council).

 

Where contributions have been specifically secured for a body other than Milton Keynes Council (such as for health, emergency services voluntary sector organisations, or Town and Parish councils), then these bodies will plan and programme the use of the monies.

Funding Requests from third parties

Any other organisation with an interest in using developer contributions can make an enquiry to planningobligations@milton-keynes.gov.uk  The request will be forwarded to the relevant service area within the Council for review, or alternatively the relevant organisation (e.g. the NHS).

Funding Release

The process for the release of funds will be administered by the Council’s Planning Service once requested by the relevant Council service or other relevant organisation.  To initiate funding release email planningobligations@milton-keynes.gov.uk

 

Release of funding will only follow key milestones in a project – normally once a project has the requisite Board or Committee approval to proceed (including the relevant Council Programme Board), and the delivery methods and timescales have been agreed.

 

The current practice includes giving 10 working days’ notice to relevant parish councils and local Ward Councillors that the funding will be released.  It is expected that those delivering a project will have fully engaged and communicated with interested parties prior to requesting to release the funds.

 

Funding will only be released to organisations outside of the Council by way of a signed agreement, which is to ensure the money is spent in a timely way and in line with the relevant obligation in the related Section 106 agreement.

Monitoring and Accountability

From December 2020 the Council will be required to publish an Infrastructure Funding Statement.  This will detail developer contributions received and spent in a financial year (April to March).  Anyone who has received developer funding for a project will be required to report back to the Council’s Planning Service so this information can be included in the annual report.

 

The Council are also bringing in a new monitoring system – called Exacom – which it will use to track individual planning obligations in legal agreements, including the receipt, allocation and spend of developer contributions.

Last Updated: 6 April 2020