We found £278m down the back of the sofa

Not us, you understand. (Though for those with incessant questions about “how is the Clarion funded?”, maybe that’s your answer.)

Oxfordshire County Council has found £278m down the back of the sofa. Remember that number: 278.

Here’s another number: 106. Section 106 sounds like an obscure early-80s post-punk band. It is, in reality, a crucial part of cash-strapped councils’ finances – and although Oxfordshire is not in the same dire straits as Birmingham, Thurrock or Woking, it can’t exactly afford to misplace £278m.

Section 106 of the Town & Country Planning Act 1990 (stick with us, it gets better) is how a local council requires housing developers to pay for Important Stuff. Broadly it goes like this: you build 1000 houses, you pay for a school. And a playground. And some footpaths. And a bit for the county museum. Etc.

Oxfordshire County Council writes a bill for said Important Stuff and sends it to the City/district council for consideration with the planning application. The developer gets planning permission, writes a cheque, and sends it to OCC. OCC scoots along to the nearest bank branch (or would, if there were any left) and pays the cheque in. The end.

The observant may have noticed we’ve missed out a crucial step, namely OCC takes the money out again and builds a school.

“It was clear that the Council was effective at collecting developer contributions”

Such is the rather understated minute of an OCC meeting in December.

The councillors of the Place Overview & Scrutiny Committee are not greatly troubled with press attention. Certainly not when the agenda item reads “Infrastructure Funding Statement 2022/23”, described as “detailing the developer contributions secured, spent, or received during the previous financial year”. That sound you just heard was a local newspaper scribe clicking their browser tab closed and going to find something to write about Jeremy Clarkson instead.

It goes on:

The Director of Environment, Planning, and Climate Change provided further detail. In 2022/23 the Council had secured 68 new planning obligations for developer contributions worth £124m. Of that, £28.2m had been spent in-year, the overwhelming majority on education and transport. A total of £62.3m of contributions were received in 2022/23 but the Committee was concerned to note that only 45% of this amount, namely £28.2m, was spent.

At this point eyebrows might have been raised a little. Continuing:

In total, including monies received in 2022/23, the Council was holding £276m for the purposes of future projects, and

But! The officer continued. Ok, we’ve banked £276m. But we have spent £6.7m on transport projects! We have spent £351,000 on libraries!

In response to the presentation, the Committee discussed multiple issues.

We bet they flipping did.

We've got a lot of what it takes to get along

This is not new. Oxford Clarion enquiries have turned up that, for several years and stretching across previous administrations, local councillors have been asking OCC officers what Section 106 money has been collected for use in their ‘patch’. Usually the response is an impromptu spreadsheet. There is, on occasion, slight disappointment that the councillor has “discovered” the pot of gold which the officer had earmarked for some priority or other.

When the councillor for Lower Bassett finds that £50,000 allocated to bus services remains unspent, and £100,000 for a playground, that’s big news in Lower Bassett. When that’s totalled up across 61 divisions – including those in Bicester, Didcot and Wantage where house-building has been intense – and reaches £278m, that’s big news in Oxfordshire. Or at least it should be.

But now we’ve found that £278m down the back of the sofa, we can spend it, right?

Unfortunately, Section 106 funds are not generic “free money”. They’re capital (building new stuff), not revenue (keeping stuff running), though in some cases the distinction is blurred. They have to be spent in the immediate area, on an agreed purpose directly relevant to the development. If we look at those purposes, OCC has banked payments earmarked for the following:

• Education: £142.6m
• Transport: £75.9m
• Libraries: £5.8m
• Other: £39.4m

Or we could do it by area, if you like?

• Abingdon: £34.1m
• Banbury: £25.1m
• Bicester & Kidlington: £39.5m
• Didcot & Henley: £35.1m
• Faringdon & Wantage: £62.9m
• Oxford City: £5.8m
• Thame, Wheatley & Watlington: £12.9m
• Witney & Burford: £35.5m
• Woodstock & Chipping Norton: £16.1m

What would you do with £62.9m in Faringdon & Wantage? The words “railway” and “station” have floated unbidden into our mind.

You may ask yourself: How did we get here?

Except it’s not that simple, because local councils never are and at this point we have to stop ourselves from diverging into a 5,000-word long read about national productivity and surely there has to be a better way of (continued page 94)

You can’t take the £48m earmarked for education in Wantage and say “actually, I fancy a railway station”. You can’t even take it and say “let’s build four new special schools”. That £48m will be made up of smaller sums, each with their own signed agreement saying “£4.3m towards the provision of a 1-form entry primary school on the Berryland Fields estate”. Turns out that Berryland Fields has become super popular with the retired and there are no kids of school age? Tough: the agreement says a 1-form entry primary school. Or maybe the houses are proving hard to sell, and a primary might be nice in ten years’ time but what we really need now is a special school? So we can swap the order, right? No. Nuh-uh.

This is kind of what has happened. Or in the words of the minutes:

There were fears that money was being assigned too narrowly and reducing the flexibility of the money, which then failed to benefit the community.

Of the £278m, £83.3m is tied to specific schemes; £108.9m is “held for specific use but no scheme proposed yet”; and £85.5m has some flexibility where it can be spent, though mostly within the same topic (e.g. education).

The minutes also hint at a disconnect between the OCC officers holding the purse-strings and the councillors and residents who will benefit from the spending:

Frustration on the part of both [councillors] and residents that residents were not getting the infrastructure they were owed from s106 moneys. The apparent lack of transparency over where the money was and how it was being spent – or not – compounded these frustrations… Officers acknowledged that greater partnerships were needed with localities and communities to determine what exactly was needed.

Fortunately, the carefully worded report does not at any stage suggest that officers have lost track of the money. The back of the sofa, we are assured, is carefully organised and well charted.

Everything is under control

It’s just that no one else has been allowed a look down the back of the sofa. To fix this, County Council officers are buying some new sofa-mapping software:

This work is ongoing as part of the S106 review project with the information currently held within the Council’s planning system being linked to Microsoft Power BI, which is a relatively new platform that allows self-service access for users to find information relating to developer contributions by service and division area. The functionality of this technological enhancement remains in development

(Those of you who have worked on government IT projects are probably not filled with optimism at this point.)

Still, the idea is that councillors will be able to see what money has been collected and “provide input into the process”. This has to be good. We are slightly perturbed that the sofa stash got to £276m before someone asked “hang on, shouldn’t the people of Oxfordshire, via their elected councillors, have a say in this?”.

Section 106 is not the only way of securing developer contributions. There’s a newer equivalent called Community Infrastructure Levy, which is more flexible about where the money can be spent: it doesn’t have to be tied closely to the development and can be deployed elsewhere in the district. Some of the £278m has come through this.

Community Infrastructure Levy is in operation in the City, South Oxfordshire and Vale of White Horse, but not West Oxfordshire or Cherwell. West Oxfordshire is currently on its fifth attempt (seriously) to introduce CIL, after the last effort – which, in a remarkable act of generosity/self-immolation, would have exempted the massive house-builders building the “strategic sites” from paying anything at all – ran into an entirely predictable furore.

Even then, CIL is clearly not a panacea. It’s in force in the Vale, and yet £69.2m is sitting around waiting to be spent in Faringdon and Wantage. Oxford City chose to let BMW off the £830,000 CIL they would otherwise have to pay.

There’s another obscure bit of 1980s legislation: Section 278. (It’s that number again!) Specific to highways, this enables developer-funded infrastructure like roads and cycle paths to be built during, not after, the development. Oxfordshire doesn’t use it much and it’s not clear why.

Make Benefit Glorious County of Oxfordshire

It will all be ok in the end, though, won’t it? The £278m will eventually get spent and we’ll have some lovely schools, cycleways and libraries? (Maybe even a Wantage railway station?)

Not necessarily. There is a risk developers may seek to claw back unspent money: indeed, some developers seek a clause that require the money to be spent within five years. And that £278m we mentioned is only what’s been banked so far: there’s another £291m on the way from in-progress developments. Before long, there could be half a billion down the back of the sofa. Some sofa.

This has been going on for years, across several administrations. The officers’ report says “some monies [have been] held for over 20 years without any movement other than accruing of interest”. In response to councillor concern about “the threat of handing back developer contributions for undelivered infrastructure”, the report agrees the money should be spent faster: “a corporate project is underway to […] speed up the delivery of projects”.

Both as Oxfordshire residents and reporters, Team Clarion are pleased to see the light which the scrutiny committee’s councillors (of all parties) have shone on this, and the officers’ evident determination to make things better. We have seen real improvements from developer funds, diligently shepherded into action through the unsung work of county officers. That there will be more of this is good news.

But we do have three wider questions that need answering.

• Our county desperately needs better infrastructure. Any parent, commuter, or hospital visitor will agree. Why has a pipeline of crucial, prioritised infrastructure projects – “the things we need” – not been drawn up until now? Why has Oxfordshire been reactive, rather than working towards a public, shared vision of the county we want?
• Finding developer funds down the back of the sofa is not unique to Oxfordshire. But it’s much worse here than elsewhere. Why does Oxfordshire not compare itself, as a matter of course, to best practice from other councils?
• What does this say about the officer/councillor relationship? Should the directors not have actively sought greater oversight and visibility of the £278m, instead of waiting for a scrutiny committee to ask awkward questions?

Next time you’re sitting in traffic, or riding along a road that urgently needs a cycleway, or taking your children to a school that needs more classrooms, remember: there is money for this. Lobby your local councillor to make sure it gets spent.

Footnotes:

• We’ve said £276m in some places and £278m in others. This is because the figures supplied for OCC’s December scrutiny meeting totalled £276m; by April’s meeting, it had risen to £278m.
• One more thing on Community Infrastructure Levy, the replacement for Section 106. The Government is now vaguely talking about replacing CIL with a third idea. This is an added complication to the proposals for Cherwell and West Oxfordshire to adopt CIL. You have no idea how much we want to do that 5,000-word long read about “surely there has to be a better way of running a country than this”.
• Berryland Fields is not a real housing estate. But it sounds like one, on the basis that estates are invariably named after the thing they bulldozed.