WORRIED ABOUT CHANGES TO DEVELOPER CONTRIBUTIONS? READ THIS.

By Jonny Moore, Managing Consultant

The Department of Levelling Up, Housing and Communities will shortly be publishing detail on proposed reforms of developer contributions as part of its consultation on the Levelling Up & Regeneration Bill.

A lot of the debate, reaction and questions will understandably be about how the levy will be calculated, implemented, and operate alongside the current system. But in a landscape where the means for funding capital projects is limited, costs are increasing, and infrastructure is under more pressure – let’s not forget the fundamentals. Using developer contributions efficiently and effectively has never been more important for communities to mitigate the impact of new development.

At Inner Circle we have worked with over 30 councils across the country to learn what works well and what can be improved in the systems and processes councils use in collecting, allocating and spending developer contributions. In collaboration with the Planning Advisory Service (PAS), we have created guidance aimed at improving the way councils prioritise and spend developer contributions.

We believe this guide provides a vital roadmap for local authorities seeking to work their way through the impact of the proposals, which will replace the current system with a non-negotiable levy replacing S106 agreements and require local authorities to produce Infrastructure Delivery Strategies. Councils will have to work with infrastructure providers to set out infrastructure requirements and high-level priorities for spend, demonstrate deep understanding of the needs of communities – and deliver what they’ve promised.

We believe our suggestions can benefit all local authorities as we move towards changes to developer contributions. Here’s a brief run-down of some of the factors that are crucial for successful infrastructure delivery:

• Councils that use developer contributions effectively invariably have a clear understanding at a corporate leadership level of their strategy for how developer contributions will be used, and adequate resources at an officer level to implement it.
• Successful delivery depends on an up-to-date strategic framework that includes the Local Plan and provides the framework for informed decisions as to how developer contributions are used, or which projects are prioritised for funding. This should be supported by up-to-date evidence of infrastructure needs (through the Infrastructure Delivery Strategy), which provides a pipeline of projects to which funding can be allocated.
• Governance structures must be in place, to make recommendations or decisions about how developer contributions are used alongside other forms of capital funding, with representation from across the council to ensure an integrated, corporate approach. These can be complemented by governance at an officer level for day-to-day infrastructure planning matters (such as owning Infrastructure Delivery Strategies).
• Processes used to allocate developer contributions must be clear and transparent, and understood by all stakeholders, and the IT for managing financial data and project management systems must be effective and fit for purpose.
• And last but absolutely not least, there must be appropriate and effective resources and capabilities for project delivery, and monitoring and reporting processes must be in place.

For more details on how best to plan and deliver infrastructure using developer contributions as well as other sources of funding, please reach out to the Inner Circle team at [email protected]

If you are interested in the support that PAS can offer to your council in spending developer contributions, please write to [email protected].