East Staffordshire Borough Council is having to return Section 106 funding that was received from a developer, for building off-site affordable housing.
The sum involved was £398,447 and was returned because the spending deadline had expired on 27th March 2023.
Cllr Rob Hawkins, Cabinet member for Regeneration and Development, said: “It was with the deepest sadness, that I had to sign a Regeneration and Development Executive Decision today. I considered asking ESBC to refuse to repay the money, but any legal action would have been lost with significant cost to the Council.
The developer was quite within their legal rights to ask for £398,447 back. As well as £398,447, the developer was entitled to index linked interest payments which were calculated as £21,691.94.”
Following negotiations with officers, the developer has agreed to waive the interest payment as a sign of goodwill. It has also been agreed that the money that has been returned will be spent on a separate housing scheme, outside the Borough, which will provide 12 equipped houses for people with learning needs.
Cllr Hawkins also added: “The previous Council Administration had £398,447 to spend on affordable housing in East Staffordshire, for 5 years, from 27th March 2018 to 27th March 2023. Only the previous Administration can explain their decision making on this issue as the Labour Party took office in May 2023.
I have asked Officers to double check that there isn’t any more Section 106 affordable housing funding, close to its expiry date, which has not been spent. I intend to bring forward, by the end of the year, a revised Section 106 Funding Policy that will show what funding ESBC has received, how it has been spent, and what is left. This will be updated regularly, following an agreed timetable. This will also be posted on the website and open to public scrutiny.”