Developer payments fund millions of pounds of extra housing

Money from developers has funded millions of pounds of homes to be let at reduced rents, councillors were told this week.

The money, known as developer contributions, also went towards the cost of supporting local jobs, revamping children’s playgrounds and school costs.

In all, Brighton and Hove City Council allocated almost £10 million to the various projects, of which it spent £4.5 million, including £1.56 million for “affordable” homes in Victoria Road, Portslade.

The council also spent £924,000 of the money on buying property to be let for reduced rents and £636,000 on a city-wide programme of playground refurbishments.

Among the playground revamps to receive funding were those in Hollingdean Park, Knoll Park, Queen’s Park, Rottingdean Recreation Park, Saltdean Oval and Woollard’s Field, also known as Maggie’s Corner. Other projects to receive funding included one at Whitehawk Hill North as well as the Moulsecoomb Forest Garden and Wildlife Project.

The details were shared in a report to the council’s Culture, Heritage, Sport, Tourism and Economic Development Committee at Hove Town Hall on Thursday (9 November).

The two sources of developer contributions are known as “community infrastructure levy” (CIL) and section 106 payments – agreed under section 106 of the Town and Country Planning Act 1990.

Developer contributions are intended to offset the effect of new building schemes such as housing and offices on the local infrastructure such as roads, schools and open spaces.

And developers planning to build bigger housing schemes are expected to provide some of those homes for sale or rent at affordable rates – or a “commuted sum” to provide affordable homes elsewhere.

The council entered into 13 planning agreements in the past financial year which are expected to lead to the building of 359 affordable homes for rent or shared ownership.

The affordable housing contributions are not captured in the financial totals but a report to councillors said that at the start of April last year the council had £23.6 million in section 106 contributions to spend.

The council spent £4.5 million during the 2022-23 financial year and received a further £3.6 million in section 106 payments, leaving a balance at the end of March of £22.7 million.

The biggest contributions came from three projects, including almost £1.5 million for affordable housing from 87 Preston Road, Brighton, formerly part of City College, now the Greater Brighton Metropolitan College.

The housing schemes on the old KAP car showroom site, in Newtown Road, Hove, and Anston House, in Preston Road, Brighton, generated more than £700,000 each.

The money from those two schemes was allocated for sustainable transport, education and recreation, with some of the Newtown Road money also used to support local jobs.

The amount of section 106 money received by the council in 2022-23 fell from £5 million in the previous year to £3.6 million.

This was partly because some of the money that would have been paid as part of a section 106 agreement would now be paid in the new community infrastructure levy.

But developers also submitted fewer major planning applications in the past year, with a bulge before the council set the charging levels for the community infrastructure levy.

The levy, which has now largely replaced section 106 agreements, brought in just over £2 million in 2022-23.

About three quarters of the CIL receipts are due to be spent on city-wide projects which have already identified by the council.

But a new fund, to be known as the Enhance Brighton and Hove Fund, is to start next year. It will use CIL money to fund neighbourhood projects in wards where plans have been turned into buildings.

Labour councillor Alan Robins, who chairs the Culture, Heritage, Sport, Tourism and Economic Development Committee, said: “Early next year we will be launching our Enhance Brighton and Hove Fund.”

Councillor Robins said that the council would be asking residents in wards which have attracted community infrastructure levy funds how the money raised should be spent.

Residents would be asked which council facilities or capital projects they would like to see this money spent on in their communities.

Several of the 23 electoral wards had already accumulated funds totalling more than £400,000, with the rest expected to attract funding in the coming months and years.

He added: “Each ward will have its own budget to spend on the projects that residents support the most.

“In future, as qualifying developments begin in other areas, more residents will have the chance to influence spending on the services and facilities they value most in their neighbourhood.”

Labour council leader Bella Sankey said that £3.9 million of section 106 funding was being used to buy 60 new council homes, including 38 flats in the Kubic Apartments scheme in Whitehawk.

Developer payments of £1.27 million would also enable the council to put back facilities in the Kingsway to the Sea new public park that would otherwise have had to have been scaled back.

She said that £1.4 million was going towards sustainable transport projects including £630,000 for pedestrian crossings, drop kerbs and Beryl Bike stations city-wide.

Councillor Sankey added: “Additionally, we’ve earmarked £6.8 million for future investment to support improvements to school buildings or facilities and the schemes in our Sports Strategy, when they are ready to be taken forward.

“We are committed to accelerating the allocation of section 106 and CIL funds so that our local communities benefit from the development schemes and construction projects under way across the city.”