Agenda item

Cllr Judy Roberts, Cabinet Member for Infrastructure and Development Strategy, Paul Fermer, Director of Environment and Highways, and Robin Rogers, Director of Economy and Place, and Nicholas Perrins, Head of Strategic Planning, have been invited to present a report on the Infrastructure Funding Statement and s.106 Funding.

The Committee is asked to consider the report and raise any questions, and to AGREE any recommendations it wishes to make to Cabinet arising therefrom.

Cllr Judy Roberts, Cabinet Member for Infrastructure and Development Strategy, Paul Fermer, Director of Environment and Highways, and Robin Rogers, Director of Economy and Place, and Nicholas Perrins, Head of Strategic Planning, were invited to present a report on the Infrastructure Funding Statement and s.106 Funding.

Cllr Liz Leffman, Leader of the Council, and, Cllr Pete Sudbury, Deputy Leader of the Council with Responsibility for Climate Change, Environment and Future Generations, were also present to answer questions Committee Members had on the report.

Tom Hudson, Scrutiny Manager, clarified that a representative from Finance had been requested, however apologies were sent by Finance due to the short notice of the request.

The Chair summarised the historical context before the Cabinet Member for Infrastructure and Development Strategy explained that the Infrastructure Funding Statement (IFS) was a statutory document required to report the collection and spending of infrastructure funds, including Section 106 (s.106) and Community Infrastructure Levy (CIL). The statement showed effective fund collection with significant receipts, and ongoing efforts were aimed at improving the management and spending of these funds. The predicted spend for the upcoming year was around £60 million, mainly on large projects like the A420 improvements. The complexity and inflexibility of the Section 106 system, due to its reliance on legal contracts, was acknowledged, highlighting the need for improvements.

The Head of Strategic Planning highlighted the urgency to speed up s.106 project delivery for community benefits. Diagnostic work had reviewed the £260 million fund, prioritising smaller projects for early release. Current system issues for fund management were identified, with improvements targeted by year-end. A dashboard trailed in locality meetings provided live data, with plans for wider use. Services were reviewing s.106 funds to fast-track capital program projects, and transport has identified about £10 million for acceleration. Flexible new agreements allowed for alternative projects, to allow a more flexible use of money. Additionally, CIL governance changes had been proposed to align with the County Council’s strategic priorities and capital programme. These changes were aimed at ensuring CIL funds were directed towards projects that supported the broader strategic goals of the Council, with West Oxfordshire and Cherwell expected to adopt CIL within a year.

Members requested an update on the progress of the promised dashboard, which would have allowed them to track projects, including timelines and funding sources for individual projects. Although the dashboard had been demonstrated at locality meetings, it had not yet been released for general use.

The delay in releasing the dashboard was primarily due to finalising a Microsoft license agreement. This issue was being addressed with urgency, aiming to resolve it as soon as possible. The objective was to have the dashboard operational by the end of the financial year, although there was a strong desire to expedite this process.

Members expressed significant concerns regarding IT failures as a major obstacle in managing s.106 funds and their utilisation in physical projects. Officers present attempted to elucidate the existing IT systems employed for handling these funds and identified their shortcomings.

The Council used three main systems to manage s.106 funds and projects: MasterGov (for planning obligations), PPM (for project management), and SAP (for finance). These systems did not communicate effectively with one another, leading to delays and inefficiencies. Owing to this lack of integration, there was a dependency on manual processes, such as using spreadsheets to transfer data between systems. This manual intervention was time-consuming and susceptible to errors.

There was an acknowledged need to enhance the integration of these systems. A solution involved creating a data warehouse system that extracted data from underlying systems to offer a comprehensive, real-time view of funds and projects. Concerns were raised about the Council's capacity to develop appropriate systems to handle s.106 funds and projects, particularly questioning whether the in-house IT staff possess the requisite skills and capacity to implement the necessary changes.

The discussion underscored that the IT system challenges were not exclusive to s.106 but were indicative of broader systemic issues within the Council. There was a pressing need for a comprehensive IT strategy to resolve widespread issues across various departments.

Concerns were raised about s.106 funds being unspent and potentially returned to developers due to project delays and system inefficiencies. Members were surprised that only £12,000 had been returned and expressed worries about how much of the s.106 money was at risk of being returned unused in the next year.

Additionally, Members feared that the money from s.106 agreements may not cover project costs because of time delays and inflation. For instance, a project initially estimated at £90,000 rose to £150,000 over time, showing the impact of these factors on costs.

Members asked if the concept of front funding projects, using Council money to start projects and then recovering the funds from s.106 contributions, had been considered. Officers confirmed that this idea had been discussed as part of broader discussions on project funding methods. The main concern with front funding projects was the need for high levels of coordination and integration between departments and systems to ensure proper initiation of projects and accurate tracking of funds.

The Deputy Leader left the meeting at this stage.

Members expressed a desire for more flexible s.106 agreements to enable more efficient and effective allocation of funds. It was anticipated that increased flexibility will expedite the process.

While striving for flexibility, it was crucial that all new agreements operated within the necessary legal parameters. This approach aimed to avoid the rigidity of older agreements, which often specify projects too narrowly and made adaptation to changing circumstances or needs difficult. The implementation of these more flexible agreements was part of ongoing efforts to enhance the efficiency and effectiveness of s.106 fund utilisation.

Members highlighted concerns, within the report, regarding the absence of transparent governance for s.106 funds. It was noted that while there had been progress on the governance of CIL, the governance structure for s.106 funds were not well-defined with uncertainty around the oversight and management of the funds.

The dashboard, once fully implemented, was expected to help with member oversight by providing live data on s.106 funds, allowing members to see the status of funds and projects in their areas. The dashboard was intended to create clear lines of oversight for projects and the allocated funding. However, the dashboard had not yet available at the time of the meeting.

The responsibility for overseeing s.106 money did involve multiple departments. The planning obligations team managed the initial collection and recording of funds, while the delivery teams were responsible for implementing the projects. There was agreement for a need for better integration and communication between these teams to ensure efficient use of funds.

It was also acknowledged that going forward the governance of s.106 funds was to be aligned with the County Council's strategic priorities and capital programme to ensure that funds were used effectively for projects that align with broader strategic goals.

The Committee resolved to AGREE recommendations to Cabinet under the following headings:

• Investigate using contractors and outside IT architects to create a suitable solution, which did not rely on three unintegrated pieces of software.
  • Addressing IT system issues was highlighted as a critical area, with a focus on ensuring that different systems (MasterGov, PPM, SAP) were integrated.

• Investigate tools such as ‘Backcasting’ to improve the planning and execution of significant projects and funds.

• Clarification over the responsibility for spending s.106 money to ensure accountability and effective utilisation of funds.

• Undertaking the use of the Local Government s.106 self-assessment tool to evaluate and improve current practices.

• Investigate the arguments outlined in The Planning Fallacy and implement measures to avoid related delays in project delivery.

• Clarity around the release of the dashboard to ensure that members have access to live data and can monitor the progress of s.106 funds and projects.

• Implementing a risk rating for existing money not being spent in time to identify and address potential issues proactively.

The Committee also AGREED to the following actions:

• Progress updates to come to each Place Overview and Scrutiny meeting on s.106 spend and the IT systems.

The Committee made the following observations concerning the IFS and s.106 funding report:

• The IT systems of the Council were inadequate to the needs of the Council, especially in relation to s.106 funds.

• General dissatisfaction with the report due to the number of typos and financial miscalculations. This made it challenging for members to scrutinise the report effectively

• Members noted the absence of representatives from IT or finance who could explain the report and answer questions. This absence was particularly problematic given the technical and financial issues discussed.