County Hall's £2.7m nest egg (From Worcester News)

County Hall's £2.7m nest egg

10:50am Tuesday 20th October 2009

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CASH-strapped Worcestershire County Council has almost £3 million from developers sitting in its coffers, we can reveal.

The council, which plans to make £45 million in cuts over the next four years, says it has 10 years to spend the cash though no schemes are currently in place.

When a plan for a major development is agreed, the council receives financial contributions from developers to cover the impact on the surrounding footpaths and highways. With housing developments, the county council’s children’s services calculates additional pressures on local schools directly linked to the number of houses being built.

So-called section 106 money can also be given to the council to cover the cost of traffic issues arising from housing, retail or industrial developments. Figures obtained by your Worcester News under the Freedom of Information Act revealed the county council has £2,754,098 in unspent section 106 money.

With each individual case the council has up to 10 years before putting any schemes in place to spend the money.

Worcestershire County Council received about £50,000 in Section 106 money when the new KFC restaurant was built at the Elgar Retail Park in Blackpole, Worcester.

The council said the money was set aside to be spent on improving walking, cycling or public transport facilities but no schemes are currently in place.

A spokesman added: “Section 106 agreements are part of the planning process and impose planning obligations on developers.

“The agreements normally provide for the developers to make financial contributions to the county council to cover the impact on the council as the education or highway authority, as a result of the developer being granted planning permission.

“Section 106 agreements can ensure that any physical engineering works to the highway, or works to encourage sustainable travel, particularly in the case of retail and leisure facilities, can be properly provided for.

“Details of agreements are discussed as part of the planning meeting in open session and are not secret.”

The spokesman stressed that financial provision made in a Section 106 agreement has to be used for a specific purpose and the money can’t be used elsewhere.

If the council doesn’t spend the money on the specified project within the timeframe agreed then it has to pay back the amount plus interest.

Tom Wells, chair of the overview and scrutiny comittee at the council, said: “It seems strange there is nearly £3 million in unallocated money sitting in the coffers at County Hall when we are on the brink of some savage budget cuts.

“Some of that money will have come from NHS planning applications such as the new Upton surgery. I don’t think it is ethical to ask the NHS to pay for bus stops, highways and footways especially when the money isn’t even being spent.”

Your Worcester News requested a full breakdown of the £2,754,098 unspent 106 money, but the council was unable to provide details.

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Your Say Your Worcester

jb, worcester says...
11:07am Tue 20 Oct 09

I'd like to know where the county council spent the £50k when KFC was built, as it's on an existing retail park with sufficient access points etc. In these times of recessions where builders and developers are going out of business it seems very strange that they can afford to pay the county council large sums of money which are sat in an account doing nothing. With no projects in the pipeline and money sat waiting I wonder what the 'time frame' is for paying money back? or does it just keep the door propped open for future developements? Interesting discovery WN.