Money paid to the council for roads, schools and other infrastructure improvements by developers has “languished unused” for years and not been spent on public services.
An audit report has revealed the city council’s planning and finance departments were not effectively managing the contracts for contributions from developers – including what agreements were in place for certain work, what payments had been made and what had been delivered.
The amount of money held by the council has reduced from £7.4 million in March 2014 to £2.65m as of March this year. The total value of contributions on deposit is £33m – as well as a further £4m of tram contributions which are being held in a bank account gaining interest for the Newhaven extension for when construction begins.
The audit investigation found that in 2016, £2.3m in contributions from developers – called section 75 agreements – were sitting with the council for more than 10 years. This funding could need to be reviewed and possibly returned to developers if not used. But the council’s head of finance, Hugh Dunn, said he wasn’t aware of any money being returned to developers.
The report highlights that the situation has improved three years on – but issues still remain. The amount of historical money held as of March 2019 that is more than 10 years old is £790,000.
Green Cllr Chas Booth said: “It shows that the council has very poor control over how contributions are calculated and agreed, how money is collected and how it is used for the purposes intended. At worst, money which has been collected from some developers years ago has languished unused. Even more damning is that many of these failings were highlighted four years ago, yet not acted upon.
“Developer contributions are essential to building future public services: from school capacity, to community centres, parks, health centres, cycleways and affordable housing. There is already a massive shortfall in the funds needed to deliver that, so every penny needs to be used well.”
Conservative Cllr Joanna Mowat said: “Let us not fail on our watch and ensure that that improvement is delivered – I don’t think we want to fail again on this. This money is taken and then we cannot account for all of it and that’s actually quite serious.”
Cllr Neil Gardiner, planning convener, said: “We’ve made considerable progress since the audit was carried out, but a further phase of work is now required.
“It’s important that local communities have confidence in how we are using developer contributions and we’ll be publishing this information on an annual basis now.”