Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government what measures are in place to ensure that commuted funds in respect of planning obligations set aside under section 106 of the Town and Country Planning Act 1990 are spent in (1) an appropriate, and (2) timely, manner and represent value for money.

Section 106 obligations are negotiated between developers and local planning authorities, and can include obligations requiring developers to pay financial contributions. Where they are used to support the grant of planning permission, section 106 obligations must comply with regulation 122 of the Community Infrastructure Levy (CIL) Regulations 2010 (as amended), which states that the obligations must be necessary to make the development acceptable in planning terms, must be directly related to the development, and must be fairly and reasonably related in scale and kind to the development.

Section 106 agreements should normally include clauses stating how commuted funds will be used, and clauses that allow for their return, after an agreed period of time, where they are not used. Local authorities that receive contributions must publish Infrastructure Funding Statements annually, which set out what has been received and spent through developer contributions, providing transparency for communities.

Under the new infrastructure levy proposed in the Levelling-Up and Regeneration Bill, levels of negotiation in the system will be reduced, while retaining a constrained role for section 106 agreements. Local authorities will be required to produce infrastructure delivery strategies to illustrate how they intend to spend Levy proceeds in a timely and effective manner, such that new development is accompanied by the infrastructure that local communities need - like roads, schools, and GP surgeries.