Community Infrastructure Levy miscalculated by Folkestone & Hythe District Council leaving Town & Parish Councils out of pocket

Folkestone & Hythe District Council have, according to Report AuG/21/12 released to the Audit & Governance Committee, miscalculated the Community Infrastructure Levy (CIL) leaving town and parish councils out of pocket for essential infrastructure/community projects.

CIL money can be spent by Town and Parish councils on the provision, improvement, replacement, operation or maintenance of infrastructure, or anything else that is concerned with addressing demands that development places on an area. This gives communities freedom and power to spend the money on a wide range of things, in consultation with the community.

The Council are required to pass a proportion of CIL receipts to Parish and Town Councils. This is 15% of CIL receipts to relevant Parish and Town Councils that do not have a Neighbourhood Development Plan and 25% in areas with an adopted Neighbourhood Development Plan, such as St Mary’s in the Marsh and Sellindge for example.

At the meeting of the Audit & Governance Committee to be held tomorrow, a report released by the East Kent Audit Partnership, who provide internal audits of the Council, shows the Planning Department has received a limited assurance, regarding it’s administration of the Community Infrastructure Levy scheme (CIL) and Section 106 agreements.

A Limited assurance means there are –

Significant gaps, weaknesses or non-compliance were identified. Improvement is required to the system of governance, risk management and control to effectively manage risks to the achievement of objectives in the area audited.

CIL is different to S106 payments in that it is levied on a much wider range of developments and according to a published tariff schedule. This spreads the cost of funding infrastructure over more developers and provides certainty as to how much developers will have to pay.  It is simpler and more transparent.

S106 contributions remain the primary means to ensure that developments pay for infrastructure that supports them. However S106 agreements are by their nature uncertain in terms of what they can deliver.  S106 contributions are negotiated between the local authority and the developer and can pay for anything from new schools or clinics to roads and affordable housing.

The limited assurance report states the following regarding CIL and s106 monies:

The annual indexation to the CIL charges was being miscalculated.

There is a lack of documented CIL income collection procedures.

The percentage of contracted hours that any officer i.e. the CIL/S106 and Enforcement Team Leader, or the Strategy & Policy Senior Specialist etc. spend administering the CIL scheme should be formally determined in order to support the Council retaining 5% of CIL funding to cover the administrative burden.

There were incidences identified of a lack of a full evidential trail on file to support the calculation of individual contributions.

There is a lack of consistent and timely monitoring of S106 trigger points to enable prompt invoicing for contributions due and to the application and calculation of S106 monitoring fees.

In 2019/20 the council collected just over £1 million in CIL and s106 as evidenced below.

The National CIL Regulations specify that CIL rates are subject to annual indexation using the national BCIS All-in Tender Price Index which in brief means charges are set by each Council and increased annually in line with an inflation-related index which changes for each calendar year.

As the CIL money was miscalculated, this means the amounts paid out to each Town & Parish council within the district  was incorrect, so Town & Parish Councils within the district will have been short changed by F&HDC.

Also we note “There were incidences identified of a lack of a full evidential trail on file to support the calculation of individual contributions.”

So what developers ought to have been paying in CIL money lacks any evidence trail. Such statements made by the Internal Auditor automatically should raise concerns that developers may well be not paying the right amount, or if they are, it’s not been evidenced, which is worrying.

Turning to s106 money, the statement made by the internal auditor which states:

There is a lack of consistent and timely monitoring of S106 trigger points to enable prompt invoicing for contributions due and to the application and calculation of S106 monitoring fees.

In short F&HDC are failing to collect s106 in a timely manner to pay for infrastructure which was agreed between the developer and the council.

This report raises concerns; and each parish and town council ought to be speaking to the Council to check to see if the amounts paid to them in 2019/20 and 2020/21 were correct, if not they need to collect any extra owed asap.

Finally, we do ask how many town and parish councils have consulted their communities on what infrastructure is necessary in their area, be it litter bins, playground equipement, or flooding personnel. You might want to ask.

The Shepway Vox Team

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