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Developers’ cash never been spent
TENS of thousands of pounds paid by developers as long ago as the 1990s to help fund projects such as road improvements in York has never been spent.
A Freedom of Information request has revealed that City of York Council is still holding £20,000 of a Section 106 planning payment made in connection with the designer outlet development at Fulford in 1997/98.
Another £50,000 paid in 1999/2000 by the developers of the Travelodge hotel site in Piccadilly is unspent, as is almost £40,000 paid in 2000/01 at the Northminster Business Park at Upper Poppleton.
A further £25,000, paid in 2005/06 in connection with the construction of the Quality Inn, now Hotel 53, in Piccadilly has also never been spent.
Hotel owner Michael Hammill said the money had been intended for road improvements that never took place, and he had now written to the council to ask for the money back. He had been told officers werte looking into the matter.
Quantity surveyor Paul Cordock said he submitted the FOI request after someone else’s previous application had revealed that out of more than £3.2 million received by York through Section 106 agreements between 2008 and 2013, about £2.7 million was unspent.
He said he felt the council had a moral if not a legal obligation to let developers know it still had unspent money after more than five years and hand it back.
The Press asked the council whether it was entitled to keep such payments beyond five, ten or even 15 years, and whether it was legally or morally obliged to inform developers it still had such money and offer it back.
Mike Slater, assistant director of city and environmental services, said the sole purpose of Section 106 money was to invest it back into the community and infrastructure, so the additional demand created by, say, a new housing development, could be coped with.
“Any ‘unspent’ money can legitimately be held for a number of years as per the legal agreement,” he said.
“This allows money to be invested meaningfully into suitable schemes or projects which may require several years to establish.”
He said each development was dealt with on a case-bycase basis and sometimes, due to powers outside the council’s control, including the economic downturn or specific development delays, some 106 investments did not happen immediately.
“In some cases it may be several years before the contributions reach a level to allow the measures to be implemented, or the measures are actually required road junction upgrade required after a certain amount of development has taken place.”
He said most agreements had claw back clauses so that if the money was not utilised, it was “retrievable” by the applicant.