{meta} Agenda item - Greater Manchester Mayor's Walking and Cycling Challenge Fund - City Centre Salford Projects Section 106 Match Funding

Agenda item

Decision:

Salford City Council - Record of Decision

 

I Paul Dennett, City Mayor, in exercise of the powers contained within the City Council Constitution do hereby approve:

 

1.    The proposed expenditure of £1,991,550.34 of Section 106 contributions received towards the MCF funded ‘Active Centres, Corridors & Neighbourhoods Project’ in City Centre Salford.; and

 

2.    The intention to allocate future specific Section 106 contributions not yet received totalling £2,146,154.90 (index linked) as Council match funding towards the MCF funded ‘Active Centres, Corridors & Neighbourhoods Project’ in City Centre Salford.

 

The Reasons are:

 

  1. Business cases are currently being developed for submission to TfGM.

 

  1. A successful business case is fundamental to securing project delivery funding for the MCF ‘Active Centres, Corridors & Neighbourhoods Projects’ in City Centre Salford.

 

  1. The Council needs to be clear on its ability to provide match funding as part of this business case process. 

 

  1. S106 contributions make up a significant proportion of this match funding.

 

Options considered and rejected were:

 

  1. Meet the match funding obligation from elsewhere in Council resources.  However, this would place additional pressure on the Capital Programme.

 

  1. Do not deliver the programme of proposed walking and cycling schemes in City Centre Salford.

 

Assessment of Risk: Medium

 

1.    Subject to the submission/approval of business cases, City Centre Salford MCF scheme delivery funding will be awarded on the basis that the Council is able to make a match funding contribution of £5,555,668.  A significant proportion of this, £4,118,342.30 has been identified to come from appropriate S106 contributions.  Should this contribution from S106 allocations not be agreed within the Council, this would leave a shortfall which would need to be met from elsewhere in Council budgets.  The other alternative for the Council would be to not proceed with delivering the City Centre Salford MCF schemes.

 

2.    A proportion of S106 contributions (£2,146,154.90) is still to be paid by developers in accordance with the timescales established in the specific agreements.  Timing of these payments should align with programming of MCF scheme delivery. Delays in the programmed delivery of developments could potentially lead to delays in receipt of S106 payments.  In turn, this could leave a shortfall in the Council’s match funding resource, which would need to be met from elsewhere in Council resources until the S106 payments are received.  As mentioned in this report, a low risk strategy to match funding was adopted at the time of submitting the MCF funding bids.

 

3.    Since submission of the MCF funding bids, one development is currently on hold at Outwood Wharf Phase 2.  Lengthy delays in this development progressing could lead to a potential shortfall in match funding of £288,000, which would need to be met from elsewhere in Council resources.

 

The source of funding is:

 

Section 106 Contributions received to be allocated from the development(s) at:

 

§  £492,878.92 from Wilburn Street Basin (Section 106 Ref: 293 - 14/64851/FUL)

§  £498,000.00 from Dandara Chapel Street (Section 106 Ref: 312 - 14/65224/FUL)

§  £274,421.81 from Trinity Riverside (Section 106 Ref: 323 - 16/67780/FULEIA)

§  £726,249.61 from Gore Street (Section 106 Ref: 353 - 15/66415/FUL)

 

Future Section 106 Contributions to be allocated from the development(s) at:

 

§  £414,279.75 from Riverview (Section 106 Ref: 328 - 16/67779/FULEIA)

§  £463,922.75 from Middlewood Locks (Section 106 Ref: 288/306 - 13/64081/OUTEIA)

§  £88,887.10 from Carpino Place (Section 106 Ref: 349 - 16/68118/FUL)

§  £717,623.30 from Embankment West (Section 106 Ref: 357)

§  £173,442.00 from Outwood Wharf Phase 1 (Section 106 Ref: 316A - 15/66823/OUT)

§  £288,000.00 from Outwood Wharf Phase 2 (Section 106 Ref: 372 - 18/71512/FUL)

 

All figures quoted above are plus index linking.

 

Legal Advice obtained:  Robert Irvine

Section 106 contributions can only be expended in accordance with the terms of the planning obligations outlined in the relevant agreement.   If the Council cannot demonstrate that the contributions have been expended in accordance with the agreement, there is a risk that the contributions, or some of them, may need to be repaid to the developers.  This report explains why officers are of the view that the expenditure set out herein would be in line with the terms of the respective agreements.

 

Financial Advice obtained:  Natalie Birchall

The overall City Centre MCF programme is valued at £32.50m comprising: £26.94m MCF, and £5.56m of local match funding by SCC.

 

Mayors challenge funds must be spent by the end of March 2022.

 

Programme entry development funding for the schemes outlined in this report was approved in July 2018 & June 2019. Council development costs for progressing designs and business cases for these schemes are to be met from MCF funding. The Council is in the process of reclaiming these costs from the GMCA through the agreed quarterly claims mechanism.

 

The reports sets out a proposal to allocate S106 contributions totalling £4.137m (plus index linking) towards MCF funded schemes in City Centre Salford.

 

As at December 2020, the following S106 Contributions received to be allocated from the development(s) at:

 

§  £492,878.92 from Wilburn Street Basin (Section 106 Ref: 293 - 14/64851/FUL)

§  £498,000.00 from Dandara Chapel Street (Section 106 Ref: 312 - 14/65224/FUL)

§  £274,421.81 from Trinity Riverside (Section 106 Ref: 323 - 16/67780/FULEIA)

§  £726,249.61 from Gore Street (Section 106 Ref: 353 - 15/66415/FUL)

 

A proportion of S106 contributions (£2,146,154.90) is still to be paid by developers in accordance with the timescales established in the specific agreements.  Timing of these payments should align with programming of MCF scheme delivery. Delays in the programmed delivery of developments could potentially lead to delays in receipt of S106 payments.  In turn, this could leave a shortfall in the Council’s match funding resource, which would need to be met from elsewhere in Place, capital programme.

 

Individual scheme reports will be brought forward for approval at appropriate times setting out the full funding details on a scheme by scheme delivery.

 

Procurement Advice obtained: N/A

 

HR Advice obtained: N/A

 

Climate Change Advice obtained: Mike Hemingway

Climate change implications are considered through the planning application process, and where relevant appropriate mitigation will be identified through planning conditions and/or planning obligations. The Section 106 contribution(s) can only be used towards specific mitigation in accordance with the respective Section 106 agreement. This project is aimed at promoting less reliance on the motor car and encouraging people to move through the area by cycling, walking and using public transport. 

 

The following documents have been used to assist the decision process:

Report of Strategic Director for Place 22nd February 2021: –

CITY CENTRE SALFORD

‘Active Centres, Corridors & Neighbourhoods Project’

GM MAYORS CHALLENGE FUND FOR WALKING & CYCLING (MCF)

SECTION 106 MATCH FUNDING CONTRIBUTIONS

 

Contact Officer:  Perry Twigg                             

Telephone number: 07966 316309

 

  • This decision is not subject to consideration by another Lead Member.
  • The appropriate scrutiny to call-in the decision is the Growth & Prosperity Scrutiny Panel.                       

 

 

Signe: Paul Dennett

City Mayor

Dated: 22 February 2021

 

 

This decision was published on Monday, 22 February 2021                                            

This decision will come in force at 4.00 p.m. on 1 March 2021                                                      unless it is called-in in accordance with the Decision Making Process Rules.

 

 

 

Supporting documents: