Developers and Section 106 - important information

I think we have to be clear about developers and their responsibilities as regards Section 106. For those who do not know what a Section 106 is, this is cash and/or other things that a developer has to hand over to a council in exchange for making a profit on their development. Usually, the more profit they make, the greater the Section 106 requirement - perhaps a community centre or affordable housing or other benefits for a community. Fro example, if I understand the article in last week's Midweek Herald correctly, Persimmon in Honiton has agreed to give thecouncil £500,000 for building their new estate and that has been pledged towards a new community centre

HOWEVER it is my understanding that the developers in Seaton are suggesting that the cost of raising the flood plain and moving the tramway is so high that there will be very little (or no) Section 106 benefits available. They have to prove this by something called "open book accounting" - i.e. letting the council see their accounts for the project. If the council agrees with them that their accounts show that they will make very little profit from the scheme, they can agree to forgo a Section 106 requirement in order to get a development done. And the development will then be only shops and houses - there will be no requirement to do anything else. (They will have to do things like "public open spaces" but this will be ONLY for the 450 homes, not for the whole community).

When (or if) there are any benefits, it is entirely up to the local council to decide how to spend the money. IT IS NOT EVEN OBLIGED TO SPEND THE MONEY IN SEATON. If they decide to use the money for affordable housing, this housing could be built anywhere in East Devon; if they decide that all the money should go towards funding the visitors centre, then that is where the money will go; if they decide to use the money to build an extension at The Knowle, that is where it would go. It is almost certain that they will not fund anything tourism oriented - they will leave that to market forces i.e. if a tourist operator thinks he can make a buck out of Seaton he can put up a planning application and see where it goes; however, the council is under no obligation to go looking for such operators.

Be clear - do not rely on Section 106 for regeneration in Seaton.