CIL management and monitoring fee
The CIL Regulations state that up to 5% of CIL receipts can be spent on administering the Community Infrastructure Levy. This will pay for dedicated CIL officers to monitoring and manage the scheme as well as specific software to assist with the administration.
S106 – Management and monitoring fees
Management of Section 106 Agreements
The council starts managing and monitoring each S106 agreement from the moment it's signed. This is a complex process as the individual S106 agreements contain different trigger points and obligations.
The council employs a dedicated CIL & S106 monitoring team to oversee this complex programme and ensure compliance with, and ultimately the delivery of, the obligations secured through S106 agreements.
The council has an established process for recording and monitoring S106 agreements and other relevant legal agreements, including a database with details of all agreements
To ensure the efficient operation of the S106 process the council will:
- monitor all ‘trigger points’ (stages of development)
- ensure that benefits and/or monies identified in the Agreements appropriate to that trigger are secured
- manage the receipt of monies and the setting up and monitoring of the bespoke accounts relating to each mitigating project
- procure the required works from third parties where necessary; and manage spending of S106 money and infrastructure delivery
In order to compensate for any loss of value of received S106 receipts arising from inflation, pending expenditure all monies received will be held in interest bearing accounts. Any interest accrued will be applied by the council to S106 related projects.
Specific numerical information relating to prices, formulas and, subsequently, the level of contributions due will need to be updated on a regular basis in order that the document remains relevant. The changes will be published in the Annual Monitoring Report. Any amendments to fee schedules will also be published on the website.
Where a S106 agreement contains a financial obligation, details of how to make the payment will be provided on the demand notice or invoice which the council will issue.
The payment will be logged onto the council’s systems, once received.
Once a financial contribution is received by the council, the service area with the responsibility for delivery of the S106 project will be informed. The CIL and S106 team will then regularly monitor the programme and progress to deliver the projects funded through the obligation.
All S106 obligations agreed, payments received from developers and expenditure by the council will be recorded appropriately and reported at least annually to the appropriate committees of the council.
Where a non-financial obligation is required through a S106 agreement, the developer should provide evidence of compliance with the obligation to the council’s CIL and Section 106 team. This evidence would be required in any case should an application be made to discharge the obligations at a later, unspecified point in time.
The delivery of non-financial contributions, or in-kind obligations, will be monitored by the appropriate service areas responsible for project delivery or the CIL and S106 team as appropriate. For example, where there is an Affordable Housing element to a legal agreement, the Affordable Housing Team will monitor this section of the agreement to ensure that it is complied with.
A S106 management fee will be charged for each S106 agreement. The fees for this will be reviewed on an annual basis and published separately on the council’s website.
The total fee chargeable and the current fee structure is outlined below:
S106 Fee cap
The fees for each S106 agreement will be capped at no more than 5% of the total value of the financial contributions agreed excluding any fees relating to agree deeds of variation.
A fixed charge per head of term will be charged to monitor and manage the discharge of each non-monetary obligation.
A fixed charge per head of term will be charged to monitor and manage the delivery of each monetary obligation by the council.
Deed of variation
A reasonable fee will be agreed with the developer on a case by case basis depending upon the complexity of the matter being agreed.
All management and monitoring fees will be due for payment to the council upon the commencement of the development. Additional fees related to specific technical activities relating to individual obligations for example but not exclusive to:
- travel plan review fees
- administration of the employment and training scheme
- agreement of a scheme employment strategy
will be agreed separately as part of the negotiations for that particular obligation.
Any revenues generated from the fees will be used for S106 administration, monitoring and management purposes only.
The council will review the fees annually and any changes will take effect from the 1 April for all new agreements, including those approved as “minded to grant” but remain unsigned on 31 March, entered into from that date. Management fees will not therefore be the subject of indexation as outlined below.
Deed of variation
Following the completion and signing of a S106 agreement, either the applicant or the council may find it necessary to modify the contents of an agreement. Additional time, and therefore cost, will be required by the council and in the negotiation, preparation and the drafting of such agreements. Where the deed of variation request is instigated by, or because of actions caused by the developer, reasonable fees will be charged for this, which will vary dependent on the complexity of the matter.
A standard clause within all S106 agreements will require the applicant to pay the council's legal fees for drafting and reviewing S106 agreements, and for reviewing unilateral undertakings whether or not the matter proceeds to completion.
The developer should notify the council upon commencement of development – or when other agreed triggers have been reached. Where the council is not notified of this, and obligations become overdue, the council will seek to enforce the obligation.
From the 5 October 2020, standard clauses will be included in the S106 agreement to insert an additional financial penalty where any obligations become overdue. This is proposed at £500 (minimum) or 5% of total value of the obligation outstanding. Whichever is the greater amount for the particular scheme where contributions become overdue.
CIL and S106 – Indexation
CIL is subject to annual indexation as set out in the CIL Regulations 2010 as amended.
There is now a bespoke index, based on the Building Cost Information Service’s (BCIS)
All-in Tender Prices Index, which is known as the ‘RICS CIL index’.
This index figure will be generated at the end of each year and will be applied to developments throughout the next calendar year to reflect changes in the amounts set out in the charging schedule . It will be made publicly available on the council's website and will not change throughout the year.
RICS CIL Index for the year in which BHCC CIL was adopted is as follows:
Published: 28 October 2019
All financial contributions, with the exception of management fees, will be index-linked in order to allow for the fluctuation of prices between the date the agreement is signed and the date the payment is made. This is calculated based on the indexation adjustment of the relevant index, from the date the S106 agreement is signed to the expected date of payment. The additional amount paid on top of the financial contribution adjusts the contribution in accordance with inflation.
The method of indexation will be specified within the legal agreement. This will usually either be the:
- Retail Price Index (RPI) published by the Department of Trade and Industry (DTI) or
- Building Cost Information Service Index (BCIS) published by the Royal Institution of Chartered Surveyors (RICS), depending on the nature on the contribution
The BCIS index will be used for all obligations that are required to fund capital investment projects, such as:
- new classrooms
- replacement boilers
No indexation of costs will be applied to any non-financial obligations.