David Brock Cambridge Futures 2 Funding and Delivery Section 106, PFI, and powers

Infrastructure items Affordable housing Transport link Trunk road improvements Non-trunk road improvements Education expansion Health Community facilities - open space, meeting halls, Gas & electricity infrastructure Water and waste water

How do we normally do it? Demand on this scale not normal Triggers for road upgrades, affordable housing, community facilities, schools Water/sewerage - s.104 WRA 1991 Electricity and gas - private negotiation

What is s.106 for? Four powers – restrict development – specified operations – specified use – payment of money Constraints (law) – must be for a planning purpose – must be related to proposed development – must have a more than de minimis connection Constraints (policy) – necessity – enforceability – precision

S issues Delay Complexity Inadequate powers – affordable housing – travel plans Challengeability Timing Adequacy of benefits

S Green paper proposals Tariff set in development plan (LDF) Spend at discretion of planning authority Disputes to valuers Rejects impact fees Does not address affordable housing, green travel or simplify powers

How does green paper help Delay Complexity Inadequate powers – affordable housing – travel plans Challengeability Timing Adequacy of benefits Partly No Cannot No Deal with in negotiations

PFI Private body agrees to BOO Public body pays usage fee Adjust usage fee to reflect performance PFI credits enable authorities to pay Private sector funds by equity and borrowing Often uses bond market

PFI Long lead time, procurement rules Contract periods of 25 years are typical Voluminous documentation Risk allocation is critical Planning risk must be eliminated Use of other revenue?

Stakeholder partnership/delivery vehicle Urban Regeneration Company Genesis in Urban Task Force report - recommended that: – powers be given to public sector to participate – transfer of land at below market value – assets to be available for PFI – suitable amendments to accounting, tax VAT regimes – range of legal structures

Models for implementaion vehicle New company – can we wait for new powers? – cannot exercise full range of authorities’ powers Political/consultative body, can include: – authorities – EEDA – Utilities – Housebuilders Joint committee – Authorities participate

Conclusion S.106 reform is welcome but too limited. Will it happen in time? PFI lead time is a significant problem - and what is the project? Delivery vehicle - need to define tasks and legal structures