Is there any legislation which ensures the following?
1. The Local Authority holding S.106 funds must retain the funds for the agreed purpose.
2. The S.106 funds are protected against any loss or policy change (by Local Authority or Government).
3. There is a mechanism to ensure that the capital is not seriously eroded by inflation (e.g. compounded interest).
Background
There is an active quarry within our parish and a planning application was agreed by the Planning Authority in 2002 which included S.106 commitments. One of these requirements was for the applicant to make payments into a “Long Term Management Fund” which is to be used in the administration of the quarry site when all quarrying operations have ceased and it becomes a public amenity area. Under the agreement, the company is required to pay a levy per ton of stone extracted in the first year which is then escalated by the amount of the RPI each year. So far, the Company has partly complied with this obligation by setting aside a sum, accumulated over 10 years, which is held within its internal accounting system. The S106 also stipulated that a joint account be opened in the joint names of the Planning Authority (County Council) and the Company to hold the money accumulating in this fund.
Current Position
The Planning Authority (County Council) are not willing/able to set up a joint account or even a separate account for this particular S.106. They are insisting on keeping the monies within the County Council bank account.
The Parish Council is concerned about the long term security (possibly >30 years) of this fund and the guarantee that it will not be “redirected” in the future. We have received several personal assurances from senior managers but the County Council have been unable to provide any kind of official documented evidence to back up these assurances.
