Improving the governance of developer contributions

Councils play a unique and critical role in planning, funding and delivering the infrastructure that is required to ensure that the vision and growth objectives set out in Local Plans is sustainable and meets the needs of communities.

The various forms of developer contributions that exist to mitigate the impact of this development are rarely, if ever, sufficient to fund all of the infrastructure that is required to support an area. Therefore, to ensure that they are used effectively they should be considered as part of a wider, corporate approach towards funding and delivering infrastructure.

This is an increasing challenge in post-COVID economies, where there is continued pressures on public finances, and demographic and social changes are all putting pressure in different ways on local infrastructure.

In 2020 we published the advice note ‘Start with the spend in mind’ which was aimed at helping senior leadership teams to understand the important role of developer contributions. Building on this we have published a more detailed handbook on improving the governance of developer contributions which includes a self-assessment toolkit for councils. This brings together practical learning from councils across England that have developed effective governance processes in the end to end system of planning for and delivering infrastructure.

This guidance presents best practice and provides local examples that are intended to support councils to ensure that developer contributions are used in an effective and integrated way.

Click on the links below to access the full report and the self-assessment tool.

The handbook provides an overview as to why good governance for developer contributions matters and explains why it is important to consider them in the wider context of a corporate approach towards infrastructure planning, funding and delivery.

It provides guidance on a number of key principles. This includes fundamental things to consider to enable improvements to the governance of developer contributions, along with a selection of best practice case studies and resources as to how this has been done elsewhere.

The handbook has been developed for senior officers working on the operational aspects of developer contributions and infrastructure planning. It is intended to be used as a quick and easy guide that highlights ways in which your current processes can be improved to ensure that developer contributions are used in an effective and integrated way.

Key lessons and top tips

The contents of the handbook on improving the governance of developer contributions is largely based on the insights, learning and experience of councils from across the country. From this we have identified the following key lessons that we believe will help councils to achieve the effective governance of developer contributions.

Ensure your infrastructure planning and delivery function is sufficiently skilled and resourced

 This should cover not just collection and monitoring of funding and works but should link infrastructure planning into the wider corporate capital delivery process. The skills required to cover all elements will be diverse, and may also be suitable to people from outside of traditional planning disciplines. It is also important to build resilience in your teams so that knowledge of this area of work is not the sole responsibility of one individual.

Secure and maintain support and buy-in from your senior leadership team

The absence of leadership is the biggest predictor of an absence of effective spend. Infrastructure planning and delivery is of relevance across many council services and therefore requires corporate-level support.

Establish senior level governance

Having some form of governance at a senior level is vital to ensure that the allocation of developer contributions are considered in an integrated way across your council, through keeping key stakeholders on board, unlocking barriers to progress, and enabling effective and timely spend.

Establish an officer-level steering group

This group can take ownership and accountability for day-to-day infrastructure planning and delivery matters. Ensuring representation from all services who depend on developer contributions can help play an active role in the process. If you are a two-tier authority and / or part of a Combined Authority (CA) you should consider officer representation from your County Council and CA on this group. 

Ensure your evidence for infrastructure planning is robust and up to date.

Your schedule of infrastructure needs set out in your Infrastructure Delivery Plan (IDP) should be regularly updated. It should be able to provide a credible pipeline of projects which can be assessed through your prioritisation governance framework to make well -informed spending decisions.

Agreeing a clear set of priorities

This will ensure that there is a clear, transparent and robust way to identify projects for spend. These should be based on an understanding of infrastructure requirements and objectives from your Local Plan, IDP or other corporate documents.

Use your Infrastructure Funding Statements (IFS) to promote delivery

The IFS should be seen as an opportunity to demonstrate the collaborative working and successful delivery of projects that support communities and enable good growth, as well as providing transparency over what developer contributions have been collected and are likely to be spent on in the future.

An integrated system for managing data

Being able to efficiently and accurately collect and monitor developer contributions is fundamental in supporting the wider infrastructure planning and delivery system. A system that allows this data to be manged in an integrated way across relevant parts of the council can make the whole system be more effective.

A sufficiently skilled and resourced delivery function

The whole system only operates effectively, and the outcomes for which developer contributions are collected can only be realised, if projects are delivered in a timely fashion.