Members considered the report of the Executive Director which gave details of the Combe Valley Countryside Park Community Interest Company (CVCP CIC) whom had approached Rother District Council (RDC) to assist in formalising their financial arrangement with Groundworks South, by providing a guarantee to pass the first phase of the Bovis Homes Ltd contributions from RDC to the CVCP CIC.

The CVCP CIC was set up to administer the Countryside Park in 2015 and it had been anticipated that this would be funded largely by financial contributions to RDC payable under Section 106 of the Town and Country Planning Act 1990 by the developers of the allocated land North East of Bexhill.  However, the development had not progressed at the pace expected and this had left the CVCP CIC in financial difficulties.  The next payment by the developers would be made on the occupation of 25% off the dwellings of the first phase of the development.

The contributions were to be used ‘towards the improvement of the Combe Valley Countryside Park’ but did not necessarily have to be provided to the CVCP CIC.  The CVCP CIC had advised that their financial situation was such that, without certainty that the contribution would be paid, they could not continue to operate.  However, the CVCP CIC was established by East Sussex County Council (ESCC), Hastings Borough Council (HBC) and Rother District Council (RDC), businesses, landowners and community stakeholders as the vehicle to direct the money for the delivery of the Countryside Park infrastructure.

The CVCP CIC had a board of directors including representatives of the three Councils, local businesses, landowners and stakeholders, including the Friends of Combe Valley and oversaw the strategic direction of the Countryside Park. The Board appointed a company ‘Groundwork South’ to assist in the administration and co-ordination of projects within the Countryside Park.

Initially, the three Councils each contributed c£18,000 per annum to administer Section 106 money of £400,000, payable by Southern Water, as a requirement of their waste water treatment works planning permission.  Along with a Section 106 financial contribution from Biffa of £45,000, these funds had been spent on making the park accessible through the establishment of footpaths, bridges signage, etc. and had been spent in the timeframe required by the agreements.  The CVCP CIC was reliant on future funding obtained through Section 106 agreements or grant funding they could secure.

The Countryside Park was intrinsically linked to the North East Bexhill development allocation and was reliant on this funding to continue delivering projects.  Obligations to pay contributions towards the improvement of the Countryside Park were secured by Section 106 legal agreements attached to planning permissions relating to the development of land at North East Bexhill by both BDW Trading Ltd (Barratt Homes) and Bovis Homes Ltd.  Barratt Homes paid a contribution of £101,088 to RDC which was transferred to the CVCP CIC through an Indemnity Agreement in August 2017.

Bovis Homes commenced construction of the first phase of their development in February 2019.  A contribution of £187,200, exclusive of interest and indexation, towards the improvement of the Countryside Park was payable to RDC on occupation of 25% of the first phase (occupation of 50 out of 200 dwellings within this phase).  Bovis Homes had indicated that 25% occupation would be reached in 12-18 months from the current time; however, this was subject to the sales rate they achieved.  There was therefore no certainty as to when 25% occupation would be reached.

Currently the CVCP CIC had no money, but Groundwork South had continued to assist with administering them despite being owed £61,145.10 (including VAT) in fees.  Groundwork South had continued their support in ‘good faith’, on the basis that the CVCP CIC would receive the Section 106 money and settle the accruing debt.

RDC had been approached by the CVCP CIC, who had requested assistance to pay the monies currently owed to Groundwork South, which in turn RDC would recover from the Section 106 payable by the developer (Bovis Homes Ltd) to RDC on the occupation of 25% of the dwelling of the first phase.

Given the strategic importance of the Countryside Park and the CVCP CIC’s work to date in progressing the project, it was recommended that RDC advance £61,145.10 to CVCP CIC in order to settle their debt with Groundwork South and confirm that RDC would transfer the balance of the ‘Countryside Park Contribution’ of £126,055, plus interest and indexation relating to the first phase of the Bovis development to the CVCP CIC on receipt, subject to the engrossment of an Indemnity Agreement.  It was also recommended that no further payments of Section 106 monies were paid until a plan had been submitted and approved by the Council.  The plan would need to address how the CVCP CIC would in future not get into debt.

RESOLVED: That:

1)         the Combe Valley Countryside Park Community Interest Company be paid the sum of £61,145.10 to meet the amount outstanding to Groundwork South, which would be recovered from the Section 106 legal agreement financial contribution payable by Bovis Homes Ltd;

2)         the Combe Valley Countryside Park Community Interest Company be assured that Rother District Council will pay on receipt the balance of the Section 106 legal agreement financial contribution of £126,055 and indexation and inflation receivable from the first phase of the Bovis Homes Ltd development towards the improvement of the Combe Valley Countryside Park, subject to the engrossment of an Indemnity Agreement; and

3)         no further monies will be paid until a plan has been submitted and approved by the Council.