Leicestershire council hands back unspent £900k to builders

Almost £900,000 has been handed back to house builders by Leicestershire County Council after the money - meant to offset the impact of new developments in the county - was not spent.

Section 106 contributions are paid to local authorities by developers when planning permission is agreed.

The funds are ring-fenced for certain projects and must be spent within a time period.

A council spokesman said it was "legally obliged" to return the money.

The unspent funds - revealed after a BBC Local Democracy Reporting Service freedom of information request - were earmarked for a range of projects, including a new bus route and to provide free six-month bus passes for residents of new developments.

A total of £20,000 for a cycle lane had to be returned after the Conservative-run authority did not complete the work in the identified time period.

Leicestershire County Council said it received more than £42.5m over the last five years through Section 106 agreements, with money being used on projects and services that are affected by new developments, such as schools and doctors surgeries.

The returned amount has caused concern that developers are offering cash for schemes, like free bus passes, knowing that they won't be taken up by residents and the cash will eventually be returned to them.

"It's always disappointing when Section 106 funds have to be handed back to developers when the money was justified during the planning process to mitigate the impact of the development and make it acceptable," said Simon Galton, leader of the council's Liberal Democrats.

A council spokesman said returning Section 106 money "doesn't happen often" and varies each year.

They added: "We work closely with developers and within the planning system to ensure it is kept to a minimum."