Cheshire East Council has been slated by a councillor for its “poor record keeping” and “abysmal failure” to collect outstanding S106 money from developers to benefit local communities impacted by housing schemes.
S106 agreements require a developer to meet certain obligations such as provide affordable housing or make financial contributions towards education, highways, and open spaces as a condition of planning permission.
An internal audit in 2023 revealed numerous failings in how the council managed S106 agreements.
And the audit and governance committee was told yesterday (Monday) a further review had revealed there were still inconsistencies, but had not identified these had any detrimental impact to the council.
But Congleton town councillor Robert Douglas, who has been looking into the matter for a couple of years, was scathing in his attack.
“I analysed potential outstanding items for Congleton, Somerford, Arclid, and Brereton that appeared in both the October 2024 and April 2025 financial ward analyses, totalling £4.9 million,” he said.
“Only 26% of that total had been received by April 2026.”
He said £805,000 which was not collected in time was “permanently lost” when developer Stewart Milne went into receivership in 2024.
And he said more than £1.4 million, representing 29% of contributions, should never have been included, because developments never commenced or had been superseded by later S106 agreements long before 2024.
Cllr Douglas told the committee: “In the April 2025 financial ward analysis, the total potential outstanding S106 figure for all of Cheshire East was £79.5 million and if 29% of that total was also invalid, potential outstanding monies would have been overstated by about £23 million.
“I have no hesitation in giving Cheshire East an adverse audit opinion for poor record keeping and abysmal failure to collect outstanding monies in a timely fashion.”
The committee was told by internal audit manager Michael Todd the latest review concluded there has been significant improvement since 2023.
“This has been facilitated by changes in policies and procedures, along with the introduction of improved controls,” he said.
“However… our review identified several inconsistencies in the application of these improved processes, and those inconsistencies may impact upon the effectiveness of the controls supporting the management of S106 agreements and income.”
He said record-keeping was found to be incomplete in several areas.
“Although the audit didn’t identify any detriment to the council as a result of these inconsistencies, if they continue, there is a risk that S106 obligations may not be fully captured, monitored, or enforced in a timely manner, and that could lead to delayed or missing income, unspent balances, repayments to developers, and challenges to decisions,” said Mr Todd.
Cllr Ken Edwards raised concerns that local councillors had been left out of the process.
“If S106 agreements are intended to mitigate the impact of development and improve outcomes for residents, then the elected representatives of those residents should be central to the process,” he said.
Audlem councillor Rachel Bailey gave an example of having to use her ward budget for highways because S106 funding was missed.
“There must be other instances such as that,” she said.
Finance chief Ashley Hughes said the council has had to return money to developers because it hadn’t been used within the specified time, and was adamant S106 monies would be used as intended within the timeframe.
The committee was told the changes recommended by internal audit following the latest review would be implemented by February next year and they would be updated on progress in three months’ time.
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