CORRECTED: Disappointing news about S106 Open Space contributions


The original version of this article contained incorrect information about how the total amount of money that the Management Company can claim back is calculated, taking into consideration the 5% cap. The change is subtle but has quite far-ranging consequences.

The two paragraphs that have been altered are What does “capped at 5%” mean? and Areas that require comparatively little maintenance.

James Hodgson, 8th August 2024


At the end of last year, St. Modwen and Preim approached Vale of White Horse District Council (VoWH) with a view to increase the proportion of money that Preim could claim back for grounds maintenance activities on the areas of Kingsgrove that have been handed over.

Any money claimed would count as income in the year-end accounts, which usually results in a surplus. This surplus is, in turn, credited to the service charge account of each property owner.

Whilst these discussions were initially extremely promising, VoWH have recently confirmed that no increase will be allowed and the release of funds will remain capped at 5%.

Why wouldn’t VoWH agree to an increase?

Obviously, only VoWH can answer that definitively.

However, it should be noted whilst the fund from which money is requested is predominantly being promoted as contributions towards the cost of maintaining the open spaces in Kingsgrove, there is another important aspect.

Once the development has been completed anything left in the fund will be given to VoWH to provide affordable housing.

What is this fund of money?

The money claimed back would come from a fund of approximately £4M, commonly known as the S106 Open Space Contributions Fund.

What does “capped at 5%” mean?

Each parcel of land has a notional “pot of money” associated with it, based on its overall area. All of the “pots” together make up this fund of approximately £4M.

Once a parcel of land has been handed over successfully, the “pot of money” associated with it is added to the amount that the management company already has access to claim against for work carried out. This “available amount” would only ever be £4M if everything was handed over the management company.

However, written into the agreement is a cap on how much money can be claimed against this “available amount” each year. That cap is 5%.

Only VoWH can sanction any increase in this cap.

Areas that require comparatively little maintenance

As this 5% cap applies to the “available amount” as a whole, rather than to each individual “pot”, it does lead to a particular benefit of taking on the management of parcels of land that require comparatively lower amounts to maintain.

These parcels of land would increase the amount of money that the Management Company can claim from but wouldn’t actually require much expenditure.

This means that some of the costs of maintaining other parcels of land could be, in effect, claimed against the “pot of money” that is assigned to the lower maintenance land.

If the 5% cap didn’t exist, these could result in a net gain of money coming into the Management Company from the S106 Open Space Contributions Fund, but the 5% cap reduces it merely to a “less loss” model.

An example of that type of parcel of land is the Woodland Walk areas, as the areas of actual woodland need less money spent on them.

How long can this money be claimed?

The money can be claimed until the development has been completed, c. 2031.

Next steps

Each year, Preim will continue to request increases in the amount able to be claimed back. However, it will continue to be VoWH that makes the decision.

Further information

What is the S106 Agreement for the Kingsgrove Estate?

The S106 Agreement for the Kingsgrove Estate is a legal agreement that is drawn up between the Vale of White Horse District Council and St. Modwen, setting out the planning obligations that St. Modwen must undertake.

These agreements can include a wide range of requirements, from the provision of schools, community buildings and other assets for the development, as well as financial contributions for the local highways infrastructure.

Within this S106 Agreement for the Kingsgrove Estate there is this provision for a financial contribution (S106 Open Space Contributions Fund) to be made towards the ongoing maintenance of any open space area that has been handed over.

“Claiming back” rather than “accessing first”

Every year, the ManCo receives a contribution towards the expenditure incurred through the service charge. This is paid “in arrears” with the ManCo having to submit evidence of the work that has been completed, rather than being able to claim it first.

FAQ document

For those wanting more information, St. Modwen created this handy FAQ.