Charging Schedules- Michael Davies, RTPI West Midlands CPD

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14th November 2012

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Charging Schedules- Michael Davies, RTPI West Midlands CPD

  1. 1. RTPI West MidlandsCIL Charging Schedules – One Year onFrom AdoptionHousebuilders Perspective &Different Approaches Being Adopted By Local AuthoritiesMichael Davies BSc(Hons) Dip TP MRTPIPlanning Director, Savills14 November 2012savills.com
  2. 2. 1) Housebuilder perspective2) Different approaches being adopted by Local Authorities
  3. 3. Key Challenges – Housebuilder Perspective Legislation – not the clearest! Misunderstanding/ignorance of CIL Apathy Cost Commercial sensitivities Lack of skills / resource in some LAs Infrastructure delivery – and the lack of certainty Recurring issues – setting and operating a CIL
  4. 4. Recurring issues – Setting a CIL Early and meaningful engagement important Potential dangers of relying on one opinion – raw numbers are only half the story... Consortium approach can overcome apathy and costs challenges (e.g. HBF and other) Early guidance on interface between CIL and S.106 – don‟t leave to PDCS or later! Early guidance on interface between CIL and adopted/emerging policy Member engagement?! Early indication of exemptions/relief/instalments – manage expectations Consider practicalities of operation and review at outset
  5. 5. Recurring issues – Operating a CIL Allow for peak in applications/S.106 activity as implementation nears S.73 and CIL liability – big issue! Interface between CIL Reg 123 list and operation of S.106 Defining, maintaining and changing Reg 123 lists – flexibility vs. risks Be clear on what is and isn‟t liable before proceeding Early warning systems/monitoring – development plan as well as CIL
  6. 6. Key CIL ReferencesCIL Regs „Appropriate balance‟ between funding from CIL v economic viability (reg 14)NPPF Flexibility and delivery of development key in plan-making (cumulative impacts of standards and policies) (para 174) Meaningful proportion to neighbourhoods (para 175) Role for Section 106 (para 176) Knowledge of infrastructure needs/ costs to deliver development (para 177) ‘Competitive returns’ to a willing landowner and developer required to enable development to be deliverable (para 173) BUT..........
  7. 7. Crossrail CIL Examination ReportParagraph 31 “Profit levels sought by developers could be reduced. I fully appreciate the natural resistance that there would be to this but a modest reduction in profit levels may be something that the development industry will have to learn to accept”Keith Holland – CIL Examiner
  8. 8. Savills viability workshop October 2012Summary of Key Findings: Infrastructure Delivery Uncertainty Ability to negotiate reduced Trust in LPAs What is a “Meaningful proportion”? Evidence being ignored Representations to CLG
  9. 9. 2) Different approaches being adopted by Local Authorities
  10. 10. CIL Progress to Date • Committed to CIL78 • Producing their evidence base122 • Preliminary Draft Charging Schedule stage48 • Draft Charging Schedule stage11 • Examination stage13 • Charging Schedule Adopted or Implemented 7Source: Savills, 12 November 2012
  11. 11. Adopted CIL Rates Max Resi Max Retail Max Max Leisure Other (£/M²) CIL RateLocal Authority Rate (£/M²) Rate (£/M²) Commercial Rate (£/M²) Status Rate (£/M²)Newark and Sherwood £75 £125 £20 £0 AdoptedShropshire £80 £0 £0 £0 AdoptedHuntingdonshire £85 £100 £0 £85 Health £65 Adopted Hotels £60 Resi Institutions £45Portsmouth £105 £53 £0 £53 Hotels £53 AdoptedWycombe £150 £200 £0 £0 AdoptedBristol £70 £120 £0 £50 Student housing Adopted £100 (effective Hotels £70 from 1/1/13)Poole £150 £0 £0 £0 Adopted (effective from 2/1/13)
  12. 12. Emerging CIL Rates Max Resi Max Retail Max Max Leisure Other (£/M²) CIL RateLocal Authority Rate (£/M²) Rate (£/M²) Commercial Rate (£/M²) Status Rate (£/M²)Preston / Chorley / South £65 £160 £10 £0 Retail Warehouse £40 DraftRibble (Central Lancs)Bassetlaw £55 £125 £15 £0 DraftBroadland, Norwich and South £115 £135 £5 £0 DraftNorfolkEast Cambridgeshire £90 £120 £0 £0 DraftColchester £120 £240 £0 £0 DraftNew Forest £80 £200 £0 £0 DraftSouthampton £90 £43 £0 £0 DraftHavant £100 £80 £0 £0 DraftMid Devon £90 £0 £0 £0 DraftExeter £80 £240 £0 £0 Student housing £40 DraftPlymouth £30 £100 £0 £0 Student housing £60 Draft
  13. 13. Emerging CIL Rates Max Resi Max Retail Max Max Leisure Other (£/M²) CIL RateLocal Authority Rate (£/M²) Rate (£/M²) Commercial Rate (£/M²) Status Rate (£/M²)Torbay £100 £300 £0 £0 Prelim. DraftThurrock £38 £150 £25 £0 Prelim. DraftBirmingham City £115 £380 £55 £35 Max Hotels £45 Prelim. Student Housing £115 DraftBracknell £220 £95 £0 £0 Hotels £25 Prelim. Resi care home £150 DraftBolton £50 £150 £5 £5 Hotels £5 Prelim. Student housing £50 Draft
  14. 14. Viability Testing of CIL Charging Schedules Assumptions must be realistic  House prices (for sale and rent)  Rates of sale  Build costs & infrastructure  Cost of capital  Return to willing developer  Return to willing landowner Method must be sound  Land sampling  Policy assumptions  Net developable area  Cashflow on large sites  Current/future values
  15. 15. Different Local Authority Approaches – Central Lancs
  16. 16. Different Local Authority Approaches - VariousGreater Norwich / Norfolk  2007 Land ValuesBristol (June 2012)  Sales values £100 psf below market evidence Bracknell (June 2012)  No input from landowners/developers  Lack of market evidence  Infrastructure delivery and spending not related to the PlanHavant (Sept 2012)  Key infrastructure requirements not supported by County  No s106 assumed
  17. 17. Different Local Authority Approaches - Birmingham  £115 psm – Higher Value Areas  £55 psm all other areas  Student accommodation £115 psm – assumes Edgbaston  No on site s106
  18. 18. DCLG Review – Watch this space.......

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