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Developer Payments Community Infrastructure Levy & Viability
- 1. Councillor briefing Developer contributions: Community Infrastructure Levy, S106 obligations, viability Date: July 2013 www.pas.gov.uk
- 2. What is PAS ? • PAS is a DCLG grant-funded programme but part of the Local Government Association • Governed by a ‘sector led’ board • 10 staff – commissioners, generalists, support “PAS exists to provide support to local planning authorities to provide efficient and effective planning services, to drive improvement in those services and to respond to and deliver changes in the planning system”
- 3. Programme Presentation: – Viability as a consideration – Types of developer contributions – Community Infrastructure Levy – Your choices • Questions & discussion
- 5. When you need to consider viability: • Local Plans /core strategy • Other policies affecting the cost of development proposals • Community Infrastructure Levy • Planning applications • S106 obligations
- 6. It is all about delivery • Growth • Viability – including developer/landowner motivation • Mitigation - Infrastructure • Community expectations • Policy requirements – e.g. affordable housing
- 7. Basic elements of viability assessments
- 8. Policy costs Including: • materials • sustainability codes • BREEAM • Affordable housing • On-site 106 contributions
- 9. Developers costs • Contaminated land • Poor ground conditions • Green field costs – connecting to infrastructure and services. • Materials • Fees • Marketing • Profit (risk) • Finance
- 10. Money money money There is only so much - how much? • What will bring development forward? • You need to have information on viability • You have choices
- 11. Developer and other contributions • S106 obligations • Community Infrastructure Levy (CIL) • Highway contributions ( s38 and s278 Highways Act) • New Homes Bonus • Retention of business rates
- 12. S106 Obligations • S106 is not replaced by CIL • Old reality – pre 2008 • New reality-post 2008: Times have changed – viability Times have changed - legislation
- 13. S106 - tests • If the development is capable of being charged CIL, the S106 obligation must meet these legal tests: • NECESSARY to make the development acceptable in planning terms • DIRECTLY RELATED to the development • FAIRLY AND REASONABLY related in kind and scale to the development • These are also now the policy tests in the NPPF
- 14. S106 obligations • Site specific mitigation measures • For pooled contributions up to April 2014/CIL adoption, then for up to 5 developments where infrastructure not funded by CIL (There is currently a consultation about moving the deadline to April 2015) • NPPF- planning obligations should take into account changes in market conditions over time and, where appropriate, be flexible to prevent stalling( para. 205)
- 15. Renegotiation of s 106 • Amended Regulation (Feb 2013) to set out a procedure for amending any planning obligations entered into between 28 March 2008 and before 6 April 2010. • Changes in the Growth and Infrastructure Act that require a council to renegotiate previously agreed affordable housing levels in a S106, or enable PINs to assess the viability arguments and change the requirement
- 16. Questions?
- 17. What is a CIL? • A mechanism for developer contributions • To contribute towards infrastructure needed to support the development of the area • A charge per square metre of floorspace • Not mandatory
- 18. What is CIL for? • To help pay for infrastructure needed to support new development • But not to remedy existing deficiencies unless the new scheme will make it worse • Councils must spend the income on infrastructure – but you can decide what (and that can change over time)
- 19. Charging CIL – some basics • £ per square metre on net additional (internal) floorspace • Rates can vary by geographic area or use ( or both) • Due when the development starts • It is index linked • The landowner is responsible for paying it • The local planning authority is the charging authority (& sets the CIL)
- 20. When does it apply? • To all development that involves ‘buildings that people normally go into’ • Development over 100sqm gross internal floorspace • A single dwelling ( even under 100sqm) (but not subdivisions of dwellings) • Includes permitted development (it doesn’t have to follow a planning permission) • Once set, you can’t pick and choose which developments to charge
- 21. Why set a CIL? • Money for infrastructure through charging nearly all new development -a little from almost everyone (so fairer) • There is a lack of government or other money • It is set out in a schedule based on evidence (so more transparent) • Developers have certainty • Changes to s106 – legal tests and pooling
- 22. CIL- positive economic effect • “By providing additional infrastructure to support development of an area, the levy is expected to have a positive economic effect on development across an area” para. 8 - CIL Guidance – April. 2013
- 23. Setting a CIL • Identify the aggregate infrastructure funding gap- Is a CIL necessary? • What rate is viable to charge? • Check out the consequence of the rate on key uses • Make sure that the rate is backed by evidence • Consultation required • Independent examination
- 24. What you need to set a CIL? • Up to date development plan • Evidence on infrastructure funding gap – aggregate gap • Evidence on viability • All evidence is ‘appropriate available evidence’
- 25. Strike the Appropriate balance Between – the desirability of funding the infrastructure gap to support the development of the area from CIL and – the potential effects (taken as a whole) of the imposition of CIL upon the economic viability of development across the area.
- 26. Viability - rate setting: • Strategic approach • Look at the effect on the whole area • The rate may put some development at risk • No requirement to use any particular models • Can set differential rates – but rate changes can only be differentiated on viability grounds. Note: If there is a CIL, a rate must be set for every use.
- 27. Differential rates • Different between uses (not just use classes) • Different across the geographic area • Both or neither • All differential rates must be based on viability evidence ( not policy objectives)
- 28. Different rates for different authorities • £70 per sq Metre – flat rate – based on residential growth. • residential charges rural - £80m2 and urban -£40m2 . All office/industrial uses £0m2 charge. • Incl. 4 residential rates, 3 employment rates,– high level of differentiation by area and use.
- 29. Members role • Make sure you know what is necessary to aid delivery of growth in your area. Make sure your priorities are clear. • Get involved in deciding how ‘risky’ your rates are going to be - strike the appropriate balance for your area.
- 30. Exemptions etc • Social housing relief • Buildings used for charitable purposes-exempt • Discretionary relief for charitable investments • Instalments policy • Exceptional circumstances (where scheme can’t afford to pay it) but conditions apply
- 31. Exceptional Circumstances • It is very difficult to get • It is not a negotiated amount • Should not be considered when setting rates
- 32. How is the levy paid? • Usually cash contribution • Falls due on commencement of the development but you can agree to payment by instalments
- 33. What has PAS learnt from the early CIL authorities? Those that succeed have: • Councillor and management team support • Effective project management • Project team • Project plan
- 34. What has PAS learnt from the early CiL authorities? • There is no one way to DO a CIL • Remember the basics • Infrastructure – Local Authorities should use what they have • Viability and balancing risk are key to the rate • Keep it simple
- 35. Who has a CIL? • There are (as of April 2013) 19 July charging authorities with a schedule in place (incl. Redbridge, Wandsworth, Newark & Sherwood, Shropshire, Huntingdonshire, Wycombe, Portsmouth, Poole, Bristol, GLA) • Many more on their way (at least 90 are actively working on their CIL)
- 36. Questions?
- 37. Spending CIL – For Charging Authorities • It must be on infrastructure needed to support the development of the area • It can be spent on infrastructure outside the CA’s area, and spent by another body • Doesn’t have to spent on the infrastructure referred to in your charge setting evidence but.. the links should be clear • It is advisable to publish a list of the infrastructure you intend to use CIL for (Reg 123 list)
- 38. Purpose of the Reg 123 list • “double dipping” is a concern for Developers • Reg123 is the requirement for a published list of infrastructure projects or types of infrastructure that the Charging Authority intends will be, or may be, wholly or partly funded by CIL, those infrastructure projects or types of infrastructure. • …put another way you cannot collect s106 to spend on items within your Reg 123 list • Golden thread
- 39. GOLDEN THREAD From plan to delivery Devising CIL spending list: A draft Reg 123 is now part of the examination
- 40. 123 LIST- Post Examination : • Reg 123 list - should be based on the draft list examined with the charging schedule • Need to explain the reason for any change • Appropriate local consultation • Where a change to the regulation 123 list would have a significant impact on viability evidence requires a review of the charging schedule
- 41. Implications on Council Resources The more comprehensive the Reg 123 List Education Education Transport Education Transport Community Facilities Green space Health The greater demand on and for Council resources to deliver
- 42. Neighbourhoods Localism Act: •localism principles – the money should benefit those who take the development. (incentivisation)
- 43. CIL and Neighbourhood Planning
- 44. Member involvement in delivery • Get involved early in Infrastructure prioritisation • Decide how best you can use all income from development to aid growth • Understand the implications of s106 vs CIL • Work with neighbourhoods and local communities
- 45. Is CIL right for you?
- 46. Decisions • What will you seek from CIL ? • What will you seek from s106 ? • How will you spend your new homes bonus and business rate retention on? • Who do you need to be working with? County Health authority Neighbouring authority Parish
- 47. Tough decisions • CIL might give you enough money for that long awaited – politically popular- skating rink BUT Is that the best way to make your new development sustainable and acceptable to the community? OR should you give the CIL money to your neighbouring authority for a new transport link in their area that improves access for the new growth in your area?
- 48. Governance • Review your infrastructure priorities • Set up your council procedures and delegation agreements for CIL • Create the necessary CIL management structure. • How will you work with other organisations. • Enter into memoranda of co- operation with other bodies e.g. neighbouring authority
- 49. What should be happening • Working on your Local plan/ Core strategy • Infrastructure planning • Viability • Are you and your officers talking to your: – county and parish – developers – communities – neighbours – infrastructure providers
- 50. What will success look like?
- 51. PAS web site Community Infrastructure Levy- web pages: http://www.pas.gov.uk/pas/core/page.do?pageId=122677 Case studies: http://www.pas.gov.uk/pas/aio/3425452
- 52. Contact us email pas@local.gov.uk web www.pas.gov.uk phone 020 7664 3000
Editor's Notes
- This is a large and thorough presentation. Feel free to just use the bits which are most relevant to you
- When developing your local plan/core strategy :- If you want you plan to be deliverable you want to make sure that implementing the policies in it do not make the site unviable. Policies on design, affordable housing, open space, sustainability etc all have a cost to the developer- NPPF also highlights the issue of viability. Para 173-177 [You need to remember: That if the existing use value of the site is higher or the same as the desired use ( when all costs to implement the scheme have been taken off) the site will not come forward.- NEXT SLIDE] Corporately you may have other policies that affect the cost of development – these will also affect viability. When Setting a CIL you need to be sure that you do not risk the overall growth of your area by pushing the viability ceiling. Planning applications – to achieve the design, the affordable housing and the developer contributions you may have to review a viability assessment submitted by the developer. NPPF: Ensuring viability and deliverability Para 173 – last slide 177. It is equally important to ensure that there is a reasonable prospect that planned infrastructure is deliverable in a timely fashion. To facilitate this, it is important that local planning authorities understand district-wide development costs at the time Local Plans are drawn up. For this reason, infrastructure and development policies should be planned at the same time, in the Local Plan. Any affordable housing or local standards requirements that may be applied to development should be assessed at the plan-making stage, where possible, and kept under review.
- ‘It is all about delivery’ - a favourite phrase It is about balancing the different elements: Often delivery is about viability – will that development come forward – - Is there a profit to be made for the developer : Is the new use/ development worth more than the existing use /development – be careful of the traps- for example old and tatty industrial might be worth more that the cost of the proposed use. It must be worth redeveloping The developer will consider: How much will the development cost, how much can I sell it for and Is it worth the risk. If it isn’t going to make any money for the developer it is highly unlikely that they will bring it forward. Developers profit is the reason they do it – the higher the risk the higher level of profit they, and their banks, will expect them to build into their calculations. At present, in quite a risky environment, it is over 20% for a lot of developments and even higher. Banks are not lending unless there is a significantly high profit margin demonstrated. This is all based on risk – there is no one percentage that fits all – it will depend on a lot of risk factors.
- Profit is a cost as it accounts for the level of risk and banks will not lend without what they consider to be the amount of profit to cover the risk.
- These are all costs to the developer that will eat into the viability – but are there other costs other than those in the adopted plan that the developer should know about before they buy the site. It might seem that building to higher carbon reduction standards will result in a higher value unit for the development but except in a few anecdotal cases this has not been proved.
- Remedial works to clean or remove or cap contaminated land Sites riddled with former earth works, unstable land – need for piling etc Installation of on site and off site infrastructure – brown field sites are already close to connections to infrastructure Green field sites may require bigger land take – less developable area due to parks, play areas, schools, community facilities, location of utilities etc. Large investment in new utilities may be required. e.g. Dover large site- 5750 units and supporting development. At the core strategy stage it was good in terms of all constraints and apparently deliverability with affordable housing. However, it is at the end of the line for utilities- Issue with the need for a new trunk water main. Electricity supply cannot accommodate all the development and a change to a roundabout is required so the cost of infrastructure is seriously bringing into question the deliverability including affordable housing.
- Ultimate question do you want this site developed now? – If so do you need to compromise and by how much? What are your priorities? When the developer comes forward to you and says this site is not viable if I have to provide affordable housing and s106 do you say OK provide half the affordable housing and half the s106 – you might, or do you say come back when the viability has changed. You need to assess whether the development is contrary to your policies and the other material circumstances ( one of which will be current viability) What basic infrastructure is required e.g. the road junction into the site and water and sewerage. What mitigation is required? What is the basic minimum for ‘place making’ – e.g. public open space. It is about the decisions you need to make – do you need this housing site to come forward now – are there other sites that can come forward now. You need to have an eye on your housing land supply. CIL will also change your decision, at the moment you can negotiate s106 but CIL is a set charge only able to be varied on very specific grounds– you will still be able to negotiate s106. You need to decide what you collect from CIL and what from s106.
- S106 planning obligations or planning agreement are the most common type of developer contribution that people think of. Historically most councils have negotiated s106 on large housing or mixed use schemes. It does not usually apply to single housing plots or most commercial development. CIL is the levy that authorities can choose to develop and adopt where all additional building floor space ( with some notable exceptions – social housing) will be subject to the charge. CIL should give developers certainty it can be built into the land values ( eventually). There cannot be double counting between s106 and CIL – you cannot collect for the same thing. Section 278 Agreements – Highways Act 1980 - Developer Funded Improvements Works to the Existing Highway Where highway objections to proposals can be overcome by improvements to the existing highway, developers can enter an agreement that requires them to pay for or undertake such works. These works may include minor highway realignments, roundabouts, traffic signals, right-turning lanes, passing bays, etc. Prior to the commencement of construction, developers are requested submit full construction drawings for approval and enter into a Section 278 Agreement with a Bond to cover the full road construction. Developers are advised that without such an Agreement in place they may not commence any works within the public highway Section 38 Agreements – Highways Act 1980 - New Housing Estate Roads Usually most authorities require that prior to the commencement of construction, developers are requested to submit full construction drawings for approval and enter into a Section 38 Agreement with a Bond to cover the full road construction costs. Without such an Agreement in place developers will be required to deposit monies with the Council under the Advance Payments Code.If developers do go ahead without having got agreement any works and any construction undertaken may prejudice the future adoption of the estate roads concerned New Homes Bonus The New Homes Bonus commenced in April 2011, and will match fund the additional council tax raised for new homes and empty properties brought back into use, with an additional amount for affordable homes, for the following six years. It is based on the council tax of additional homes and those brought back into use, with a premium amount for affordable homes, and paid for the following six years. Retention of business rates – policy statement Nov 2012, consultation on the draft regulation October 2012.
- Reality was that pre 2008 developers did not argue much about developer contributions/106 requests because the values and viability of their sites were generally rising. A big impact on viability was the time a development spent in planning – it was cheaper for them just to agree to the contributions/ s106 than spend time arguing. Developers as we all know just stopped building in some areas because the viability just wasn’t there. Lowest level of housebuilding now for around 100 years SO developers are less likely to accept unreasonable developer contribution requests as they are closer to the viability threshold in uncertain times. They will not bring the site forward – you will not be able to realise your local plan/core strategy. In addition, the legislation has changed for s106’s, there are not only policy tests in the NPPF and the legal tests introduced by the CIL regs. There are more and more appeal decisions where s106’s are not considered reasonable. So where does that leave you – you need to be able to evidence why a developer contribution through s106meet the tests. – see next slide
- For development capable of being charged CIL for infrastructure capable of being in CIL – Not for other s106 obligations e.g. affordable housing, habitats except infrastructure for habitats ( visitor centre) The Community Infrastructure Levy regulations 2010 (as amended): Limitation on use of planning obligations 122.—(1) This regulation applies where a relevant determination is made which results in planning permission being granted for development. (2) A planning obligation may only constitute a reason for granting planning permission for the development if the obligation is— (A)NECESSARY TO MAKE THE DEVELOPMENT ACCEPTABLE IN PLANNING TERMS; (B)DIRECTLY RELATED TO THE DEVELOPMENT; AND (C)FAIRLY AND REASONABLY RELATED IN SCALE AND KIND TO THE DEVELOPMENT. (1) NPPF: 204. Planning obligations should only be sought where they meet all of the following tests: ●necessary to make the development acceptable in planning terms; ● directly related to the development; and ● fairly and reasonably related in scale and kind to the development. 205. Where obligations are being sought or revised, local planning authorities should take account of changes in market conditions over time and, wherever appropriate, be sufficiently flexible to prevent planned development being stalled.
- Government consultation August – October 2012 preceded: 1. The Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 set out the procedure for making an application to amend planning obligations, including standard forms. The principles for modifying an obligation are that it “no longer serve a useful purpose” or “continues to serve a useful purpose equally well” The new regulations add a provision to the 1992 Regulations which affects obligations entered into after 28 March 2008 and before 6 April 2010. PINs would deal with appeals. 2. Changes in the Growth and Infra Bill re: modifying s106 obligations related to affordable housing
- The aim is to allow local authorities to raise funds from developers to fund a wide range of infrastructure that is needed as a result of new development. Almost all development has some impact on the need for infrastructure, services and amenities, so it should contribute to the cost. Planning Act says that authorities can only spend CIL on providing infrastructure to support the development of their areas: “Infrastructure” legally includes (so the list in the Act is not exhaustive): flood defence, open space, recreation and sport, roads and transport facilities, education and health facilities CIL Regulations 2010 removed affordable housing, which will continue to be funded by S106s Localism Act clarifies that CIL can be spent on the ongoing costs of providing infrastructure (Maintenance, Operational and Promotional); Update: Act - 2008 CIL Regulations – April 2010 Guidance - Regulations update- April 2011 Regulations update- November 2012 Regulations update -March 2013 Statutory guidance update – December 2012 Localism Act 2011
- NOTE: Neighbourhood proportion- 15% or 25% where there is a neighbourhood plan – there are broader spending tests for neighbourhood proportion.
- CIL is charged on net additional floorspace – so any floorspace that has recently been in use ( 6 months use in the last 12 months prior to pp being granted) Will be charged on most buildings that people use – not just housing. Unlike floorspace calculations that are normally carried out in planning for CIL internal measurements are required The definition of commencement of development is the same as already exists in planning legislation. Development is to be treated as commencing on the earliest date on which any material operation begins to be carried out on the relevant land. The Index is the : The All- in tender price index of construction cost published by Building cost information service of the RICS The collecting authority issue a liability notice setting out the requirements to pay the levy and encourages someone to assume liability – ultimately the owner of the land is liable – the liability transfers when the land is sold – the liability runs with the land. Existing permissions will never be caught. Nor will any permission granted before a charging schedule is brought into effect locally
- CIL will apply to all development that has been granted planning permission either through a planning application, permitted development, Local development order, neighbourhood development order, parliament etc. It does not include development where planning permission is granted for a limited period. All buildings that people normally go into over 100 sq m or single dwelling even if less than 100 sq m. All measurement are internal. A final net charge of £50 or less will not be collected. CIL will apply to all developments in an area not just ones selected by the authority. However, it may be that the authority give some developments a zero rate which will have been justified by viability evidence.
- Tariffs inoperable from 6 April 2014 (but not re. Crossrail) 9although this date may be moved to April 2015 – consultation April 2013) to allow transitional arrangements for those with tariff schemes; Existing permissions will never be caught. Nor will any permission granted before a charging schedule is brought into effect locally; Under powers in the Planning Act, the CIL Regulations change the use of planning obligations (Section 106) by: Making statutory the Circular 5/05 policy tests governing the use of planning obligations for permissions involving buildings, from April 2010 (Reg 122) Preventing tariff schemes for ‘CIL infrastructure’ based on s106, from April 2014 (Reg 123(3)) Preventing double charging via s106 for infrastructure to be funded from CIL, from the point at which CIL is introduced (Reg 123(2)) GPDO development liable from 6 April 2013;
- Nearly all development - Net additional floor space of buildings that people use – exceptions social housing, charities and charity exceptions that you can decide whether to give ( Investment state aid) Does not include changes of Use e.g. barn conversions. Buildings that exist and are being demolished are taken off the overall level of floor space.- At present this is limited to buildings that have been used for 6 months in the last 12 months but this is the subject of a consultation (April 2013) You do not need to be specific about your infrastructure when you are setting your charging schedule although changes to the guidance seek to ensure that there is a clear thread running through from your plan, to your infrastructure evidence, to your draft CIL spending list ( REG 123) to your final list. You should have infrastructure planning from your core strategy/Local plan – this will be the basis of you calculating your Infrastructure gap. The guidance says that you should use your development plan to identify infrastructure and ultimately CIL spending. The level of gap will be way above the viable level of setting the CIL. You will need to look at the level of viability for all your uses – the temptation is to concentrate on housing – the level you then try to set may have some unintended consequences for other uses. You cannot just set a nil rate for uses because you don’t want to bother about them or you want to encourage them as this would look like state aid. You need to be able to justify your rate – it should be evidence based. The uses that you should concentrate on are the ones that are important for you to deliver as part of your plan CIL gives developers certainty- they can build it in to their purchase price of land or sites ( however, a note of caution, there are sites with higher existing use values that might not come forward)
- This plan should identify the overall scale of development anticipated for the plan period; or you can work on a local plan and CIL in tandem. The CIL examination is not expected to re-open the soundness of an adopted DPD or any infrastructure planning that underpins it (para 18);
- DUTY to strike a balance The desirability of funding from CIL (in whole or in part) the actual and expected total cost of infrastructure to support the development of the area… …taking into account other actual and expected sources of funding for local infrastructure; and The potential effects (taken as a whole) of the imposition of CIL upon the economic viability of development across its area. London boroughs, in having regard to economic viability, must consider any approved Mayoral CIL.
- CAs decide how to present their appropriate available evidence on the potential effect of CIL on economic viability and show how that has informed the charge rate(s); This is unlikely to be comprehensive or exhaustive – a reasonable and pragmatic approach, not ‘rocket science’; Should use area-based approach involving a broad test of viability across their area - some limited sampling of sites; (para 23 CIL Guidance Dec 2012) Strategic approach and should not be focussed on specific development sites unless that is a strategic site and you are sure you will not fall foul of state aid rules (para 34-41 CIL Guidance April 2013) No requirement to use any of the valuation and viability models available, but it may assist in defending CIL rates; Regulation 14 recognises that the CIL rate set may put some development at risk – this is a judgement for the CA: A CA must look at the potential effects of charges “taken as a whole” on the viability of development “across its area”. Evidence may show that proposed rates may make a particular development on any given site unviable But, unless that development threatens the delivery of the plan as a whole ( Para. 29 CIL Guidance the duty ( appropriate balance) in Reg 14 may still be met Can recoup up to 5% admin
- CAs may set differential rates of CIL (Reg 13): within different geographical zones of their authority; or by intended use of development… …but in either case, only if the rates are based on the economic viability evidence Rates by intended use are not constrained to Use Classes – e.g. by Greenfield Brownfield, if supported by evidence. Geographical zones boundaries should reflect the evidence and not only administrative convenience. It is possible to set differential rates both by zone and type of development April 2013 CIL reform consultation – has sought views on bringing in differential rates for the scale of development Caution is needed in setting differential rates: Selective advantage to a particular sector or group needs to be avoided to minimise risk of notifiable State aid (under EU competition law) – this is the responsibility of the CA; It is harder to ensure State aid compliance where rate patterns are complex - be consistent in the way evidence on viability informs the treatment of a category or zone CAs should not set ‘zero rates’ or ‘exempt’ any category of development or area unless this is genuinely supported by evidence. Charge rates should not impact disproportionately on any particular sector or small group of developers (para.39)
- Differentiation allows for varying circumstances (by sector and geography) thereby protecting the bulk of development. It is also based on the decisions that the individual council takes in terms of how complicated it want to have a rate structure and how close to the ceiling of each uses/locations viability.
- When deciding on rates and differential rates it is important to decide what are the delivery priorities – and to have that in mind when making decisions. You must decide your rates based on viability and not policy e..g. you cannot actively encourage one sector by zero rating it as that is state aid. However, you can make decisions about how close to the viability ceiling and how much differentiation you make. How much risky for how much extra CIL income?
- The detail of these reliefs is fairly complex and the detail of how they may affect individual circumstances should be considered. Introducing and withdrawing polices – notice periods etc: For discretionary charitable relief (including both charitable investment relief and Reg 45 relief) if the charging authority wants to - introduce the policy for the 1st time or revise the policy it simply needs to state from which date the revised policy applies - if it wishes to withdraw the policy it must give a statement to the effect and stating the last day on which the collecting authority will accept claims for relief. This date must be at least 14 days after the date the statement is issued. (This provision is contained within Regulation 46 of the CIL Regulations 2010.) For instalments policy. If the authority wishes to either introduce a new policy or simply just withdraw its policy, it needs to give at least 28 days notice. (This is contained within Regulation 9 (11) of the 2011 Amendment Regulations.) For exceptional circs Authority has to give notice S106 must exist and the cost of the s106 must be larger than CIL Paying the full charge would have an unacceptable impact on the viability of the development. Relief must not constitute notifiable state aid Landowner appoints independent assessor agreed by LPA CA can decide whether or not to give exemption to make it viable.
- Authority has to give notice S106 must exist and the cost of the s106 must be larger than CIL Paying the full charge would have an unacceptable impact on the viability of the development. Relief must not constitute notifiable state aid – so would not work for most big developers. Landowner appoints independent assessor agreed by LPA CA can decide whether or not to give exemption to make it viable. The Charging Authority can decide to turn exceptional circumstances on and off at any time For exceptional circs it does not issue a policy, but simply issues a statement that it is offering exceptional circumstances ( E.C.) relief and the date on which it is offering relief. If it wishes to withdraw its offer of E. C. relief it must give a statement to the effect and stating the last day on which the collecting authority will accept claims for relief. This date must be at least 14 days after the date the statement is issued. (This provision is contained within Regulation 56 of the CIL Regulations 2010.)
- The authority can receive land instead of money but only if this is done to provide or facilitate infrastructure to support development in the authority's area The consultation issued in April 2013 – asks whether payment in kind should be expanded to the provision of the infrastructure.
- 19 charging schedules in place (incl.London Mayoral CIL, Redbridge, Wandsworth, Newark and Sherwood, Shropshire, Huntingdonshire, East Cambs, Wycombe, Portsmouth, Poole, plymouth croydon Norwich, Broadlands and Bristol). And many more to come – latest info suggests around 90 councils have progressed work on CIL.
- It is advisable to publish a list of the infrastructure you intend to use CIL for (Reg 123 list) – If you don’t you cannot collect s 106 for anything. We will look at the requirements associated with a Reg 123 list next.
- Double dipping – is where the developer is paying for infrastructure through s 106 and also through CIL. The regulation 123 list has always stopped this from happening but developers were still concerned and felt that it was too loose and that double dipping would happen – to address these concerns there has been a tightening of the guidance around regulation 123 list an a clear thread clarifies what CIL is to be spent on.
- The new CIL guidance has modified importance and use of the Regulation 123. Firstly there is more information and restrictions on producing the 123 list. One of the most important principles introduced by the new Guidance is what we refer to a the Golden Thread between the Local Plan and the Reg 123 list and CIL collection and investment process.
- Consideration should be given to the implications of receiving CIL instead of s106 on the councils resources to deliver.
- Localism Act 2011 Nick Boles announcement January 2013
- With the changes to the regs and guidance it is now important to work out what you will spend CIL on and what you will seek s106 from. This has implications for the rates that you develop. CIL is only one potential source of infrastructure funding and will not pay for all the infrastructure necessary to support your plan. Thin early about how it may work with other funding streams to aid growth – which with then contribute to future earning. The s 106 vs CIL decision is based on local circumstance – ask officers to set out the pros and cons for your area and type of development. Pulling together or match funding with parishes may deliver better infrastructure that supports the local community – ward councillors can play a vital role in working with communities to determine funding of local infrastructure.
- Is CIL right for you? – It may depend on the type of development you are expecting in your area. Are you expecting any development at the moment- Do you have any development viability in your area? – if so what for? Will it be worth doing? Do you need to be ready when things pick up? How much s106 will you lose from non pooling of s 106. Will s 106 still suit you better?
- You need to make the decision about what you seek from CIL when you are planning your CIL – you should consult on a draft CIL Infrastructure list ( Reg 123 list). Your officers should be discussing infrastructure delivery with developers to determine the most effective way of delivery- some infrastrcuture may be considered by the developer ( and the council) to be best provided by them –e.g. mains services, open space or mitigation through s 106 obligations or through CIL (more strategic). The cost of all methods of infrastrcuture delivery need to be considered as part of the viability odf development and the CIl setting process. You will only be able to pool up to 5 contributions ( after April 2014 or 2015 if the current consultation reform goes through)– even now the wording of s 106 agreements is important as year zero is April 2010.
- In the calm pre money period – before you are faced with £2 million in the councils account. What is really important to deliver the development in your area? Set up your priorities and get agreements to them. When setting up procedures remember that circumstances change – make sure the arrangements can be flexible enough to take on board changes. E.g. windfall site of 2000 units and business development comes in on a former MOD site. Ideally you would like to collect the CIL but you know that this site will need a lot of on site facilities – schools, POS, community facilities and you think these should be provided through s106. changing the reg 123 – CIL spending list – has become more difficult but it is still flexible. In the management of Cil this is a corporate matter – all those involved in collection and spending should understand it and be clear of their role. Do you have regular meeting with neighbouring authorities or with utilities – do you have a Local Strategic partnership? What do you need to set up to discuss delivery of the infrastructure you need for development of your area – even if you are relying on someone else to provide it. What mechanisms or agreements do you need to put in place? This is all new to most authorities – the idea of giving money to another body rather that using for services/facilites that are provided by you.
- You need a plan Infrastructure planning – you should have this as part of the local plan/ core strategy process. CIL is not asking you to redo things. Viability – what evidence does the authority have already – can this be reused The guidance requires you to talk to County councils and developers – try to understand their issues and seek information from them Talk to your communities/parishes - what would help them accept development – what are their priorities How can you work with them to provide infrastructure.
- Will your community agree ? Will the developer agree? Will you and your council have delivered your plans vision?