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Technical Consultation on the
Infrastructure Levy
Workshop – Delivering Infrastructure
and Spending the Levy
Planning Advisory Service – 20/04/23
Aims
The aim of this workshop is to:
• Explain how the Infrastructure Levy will deliver the infrastructure and mitigation that is needed to support
new development.
• Invite questions and feedback to inform the development of regulations which will set out how the Levy will
operate.
This workshop focuses on Chapter One (primarily questions 2-8) and Chapter Four (primarily questions 21-29)
Agenda
1. Aims
2. Overview: Infrastructure Levy
3. Delivering infrastructure and the role of Section 106*
4. Breakout groups
 Feedback
5. The Infrastructure Delivery Strategy*
6. Breakout groups
 Feedback
7. Close
*Please use slido to
post and ‘up vote’
questions
Overview: Infrastructure Levy
• Reforms to largely replace section 106 planning obligations and the Community Infrastructure
Levy (CIL) in England.
• Aims to improve transparency, reduce delays, capture more value than the existing system and
deliver at least as much affordable housing.
• Chargeable on Gross Development Value (GDV) – above a minimum threshold.
• Rates set and levy collected by charging authorities.
• Non-negotiable cash payment, with affordable housing delivered on site as an in-kind payment.
• The Levelling Up & Regeneration Bill provides the legislative framework – policy detail to be set
out in regulations (following consultation).
• Introduced through ‘test and learn’.
Payment of the
Infrastructure Levy
Integral infrastructure
In-kind provision of affordable
housing
Levy-funded infrastructure Sustainable
growth and
mitigation
Levy charging
schedule
Delivery
Scope
Delivering infrastructure and role
of Section 106
Types of infrastructure
• The consultation introduces a distinction between ‘integral’ and ‘Levy-funded’ infrastructure.
• When a new scheme is built out, some on-site infrastructure will be required to make sure that the site can function.
• Other forms of infrastructure, which are not needed for a particular site to function but are needed to address the cumulative
impact of development, will be delivered using the cash raised by the Levy.
Q 2
Integral
• Required to make a scheme
liveable.
• Delivered by developers.
• Outside of Levy payment.
Levy-funded
• Required as a result of cumulative
growth in an area.
• Funded by Levy proceeds.
• Delivered by the LPA or third
parties.
Chapter 1
Options: distinguishing between integral and
Levy-funded infrastructure
• Creating this distinction will broadly ensure that Levy revenues are not used to fund infrastructure that would normally
be part of the costs of development.
• A clear and consistent approach is essential to ensure integral infrastructure can be costed into scheme delivery and LPAs
can consider when preparing charging schedules.
Option
a
Principles
established in
regulations or policy.
e.g. design, liveability
or beneficiaries.
Option
b
Nationally set list, set
out in regulations or
policy.
The list would be non-
exhaustive.
Option
c
Principles and
typology set to be set
locally.
With reference to
national
policy/guidance.
Chapter 1 Q 3
The role of planning conditions and
delivery agreements
• The Levy aims to create a simpler and more consistent system.
• Integral infrastructure will be secured through planning conditions.
• A restricted form of Section 106 agreement – ‘delivery agreements’ – will be used in circumstances
where planning conditions are not appropriate.
• Local authorities will continue to be able to use section 278 and section 38 agreements in relation to
highways matters.
Chapter 1 Q 8
Levy routeways
Core routeway
• Majority of new
developments.
• Delivery agreements
used to secure integral
infrastructure where
conditions cannot be
used.
In-kind routeway
• Large and complex
sites.
• Often bespoke
infrastructure
requirements.
• ‘Levy backstop amount’.
s106-only
routeway
• Minority of
developments, such as
those which do not meet
the definition of
‘development’ in the
Levy context.
• e.g. minerals and waste.
Certain sites will require retention of s106 planning obligations:
Chapter 1 Q 8
The threshold for the in-kind
routeway
A high threshold
of 10,000 homes
A medium
threshold of
2,000-4,000 units
Low threshold of
500 units
LPA discretion
Where the threshold for this routeway is set will have implications for the final design of the Levy:
Lower threshold =
greater the scope for
infrastructure as an in-
kind contribution.
Higher threshold =
reduction in need for
negotiated s106
planning obligations.
Chapter 1 Q 7
Timely delivery of infrastructure
Chapter 4 Q 21, 22, 23
Borrowing
• LPAs will be able to view the developer
contributions they receive as an on-going
revenue stream.
• Ability to borrow against this revenue stream,
where appropriate – making use of PWLB.
• Pass borrowed funds to infrastructure
providers.
Other mechanisms
• There may be some circumstances where
‘Levy-funded’ infrastructure may be necessary
to make a scheme acceptable.
• In such circumstances, we could enable
specified upfront payments for items of
infrastructure to be a condition for the granting
of permission.
• Potential trade-offs, e.g. developer cashflow.
Using the Levy to fund other local
needs
• Under the existing system, LPAs may sometimes provide small amounts of revenue funding where
this is considered necessary in planning terms.
• Subject to regulations, LPAs could direct an element of their levy funding towards non-
infrastructure matters.
Examples in the consultation include social
care or subsidised childcare. We are
seeking views on other examples.
We are also seeking views on whether
LPAs should be expected to prioritise
infrastructure and affordable housing needs
Chapter 1 Q 4. 5, 6
Breakout session
Integral and Levy funded Infrastructure
• How much flexibility should the Government give LPAs to define integral infrastructure locally, v. defining nationally?
• How should the Government minimise the risk of dispute over whether infrastructure should be considered integral or
Levy-funded?
Site size thresholds
• At what level should the threshold for the in-kind routeway be set? Why?
Timely delivery of infrastructure
• Are there other mechanisms for ensuring infrastructure is delivered in a timely way?
The Infrastructure Delivery
Strategy
The Infrastructure Delivery Strategy
• The delivery of infrastructure at the right time is key to supporting sustainable growth.
• Local authorities will be required to prepare a new document, called an Infrastructure Delivery
Strategy (IDS).
• The IDS will be a tool for LPAs to set out their spending priorities and for local people to
understand what infrastructure will be delivered.
• The IDS will be an opportunity for LPAs to work closely with infrastructure partners to plan for
and fund new infrastructure.
• There will be independent examination of the IDS, which must be combined with either the
examination of a charging schedule or a Local Plan.
Chapter 4
IDS: Proposed content
• Baseline of infrastructure provision in the area, how this
will be impacted by anticipated growth and what
infrastructure will be required to support it.
Part 1: Baseline
• Approach to funding infrastructure through the
Infrastructure Levy and other funding sources.
Part 2: Approach to
funding
• Strategic Levy spending plan, setting out the local
infrastructure priorities that will be funded by the Levy.
Part 3: Spending plan
Chapter 4
Parts 1 and 2: Baseline and
approach
• Parts 1 and 2 will allow LPAs to plan for the infrastructure that is required to support growth and the
deliverability of the Local Plan.
• We intend this information to build upon and replace Infrastructure Delivery Plans that currently support the
production of a local plan.
DLUHC is exploring the potential of introducing data standardisation and digital tools to support parts 1 and 2.
What is the
current level of
infrastructure
demand?
What is the
impact of
development
proposed in the
Local Plan?
What is the
funding gap?
Chapter 4 Q 25, 29
Content of the Part 3: the Spending
Plan
• The spending plan will reflect the prioritisation choices of the LPA.
• Priorities are not binding, as there will need to be the flexibility to apply the Levy differently in response to the
specifics of a development.
Integral infrastructure
Priorities for Levy
funded infrastructure
Affordable housing Neighbourhood share
Administrative share Borrowing
Non-infrastructure
items
Chapter 4 Q 24, 27
Drafting requirements
• The drafting of an Infrastructure Delivery Strategy will be a consultative and iterative process.
• This should ensure that infrastructure needs are planned for and understood holistically across
the period of a Local Plan.
• This should also ensure that providers have a better understanding of future need in an area.
• The Bill will enable LPAs to require the assistance of certain public bodies to assist them in relation
to the IDS.
• Examination will ensure that the local authority has had due regard to its obligation to consult and
take account of consultation responses.
Chapter 4 Q 26, 28
Breakout groups:
1. What information do you feel you will need to allow for strategic planning of infrastructure?
2. How can we make sure that infrastructure providers can effectively influence the identification of Levy
priorities?
3. Do you agree that the views of the local community should be integrated into the drafting of the IDS?

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Infrastructure Levy Technical Consultation (Workshop 2 Spending the levy and delivering infrastructure) .pptx

  • 1. Technical Consultation on the Infrastructure Levy Workshop – Delivering Infrastructure and Spending the Levy Planning Advisory Service – 20/04/23
  • 2. Aims The aim of this workshop is to: • Explain how the Infrastructure Levy will deliver the infrastructure and mitigation that is needed to support new development. • Invite questions and feedback to inform the development of regulations which will set out how the Levy will operate. This workshop focuses on Chapter One (primarily questions 2-8) and Chapter Four (primarily questions 21-29)
  • 3. Agenda 1. Aims 2. Overview: Infrastructure Levy 3. Delivering infrastructure and the role of Section 106* 4. Breakout groups  Feedback 5. The Infrastructure Delivery Strategy* 6. Breakout groups  Feedback 7. Close *Please use slido to post and ‘up vote’ questions
  • 4. Overview: Infrastructure Levy • Reforms to largely replace section 106 planning obligations and the Community Infrastructure Levy (CIL) in England. • Aims to improve transparency, reduce delays, capture more value than the existing system and deliver at least as much affordable housing. • Chargeable on Gross Development Value (GDV) – above a minimum threshold. • Rates set and levy collected by charging authorities. • Non-negotiable cash payment, with affordable housing delivered on site as an in-kind payment. • The Levelling Up & Regeneration Bill provides the legislative framework – policy detail to be set out in regulations (following consultation). • Introduced through ‘test and learn’.
  • 5. Payment of the Infrastructure Levy Integral infrastructure In-kind provision of affordable housing Levy-funded infrastructure Sustainable growth and mitigation Levy charging schedule Delivery Scope
  • 6. Delivering infrastructure and role of Section 106
  • 7. Types of infrastructure • The consultation introduces a distinction between ‘integral’ and ‘Levy-funded’ infrastructure. • When a new scheme is built out, some on-site infrastructure will be required to make sure that the site can function. • Other forms of infrastructure, which are not needed for a particular site to function but are needed to address the cumulative impact of development, will be delivered using the cash raised by the Levy. Q 2 Integral • Required to make a scheme liveable. • Delivered by developers. • Outside of Levy payment. Levy-funded • Required as a result of cumulative growth in an area. • Funded by Levy proceeds. • Delivered by the LPA or third parties. Chapter 1
  • 8. Options: distinguishing between integral and Levy-funded infrastructure • Creating this distinction will broadly ensure that Levy revenues are not used to fund infrastructure that would normally be part of the costs of development. • A clear and consistent approach is essential to ensure integral infrastructure can be costed into scheme delivery and LPAs can consider when preparing charging schedules. Option a Principles established in regulations or policy. e.g. design, liveability or beneficiaries. Option b Nationally set list, set out in regulations or policy. The list would be non- exhaustive. Option c Principles and typology set to be set locally. With reference to national policy/guidance. Chapter 1 Q 3
  • 9. The role of planning conditions and delivery agreements • The Levy aims to create a simpler and more consistent system. • Integral infrastructure will be secured through planning conditions. • A restricted form of Section 106 agreement – ‘delivery agreements’ – will be used in circumstances where planning conditions are not appropriate. • Local authorities will continue to be able to use section 278 and section 38 agreements in relation to highways matters. Chapter 1 Q 8
  • 10. Levy routeways Core routeway • Majority of new developments. • Delivery agreements used to secure integral infrastructure where conditions cannot be used. In-kind routeway • Large and complex sites. • Often bespoke infrastructure requirements. • ‘Levy backstop amount’. s106-only routeway • Minority of developments, such as those which do not meet the definition of ‘development’ in the Levy context. • e.g. minerals and waste. Certain sites will require retention of s106 planning obligations: Chapter 1 Q 8
  • 11. The threshold for the in-kind routeway A high threshold of 10,000 homes A medium threshold of 2,000-4,000 units Low threshold of 500 units LPA discretion Where the threshold for this routeway is set will have implications for the final design of the Levy: Lower threshold = greater the scope for infrastructure as an in- kind contribution. Higher threshold = reduction in need for negotiated s106 planning obligations. Chapter 1 Q 7
  • 12. Timely delivery of infrastructure Chapter 4 Q 21, 22, 23 Borrowing • LPAs will be able to view the developer contributions they receive as an on-going revenue stream. • Ability to borrow against this revenue stream, where appropriate – making use of PWLB. • Pass borrowed funds to infrastructure providers. Other mechanisms • There may be some circumstances where ‘Levy-funded’ infrastructure may be necessary to make a scheme acceptable. • In such circumstances, we could enable specified upfront payments for items of infrastructure to be a condition for the granting of permission. • Potential trade-offs, e.g. developer cashflow.
  • 13. Using the Levy to fund other local needs • Under the existing system, LPAs may sometimes provide small amounts of revenue funding where this is considered necessary in planning terms. • Subject to regulations, LPAs could direct an element of their levy funding towards non- infrastructure matters. Examples in the consultation include social care or subsidised childcare. We are seeking views on other examples. We are also seeking views on whether LPAs should be expected to prioritise infrastructure and affordable housing needs Chapter 1 Q 4. 5, 6
  • 14. Breakout session Integral and Levy funded Infrastructure • How much flexibility should the Government give LPAs to define integral infrastructure locally, v. defining nationally? • How should the Government minimise the risk of dispute over whether infrastructure should be considered integral or Levy-funded? Site size thresholds • At what level should the threshold for the in-kind routeway be set? Why? Timely delivery of infrastructure • Are there other mechanisms for ensuring infrastructure is delivered in a timely way?
  • 16. The Infrastructure Delivery Strategy • The delivery of infrastructure at the right time is key to supporting sustainable growth. • Local authorities will be required to prepare a new document, called an Infrastructure Delivery Strategy (IDS). • The IDS will be a tool for LPAs to set out their spending priorities and for local people to understand what infrastructure will be delivered. • The IDS will be an opportunity for LPAs to work closely with infrastructure partners to plan for and fund new infrastructure. • There will be independent examination of the IDS, which must be combined with either the examination of a charging schedule or a Local Plan. Chapter 4
  • 17. IDS: Proposed content • Baseline of infrastructure provision in the area, how this will be impacted by anticipated growth and what infrastructure will be required to support it. Part 1: Baseline • Approach to funding infrastructure through the Infrastructure Levy and other funding sources. Part 2: Approach to funding • Strategic Levy spending plan, setting out the local infrastructure priorities that will be funded by the Levy. Part 3: Spending plan Chapter 4
  • 18. Parts 1 and 2: Baseline and approach • Parts 1 and 2 will allow LPAs to plan for the infrastructure that is required to support growth and the deliverability of the Local Plan. • We intend this information to build upon and replace Infrastructure Delivery Plans that currently support the production of a local plan. DLUHC is exploring the potential of introducing data standardisation and digital tools to support parts 1 and 2. What is the current level of infrastructure demand? What is the impact of development proposed in the Local Plan? What is the funding gap? Chapter 4 Q 25, 29
  • 19. Content of the Part 3: the Spending Plan • The spending plan will reflect the prioritisation choices of the LPA. • Priorities are not binding, as there will need to be the flexibility to apply the Levy differently in response to the specifics of a development. Integral infrastructure Priorities for Levy funded infrastructure Affordable housing Neighbourhood share Administrative share Borrowing Non-infrastructure items Chapter 4 Q 24, 27
  • 20. Drafting requirements • The drafting of an Infrastructure Delivery Strategy will be a consultative and iterative process. • This should ensure that infrastructure needs are planned for and understood holistically across the period of a Local Plan. • This should also ensure that providers have a better understanding of future need in an area. • The Bill will enable LPAs to require the assistance of certain public bodies to assist them in relation to the IDS. • Examination will ensure that the local authority has had due regard to its obligation to consult and take account of consultation responses. Chapter 4 Q 26, 28
  • 21. Breakout groups: 1. What information do you feel you will need to allow for strategic planning of infrastructure? 2. How can we make sure that infrastructure providers can effectively influence the identification of Levy priorities? 3. Do you agree that the views of the local community should be integrated into the drafting of the IDS?