Lewes District Council - Developer Contributions - Town & Parish Conference 2012
- 1. ● Developer Contributions – Community Infrastructure Levy (CIL) & S106 obligations ● New Homes Bonus October 2012 Town & Parish Council Conference, Peacehaven
- 2. 1 Developer and other contributions • S106 obligations • Community Infrastructure Levy (CIL) • Highway contributions (s38 and s278 Highways Act)
- 3. 2 S106 Obligations • S106 is not replaced by CIL • Old reality – pre 2008 • New reality-post 2008: Times have changed – viability Times have changed - legislation
- 4. 3 The tests for S106 contributions: • If the development is capable of being charged CIL, the S106 obligation must meet these 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 (2010 CIL Regulations)
- 5. 4 S106 obligations • Site specific mitigation measures (e.g. highway and drainage works) • For pooled contributions up to April 2014/CIL adoption • Then for up to five obligations where infrastructure not funded by CIL • Key date: April 2014 – scope of S106 restricted after that time
- 6. 5 What is a CIL? • A mechanism for developer contributions • Set by development type and zone • A charge per square metre of floorspace • Not site specific: contribution goes into a pot: not specifically for particular sites • Set by Local Planning Authority via a CIL Charging Schedule
- 7. 6 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 can decide what (and that can change over time)
- 8. 7 Charging CIL – some basics • £ per square metre on net additional (internal) floorspace • Rates can vary by area or use ( or both) • Due when the development starts • It is index linked • The landowner is responsible for paying it
- 9. 8 When can 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
- 10. 9 Why set a CIL? • Money for infrastructure through charging a wider range of new development -a little from almost everyone (so fairer) • There is a lack of government or other money to provide infrastructure • It is set out in a schedule based on evidence (so more transparent) • Developers have certainty • Changes to s106 – legal tests and pooling
- 11. 10 Setting your CIL • Identify the infrastructure funding gap: what infrastructure do you need to support planned development? • Then see what CIL rate it is viable to charge • Check out the consequences of the rate you are seeking on key uses • Make sure that your rate is backed by robust evidence • Consult, independent examination
- 12. 11 What you need to set a CIL? • Up to date development plan – not necessarily a core strategy • Evidence on infrastructure funding gap • Evidence on viability • All evidence is „appropriate available evidence‟
- 13. 12 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.
- 14. 13 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 rates can only be differentiated on viability grounds.
- 15. 14 Differential rates • Different between uses (not just use classes) • Different across the area • Both or neither • All differential rates must be based on viability evidence (not policy objectives)
- 16. 15 Emerging CIL rates from frontrunner authorities Housing Retail Offices LB Westminster £200 - £560 £560 £200 - £400 LB Redbridge £70 £70 £70 Portsmouth £105 £53 £0 Newark & Sherwood £60 - £75 £100 £0 Colchester £120 £90 - £240 £0 LB Croydon £120 £120 £20 Mid Sussex £150 - £235 £0 - £100 £0 Wealden £110 - £180 £20 - £100 £0 All figures £ per square metre internal floorspace
- 17. 16 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
- 18. 17 Spending CIL • Must be spent on infrastructure needed to support the planned development of the area • It can be spent on infrastructure outside your area, and be spent by another body • “Meaningful proportion” passed onto towns and parishes (DCLG) • It is advisable to publish a list of the infrastructure you intend to use CIL for (Reg 123 list)
- 19. 18 How is the levy paid? • Usually cash contribution • Exceptionally, land contribution can be considered to offset CIL liability • Falls due on commencement of the development: but can agree to payment by installments
- 20. 19 Governance • Review your infrastructure priorities annually • Set up council procedures and delegation agreements for CIL • Create the necessary CIL management structure. • Involvement of other organisations? (counties, towns & parishes) • Enter into memoranda of co-operation with other bodies (e.g. neighbouring authorities)
- 21. 20 What are we doing at LDC? • Joint technical work with other East Sussex authorities, Brighton & Hove, SDNPA • Preparing high level CIL Economic Viability Study • Each authority will need to do further detailed work • Will inform CIL charging schedules by each authority over next 12 - 18 months. • Need to get LDC/SDNPA Core Strategy in place first.
- 22. 21 New Homes Bonus (NHB) • Financial incentive to local authorities to promote new housing development • NHB based on council tax for each additional home built, or brought back into use • DCLG payment formula assessed annually • NHB began for 2011/12 financial year: will build up gradually over six years • Spending NHB: wholly at discretion of local planning authority • Details on www.communities.gov.uk
- 23. • LDC received £211,341 in 2011/12 £519,450 in 2012/13 £730,791 TOTAL • NHB money held by LDC in ring-fenced reserve • Spending so far: – Neighbourhood Planning £70,000 – Newhaven University Technical College Bid £29,000 – Democratic Conversations Action Plan £10,000 • But, new NHB income offset by more significant DCLG cuts in financial support for local authorities. Even deeper cuts expected next year and beyond.
- 24. 22 Questions?