Agenda item

Community Infrastructure Levy (CIL) (Agenda Item 7)

Report of the Assistant Director for Commissioning.

Minutes:

The Executive Member presented the report which set out the preliminary results from the consultation exercise.  He then handed over to the Planning Policy Team Leader and the Planning Policy Officer to provide more background information.

 

The Planning Policy Team Leader explained that the CIL was a charge to be levied on new development.  It would be a tax on net new floorspace, subject to criteria.

 

The current S106 agreements had restrictions and the role and use of S106 agreements was being scaled back from April 2014.

 

The CIL would break the link between place and infrastructure contributions.  S106 agreements would still be needed for on-site requirements and Highway agreements would also still be required.  In future it would be possible to capture contributions from much smaller developments subject to certain exemptions.


The ‘meaningful proportion’ for communities was clarified.  Parishes without a Neighbourhood Plan would receive 15% of the CIL capped at £100 per dwelling.  Parishes with a Neighbourhood Plan would receive 25% of the CIL not capped. 

 

The Planning Policy Officer explained that the CIL had to be supported by viability evidence.  A Viability Assessment had been prepared which considered a range of notional development scenarios according with best practice.  It was based on the residual land valuation method which worked out the gross value of a site, minus all costs and profits and determined how much money would be left to purchase the site and pay the CIL.

 

A workshop had been held with Developers and key stakeholders to check the assumptions used in the research and to get buy-in from them at an early stage in the process.

 

Using housing sales values, the District could effectively be divided into three residential zones; high, medium and low.  Viability was an issue and the affordable housing level had been tested at lower levels to see its effect.  It had been established that there was scope to set the CIL at £60 per square metre in the high value zone of the district.  The medium and low value zones would be zero rated as even with all the different scenarios tested they had no viability for CIL.

 

Retail, employment and other schemes had also been tested.  Class A1 development, outside town centres was the only viable retail development.  The employment development scenarios showed that they did not have any scope for CIL.  A number of other districts had reached the same conclusion.  However, care homes, hotels and holiday accommodation could support a CIL charge.

 

The Preliminary Draft Charging Structure consultation had elicited 18 responses; three in support of the proposals and 15 either objecting or making comments.  Concerns had been raised about the use of two charging zones for residential development.  The results of the consultation were summarised at Appendix A to the report.  It had been concluded that more viability work was needed before further consultation took place.

 

The Planning Policy Team Leader concluded the presentation by advising Members that the Government had produced a consultation on a fourth set of changes to the regulations and those new regulations were due in the Autumn.   The current timetable for adoption was to consult on the Draft Charging Structure in October/November 2013 and subject to the responses received to submit the report for examination in December 2013.  A Hearing would take place in January 2014 and the Inspectors report would be expected in February/March 2014.  The CIL was due to be adopted in April 2014.

 

The Chairman thanked the officers for a concise synopsis of the report.  He invited Members to ask questions.

 

The Executive Member drew attention to paragraph 1.5 of the report which explained residual land value.  He advised that the major developments in Attleborough and Thetford would be subject to S106 agreements due to the scale of growth and impacts arising.  He was personally in favour of the CIL.

 

Councillor Gilbert commended the tremendous amount of work done and the very readable report.  He asked whether existing S106 agreement obligations would remain and it was confirmed that if permissions had already been granted, subject to a legal agreement, the terms of that agreement would remain.

 

He asked whether the banding zones were flexible and was concerned that they might lead to a shortage of land in the non-CIL areas.

 

The Planning Policy Team Leader said that the zones were not flexible but they would be looked at closely.  With regard to additional development in the zero rated zones he thought it unlikely as the sales values were lower in those areas which made development less attractive.

 

Councillor Bambridge asked if development in the zero rated zones would be subject to S106 contributions.  It was noted that that would depend on what was needed to make the scheme acceptable.

 

Although he was in favour of the CIL, Councillor Bambridge did not support the zero rate.  He thought the zoning was too heavy handed and that the figures did not stack up.  He asked if the Developer was expected to pay the charge within 60 days of receiving planning permission or of starting work.  Either would be a long time before they received any return on their investment.

 

The Planning Policy Team Leader advised that there had been no significant response from developers to the first consultation.  The Greater Norwich Partnership had set their CIL rate in the areas adjoining Breckland at £50 per dwelling.  He appreciated the sensitivity of the zero rate but had tried to provide the best solution on the evidence available.  The CIL was not meant to stifle development and Inspectors’ reports on CIL examinations had been taken into account and indicated that they did not support the charge if it prejudiced development.

 

There was an opportunity to phase instalments for payment of CIL but a balance had to be struck as money was needed to pay for infrastructure.

 

Councillor Irving thought that the number of responses was low and asked how the consultation had been publicised.  She was advised that a range of methods had been used including a notice in the local press.  Everyone that had previously expressed an interest in the Local Plan and Planning Policies had been written to individually.  All Town and Parish Councils had been contacted more than once and drop-in sessions had been held for them.  The CIL Regulations set out the publication requirements and the Council had gone above and beyond them.

 

Councillor Richmond asked how the payment would be enforced and it was noted that the CIL had an extensive set of processes and would follow a similar non-payment process to other tax enforcement.

 

Councillor Kybird thought that there should be a District wide common CIL to be paid before development to address the infrastructure deficiency.

 

The Planning Policy Team Leader said the new Local Plan would assess viability across the whole District and look at all the requirements in the Plan to ensure that they were deliverable.

 

The Chairman noted that the Council currently required 40% affordable housing.  He thought that if it was reduced it might actually lead to more housing and more development in the CIL framework.  A lot of planning applications were already negotiated down from 40%.  When the Core Policies were reviewed the Council needed to consider how to deliver development across the District and address the huge deficit for infrastructure needs.

 

The Executive Member said that they would look seriously at what, where and how the Council delivered development.  They had a policy of negotiation of the 40% affordable housing requirement and viability was the key word to bring housing forward.  He drew attention to the £13.21million funding gap referred to in paragraph 1.18 of the report and said that that did not include administration costs, or the 25% or 15% to Parishes, so the gap was even bigger.  The infrastructure requirement was known, it was just not known what it would cost.  It was a difficult hole to plug.

 

Councillor Matthews asked if a development had not commenced whether S106 requirements would remain and it was confirmed that requirements within an extant planning permission would still have to be provided.


The Chairman thanked the officers for a very interesting presentation.  The report was noted.

Supporting documents: