The Community Infrastructure Levy – A planning gain?

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Janet Askew, Adam SheppardUniversity of the West of England, Bristol

Lorraine O’ConnorFoot Anstey

• Successive attempts have been made over nearly one hundred years to capture betterment in land values from development

• The latest of these ideas is currently being implemented with a more certain approach – the imposition of a new ‘tax’ which will contribute to the provision of infrastructure; the ‘Community Infrastructure Levy’ (CIL).

• The question is whether this new model demonstrating signs that it is a genuine gain for the actors involved in planning implementation?

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Context

• Literature review• Practice and academic materials

• Identified and reviewed case studies

• Interviews• Public sector planners / Private practice planners/ Councillors

• Reflected on practice and theory

Approach

Who are the actors?

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Figure 9 CIL Key Actors

LPA

Community Developer

History of value capture in the UK

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Britain: ‘the world’s former laboratory of betterment capture instruments’ (Alterman, 2012)

Overview

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Distinguishing characteristics

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NEGOTIATIONSection 52 agreements (1971)

Unilateral agreementsPlanning Obligations (1990)

CERTAINTYLand tax

Compensation & betterment Planning gain supplementCommunity Infrastructure

Levy (CIL) (2010)

Planning Obligations (S.106 TCPA 1990)

Defined and interpreted by courts and government guidance:

necessary to make the development acceptable in planning terms directly related to the developmentfairly and reasonably related in scale and kind to the development.

(NPPF, 2012)

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Good design

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Education and culture

Public art

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Flood defences

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Affordable housing

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S.106 model

Section 106

• Negotiated and flexible• Related to the proposal• For affordable housing • No fixed sums• Not mandatory• Differs between local authorities• Monitoring not statutory• Inconsistent between authorities

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The [perceived] issues of Section 106 Agreements

• Inequitable – depends on developer’s funds and surplus• Ability of LPA to negotiate / unreasonable requests• Corrosive to neutrality of planning system• Secrecy – negotiations not in public domain• Compliance • Consistency – between local authorities and within• Lengthy delays: Costly • Underspent by many local authorities

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Precursors to CIL

Milton Keynes Infrastructure Tariff (roof tax)•£18,500 per home •£105,300/acre (£260,000/ha) of employment space

Merton Rule

•10% of energy from on-site renewable energy sources

Community Infrastructure Levy

CIL is a fixed flat rate charge levied against all new floorspace. The local planning authority will:

– create a charging schedule for infrastructure – locally determine the level of payment for residential and

commercial development– spend the income (or in kind) anywhere in its area– create a balance between viability, and mitigation of impact – pass money to local communities to spend

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Potential CIL infrastructure requirements

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The Planning Act 2008 provides a wide definition of the infrastructure which can be funded by the levy, including:

•transport•flood defences•schools•hospitals and other health and social care facilities•play areas•parks and green spaces•cultural and sports facilities•district heating schemes•police stations; and •community safety facilities. The levy includes a 5% administration fee to enable the delivery of the model.

CIL charge setting process

CIL Formula

chargeable development (A) x levy rate (R) x inflation measure (I)=

chargeable amount

CIL in Newark and Sherwood

• Variable schedule areas set for housing and commercial CIL rates

• zero CIL areas• funds roads for which money is

limited

Plymouth charging schedule

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Section 106 and CIL: Comparison

Section 106

• Negotiated and flexible• Related to the proposal• For affordable housing • Sums payable negotiable• Social gains: public open

space/amenity provisions/use• Differs between local authorities• Obligations steered by planning

policy• Monitoring not statutory• Can be varied• Claw back provisions

Community Infrastructure Levy

• Fixed sums according to development and schedule

• Flexibility in spend• Contributes to a general fund for

social, commercial, transport and energy infrastructure

• Cannot pay for affordable housing• Mandatory to pay • Monitoring is statutory• Open and transparent• Urban/rural issues• Only new buildings / floorspace can

be charged

Where are we now?

Positive change from CIL

• Non-negotiable• Transparency – process• Transparency – cost known upfront• Certainty for all?• LPA model flexibility• LPA spend flexibility• Monitoring and compliance• Neighbourhood planning role

Arising issues

• Non-negotiable: viability questions• Transparency - spend • Interaction with S.106: Additional

tax?• ‘Gap funding’?• Impact upon S.106 and affordable

housing provision• Reduced planning gain for

developer• Neighbourhood planning capacity• Exceptions limiting funding stream• Constrained by List• Prioritising the spend• Regulations continually changing

Moving forward

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• Dilemma:The issues being presented concerning CIL, if not addressed, would lead to the

issues currently associated with S.106 agreements.

Requirement for transparent and robust mechanism to allow negotiation of site viability matters in CIL to ‘protect’ S.106 and, in particular, affordable housing

Greater transparency of S.106 negotiations (within reasonable parameters of financial disclosure)

Requirement to increase certainty for CIL spending and prioritising the spend. Has the link between the development and the betterment been lost?

Consolidation

The Community Infrastructure Levy – A planning gain?

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Janet Askew, Adam SheppardUniversity of the West of England, Bristol

Lorraine O’ConnorFoot Anstey