The Community Infrastructure Levy: Speak now or forever hold your peace
Planning Resource recently published an article highlighting the fact that developers are not engaging with the Community Infrastructure Levy (CIL) process; neither responding to draft Charging Schedule consultations, nor appearing in person at hearings. Given that it's the developers that will be stumping up the bill at the end of the day, this seems alarming. After all, housebuilders, retail and commercial developers alike play a significant role in shaping Local Development Plans, so why the lack of involvement in the CIL process?
The guidance prepared by DCLG states that levy rates will be set in consultation with developers and that Local Planning Authorities should consider the views of local developers at an early stage. This, in theory, will ensure that the adopted levies do not render development unviable and that developers are provided with up front certainty in relation to the charges.
The Local Housing Delivery Group also advocates a collaborative approach to setting both Local Plan policies and CIL levy rates. By getting people round the table to share information about the pressures on viability, it is considered far more likely that the right balance will be struck.
Overview of collaborative approach to viability assessment diagram.
Despite the implications of CIL for development, it would appear that developers aren’t taking part in the process, with only three representations in person being heard on average at CIL examinations. Six councils have had no representations at all.
The national picture is similar, with the government having recently consulted on a number of proposed reforms to the CIL regulations, to be implemented in January 2014. These included proposals to make discount market sales housing exempt from levy charges, and to allow levy payments to be phased when planning permission is phased to assist in getting development underway. Only 45 private developers/house builders responded to the consultation.
The guidance is clear; without developer input councils are in danger of implementing unviable levy rates. So why aren’t developers having their say to avoid this happening?
The Planning Resource article found that developers are often disillusioned with the CIL process, considering objecting to a draft Charging Schedule to be a futile exercise. Independent examiners have readily accepted Local Authority evidence without significant modifications being required in the adoption of CIL Charging Schedules to date, which may serve to exacerbate this perception. The article also explains that many of the draft Charging Schedules use generic supporting evidence, which might be difficult to challenge, and that there are confidentiality issues associated with releasing viability data.
Running parallel to these concerns is the wider argument that CIL is unfit for purpose and should be overhauled. Many planning professionals have criticised the CIL regulations for being poorly drafted, while the British Property Federation’s chief executive described CIL as “one of the most worrying aspects of development today”. Labour’s shadow planning minister, Roberta Blackman-Woods MP, recently told Planning Magazine that the Party was considering abolishing CIL and the system of Section 106 agreements altogether.
Advice for Developers
Despite the ongoing debate regarding the future of CIL, the fact is that for now it’s here and it doesn’t appear to be going anywhere in a hurry. Furthermore, once adopted, levies are non-negotiable. In this regard, as a developer with an interest in the area, to not be involved in a draft Charging Schedule consultation could result in a future wedded to an unviable fee. Speak now or forever hold your peace.
Furthermore, involvement in the process may strengthen your position in an application or appeal scenario where viability determines the level of planning gain. If you’ve previously produced evidence criticising a draft CIL Charging Schedule, the Local Authority can’t assume that your lack of involvement confirms that the site must be viable with the rate of planning gain required by policy.
As a final observation, it can also be useful to review a CIL Charging Schedule if you are preparing an application within a Local Authority area that requires a controversial change in land use. The fact that certain types of development are excluded from the schedule could strengthen your argument that a site is unviable to be developed for the use for which it has been allocated. NJL have recently deconstructed a Council’s CIL evidence to make this argument on behalf of a client looking to develop housing on an allocated employment site, and it proved to be a valuable resource.
If you want to find out more about the CIL process and how you can be involved, or how CIL might affect your site or development, get in touch with NJL today. Our in-house team of technical experts can assist with all stages of the planning process.
Images used courtesy of Images Money on Flickr and Local Housing Delivery Group.