The Community Infrastructure Levy – A planning gain? 1 Janet Askew, Adam Sheppard University of the West of England, Bristol Lorraine O’Connor Foot 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? 2 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? 4

History of value capture in the UK 5 Britain: ‘the world’s former laboratory of betterment capture instruments’ (Alterman, 2012)

Overview 6 Land Values Development Values Planning Agreements S.13 Housing, Planning etc. Act 1909 S.34 TCPA 1932 S.25 TCPA 1947 S.52 TCPA 1971 Planning Gain Planning Obligations S.106 TCPA 1990 CIL Planning Act 2008 CIL Regs Viability? Betterment Levies and Taxes Development Charge 1947 Batterment Levy 1967 Development Land Tax 1976

Distinguishing characteristics 7 NEGOTIATION Section 52 agreements (1971) Unilateral agreements Planning Obligations (1990) CERTAINTY Land tax Compensation & betterment Planning gain supplement Community 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 development  fairly and reasonably related in scale and kind to the development. (NPPF, 2012) 8

Good design 9 Education and culture

Public art 10

Flood defences 11

Affordable housing 12

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 13

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 14

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 16

Potential CIL infrastructure requirements 17 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 21

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 24 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? 25 Janet Askew, Adam Sheppard University of the West of England, Bristol Lorraine O’Connor Foot Anstey