1. 18 th December 2013 South Lakeland District Council Community Infrastructure Levy Pre ‘Preliminary Draft Charging Schedule’ Consultation

2. Agenda 1.Regulations and Guidance 2.Ground Rules 3.Factors to weigh up 4.Evidence 5.Potential yield 6.What others are doing

3. CIL Regulations (14) (1) In setting rates (including differential rates) in a charging schedule, a charging authority must aim to strike what appears to the charging authority to be an appropriate balance between— (a) the desirability of funding from CIL (in whole or in part) the actual and expected estimated total cost of infrastructure required to support the development of its area, taking into account other actual and expected sources of funding; and. (b) the potential effects (taken as a whole) of the imposition of CIL on the economic viability of development across its area.. (2) ……. 3

4. CIL Guidance (8 & 10) 4 …… the levy is expected to have a positive economic effect on development across an area. …. charging authorities should show and explain how their proposed levy rate (or rates) will contribute towards the implementation of their relevant Plan and support the development of their area. …… The examiner should be ready to recommend modification or rejection of the draft charging schedule if it threatens delivery of the relevant Plan as a whole.

5. CIL Guidance (87 & 88) …. section 106 requirements should be scaled back to those matters that are directly related to a specific site, and are not set out in a regulation 123 list. Where the regulation 123 list includes a generic item (such as education or transport), section 106 contributions should not normally be sought on any specific projects in that category. 5

6. Positively Prepared In order to be appropriate, the cumulative impact of these standards and policies should not put implementation of the plan at should facilitate development throughout the economic cycle. NPPF 174 … charging authorities should show and explain how their proposed levy rate (or rates) will contribute towards the implementation of their relevant Plan and support the development of their area. CIL Guidance (10) 6

7. Ground Rules Not required to adopt CIL CIL not negotiable once set CIL will not fund everything Can (and must) only spend CIL on infrastructure (less admin and 15%/25% for neighbourhood) Does not replace s106 – but no ‘Double Dipping’ S106 pooling restrictions – up to 5 sites CIL, s106, Affordable, CfSH, etc – paid from same pot

8. Net for infrastructure 1.5% retained for admin 2.15% / 25% for community 8 Parish Council and a Neighbourhood Plan = 25% uncapped paid to Parish Parish Council but no Neighbourhood Plan = 15% capped at £100/dwelling paid to Parish No Parish Council but there is a Neighbourhood Plan = 25% uncapped paid to Parish - Local Authority consults with community Parish Council but no Neighbourhood Plan = 15% capped at £100/dwelling - Local Authority consults with community

9. Factors to weigh up 1.Regulation and Guidance 2.Differential Rates 3.CIL v s106 4.Infrastructure Delivery (RISK) 5.Uncertain Market 6.Neighbouring Authorities 7.S106 History 8.Costs of Infrastructure and Sources of Funding 9.Timing of the Plan / potential adoption of CIL CIL Setting Strategy

10. Broad Choices 1.Set CIL as high as possible 2.Balance CIL and s106 3.Set a low rate of CIL 4.Do not adopt CIL 10

11. Large Sites ……In some cases, charging authorities could treat a major strategic site as a separate geographical zone where it is supported by robust evidence on economic viability. CIL Guidance (34)

12. Infrastructure Evidence Size of ‘funding gap’ bearing in mind other sources of funding Identify the nature of the infrastructure requirements and whether they: –are they site specific and can be delivered through s106 –do they relate to a small number of other sites and may be suitable for delivery under s106 –are they more general items that will be best delivered through CIL

13. Funding Gap Approximately region of £40 million Kendal Highways Improvements Package Education – primary and secondary places Ulverston and Kendal + Cartmel Priory Secondary School Highways Infrastructure – key employment sites Regeneration and Public Realm Strategic open spaces/green infrastructure Other Strategic highways non site specific and non- Kendal measures – e.g. pedestrian, cycling and public transport Community Infrastructure

14. Viability Evidence CIL Regulations 11(f) “relevant evidence” means evidence which is readily available and which, in the opinion of the charging authority, has informed its preparation of the draft charging schedule; CIL Guidance (28) The legislation (section 212 (4) (b)) requires a charging authority to use appropriate available evidence to 'inform the draft charging schedule'. A charging authority’s proposed levy rate (or rates) should be reasonable given the available evidence, but there is no requirement for a proposed rate to exactly mirror the evidence, for example, if the evidence pointed to setting a charge right at the margins of viability. There is room for some pragmatism. Draft NPPG (ID 10-005-130729 Last updated 15/08/2013) Evidence should be proportionate to ensure plans are underpinned by a broad understanding of viability. Draft NPPG (ID 10-009-130729 Last updated 15/08/2013) Viability assessments should be proportionate, but reflect the range of different development, both residential and commercial, likely to come forward in an area and needed to deliver the vision of the plan.

15. Existing Available Evidence This report concludes that the South Lakeland Local Plan: Land Allocations Development Plan Document provides an appropriate basis for the planning of the District over the next 12 years providing a number of modifications are made to the Plan… Overall, I consider the Study to be adequately robust in terms of the evidence sources and methodology used. The judgements made appear reasonable and a reassuringly cautious approach has generally been taken. Inspector’s report, 14 th November 2013

16. Harman / RICS

17. Standard Viability Test Gross Development Value (The combined value of the complete development) LESS Cost of creating the asset, including PROFIT (Construction + fees + finance charges) = RESIDUAL VALUE Residual Value v Existing / Alternative Use Value 17

18. Gross Development Value All income from a Scheme Construction Site Remediation Abnormals S106 Etc. Fees Design Engineer Sales Etc. Profit Developers Builders Land Existing / Alternative Land Value + uplift CIL, Aff Housing, enviro, design, etc

25. Central Lancashire£70 Trafford£20, £40, £80 Bolton£50 West Lancashire£0, £85 Newcastle£0, £16, £88 Gateshead£16, £88 Durham£0, £15, £80, £250 Poole£75, £100, £150 Bristol£50, £70 Plymouth£30 Exeter£80 Mid Devon District Counci£90 Torbay£100 South Somerset£150, £100, £32 Taunton Deane£0, £0, £70, £125 Swindon Borough Council£55 Purbeck£40, £100, £180 North Somerset£0, £40, £60 East Devon£56, £8, £12

26. Strategy Site Specific matters – s106 General and wider matters – CIL Cautious approach

27. CIL or s106 Infrastructure funded by CIL Funded by S.106 Agreement i.Transport and public realm ii.Education iii.Off-site outdoor sport and recreation iv.Off-site green infrastructure i.Affordable Housing ii.On-site or localised off-site flood defence if necessary to ensure a development is adequately protected. iii.On-site provision of outdoor Playing Space iv.Development specific mitigation

28. Table 7.4 Recommended rates of CIL Development TypeRate of CIL Kendal and Ulverston Canal Head regeneration areas – all development types. £0/m 2 Residential£60/m 2 Large Strategic Housing Sites As for residential – unless alternative case made by relevant site promoters Super Markets and Retail Warehouse £150/m 2 Hotels£35/m 2 Sheltered/Retirement Housing £150/m 2 Extra Care£150/m 2

29. Possible Income? Estimated in the region of roughly £24 million – Residential non-affordable – allocations and windfalls

30. Going Forward Informal engagement on Draft CIL Viability Study – comments to be received by 10 th January 2014 – please send to Damian Law – d.law@southlakeland.gov.uk Consult on Preliminary Draft Charging Schedule – Early New Year -Updated IDP, CIL Study, Draft Reg 123 List -Documents will be placed in Inspection Points, letters and emails sent to interested persons and bodies Consult on Draft Charging Schedule Examination on representations received on Draft Charging Schedule Adoption – by end 2014