Report To:

Date:

Reporting Officer:

Subject:

Report Summary:

Recommendations:

Links To The Community Strategy:

Policy Implications:

Financial Implications:

(Authorised by the Borough Treasurer)

Legal Implications:

(Authorised by the Borough Solicitor)

Risk Management:

ITEM NO: 12

STRATEGIC PLANNING AND CAPITAL MONITORING PANEL

1 July 2013

Robin Monk – Executive Director for Economic Growth, Investment and Sustainability

COMMUNITY INFRASTRUCTURE LEVY – CONSULTATION ON FURTHER REFORMS

The report gives a brief overview of proposed reforms to the Community Infrastructure Levy (CIL) and the potential implications for Tameside.

That the report is noted.

Successfully implementing schemes funded through developer contributions and S.106 agreements would potentially support community strategy priorities concerning supportive communities, safe environment, prosperous society, learning community and attractive borough.

Before introduction, CIL would require new policy to be adopted by the Council, based on a robust and tested evidence base. The current system is enshrined in the Town and Country Planning Act 1990 and related planning guidance, subject to the restrictions imposed by the CIL Regulations and locally by the adopted Tameside Developer Contributions Supplementary Planning Document.

There are no direct financial implications arising from this report.

Any future decisions taken by the Council regarding CIL and the changes to the section 106 regime as a result of the CIL Regulations, will affect the amount of developer contribution funds received from the implementation of the planning proposals for new developments.

These are set out in the report at this stage.

The Core strategy and if pursued the Council’s CIL charging schedule need to be adopted before April 2015 to ensure the current pooled infrastructure charging from developments can continue without impediment. The fall-back position is to rely on section 106 agreements, with limited pooling for infrastructure, but no restriction on site specific mitigation.

Access to Information: The background papers relating to this report can be inspected by contacting the report writer, Iain Chambers – Planning Development Manager:

Telephone: 0161 342 3108

e-mail: iain.chambers@tameside.gov.uk

1.0 INTRODUCTION 1.1 The Community Infrastructure Levy (CIL) is the Government’s new method for allowing

local authorities to collect developer contributions for infrastructure required to help mitigate the impacts of development. Introduced by the former Labour Government via the Community Infrastructure Levy Regulations (April 2010), CIL is intended to compliment Section 106 agreements, with CIL used for general infrastructure contributions and Section 106 obligations for site-specific mitigation. It should be noted, that while CIL is the Government’s preferred method of collecting developer contributions, it is discretionary and local authorities have the option of purely using Section 106 agreements, although pooling is limited to 5 contributions per infrastructure project.

2.0 SETTING THE CHARGE

2.1 The CIL Regulations (Regs) require the production of a Charging Schedule that sets out the

rates to be applied across a local authority area. This must be based on a sound evidence base to ensure CIL rates do not adversely impact on the economic viability of development.

2.2 A robust evidence base is likely to include the following information:

Valuation Report: Land values for different types of development / locations and sales values for different types of development / locations need to be assessed and agreed.

Construction Costs: Costs associated with constructing different developments (build cost, professional fees, finance costs, building regs etc) need to be estimated and agreed.

Infrastructure Needs Assessment: identifies potential future infrastructure needs/shortfalls that helps demonstrate the need for CIL contributions. This can be undertaken via an Infrastructure Delivery Plan (IDP).

2.3 Rates are charged at £/m2 on the net additional floorspace and the Regs allow authorities

to charge different rates whether by use or area, or use and area, as long as this can be justified by the evidence.

2.4 Linked with the Charging Schedule and IDP, an authority should produce a list of

infrastructure projects (Reg 123 list) it considers are needed to support future development (in line with the Core Strategy). This should include indicative costs and potential funding streams that demonstrate a funding gap and in turn a need for CIL funds. The list will accompany the draft Charging Schedule through its examination, but can be revised by the Council following adoption.

3.0 TAMESIDE 3.1 In order to adopt a Charging Schedule a local authority must have an up to date

Development Plan (Core Strategy) in place. The Tameside UDP (2004) does not constitute an up to date plan, as such the Council is unable to adopt a Charging Schedule until its Core Strategy has been adopted. Under the current Regs, Tameside will be able to continue to use its Tariffs System until 6 April 2014 (although as detailed below, it is proposed to extend this deadline until April 2015). After this date, the Council will need to revert to using s106 agreements until it adopts a Charging Schedule (if it elects/is financially viable to pursue CIL).

4.0 CONSULTATION ON PROPOSED REFORMS 4.1 Whilst the Government has chosen to retain the CIL system, it has proposed two sets of

reforms to the regulations. The first proposals were consulted on between October and December 2011 and primarily focused on the inclusion of funding for affordable housing and payments to parish councils/neighbourhood forums. This period of consultation ended in December 2011, with AGMA submitting a joint GM response (Appendix 1).

4.2 Consultation on the second set of proposed reforms ended on the 28 May 2013. As with

the previous consultation, AGMA compiled a joint response from all GM authorities (Appendix 2). The revisions proposed within this consultation document are as follows:

Rate Setting and Evidence

4.3 The current Regs require charging authorities to strike an appropriate balance between funding the infrastructure needed to support/mitigate against development, and the potential effects the Levy has on the viability of development.

4.4 The Government’s proposal is to give further weight to this, requiring a more evidence-

based test to ensure this balance is achieved. The inspector will ultimately assess this during the examination of the Charging Schedule. Tameside has yet to undertaken the relevant viability assessments to support CIL, as such there are not considered to be any implications related to this evidence based proposal.

4.5 The current Regs allow charging authorities to set different rates for ‘zones’ and ‘uses’.

Differential rates cannot be set in relation to the size of a development. However, the Government is proposing to revise this, allowing authorities to set differential rates for both use and the scale of development. It is considered that this revision will be beneficial to Tameside, particularly in relation to large scale retail developments (if supported by the relevant evidence).

The Infrastructure List

4.6 Under the existing regulation 123 charging authorities are encouraged, but not required, to produce a list of infrastructure projects they wish to fund by the Levy. The purpose of the list is to ensure authorities cannot seek contributions from planning obligations for projects to be funded by the Levy. The list can be changed at any time and does not have to be published with the draft Charging Schedule. However, it is likely to form part of the evidence base at examination.

4.7 The Government’s proposal is to require charging authorities to publish a regulation 123 list

with its preliminary draft Charging Schedule and require it to be part of the ‘appropriate evidence’ at examination. It is also proposing to require ‘proportionate consultation’ on any amendments to the list after the Charging Schedule has been adopted.

4.8 It is not considered that either of these proposals would have any specific implications for

Tameside. The only consideration would be to ensure the infrastructure projects on the list are appropriately and accurately costed, as scrutiny of it is likely to be increased.

The Relationship between the Community Infrastructure Levy, Section 106 and Section 278 Agreements

4.9 Regulation 123 details that on the local adoption of a Levy, or nationally by 6 April 2014, charging authorities are restricted to only being able to pool 5 s106 for infrastructure not intended to be funded by the Levy. This restriction goes further by preventing the use of planning obligations where five or more separate planning obligations related to a project or type of infrastructure, have been entered into since April 2010.

4.10 The Government has proposed to revise the national deadline for limiting the use of pooling

section 106 agreements from April 2014 to April 2015. This proposal is fully supported by

Tameside (and AGMA). It will enable the Council to continue using its Tariffs system whilst appropriate CIL evidence can be undertaken and the Core Strategy is adopted.

4.11 The limitation on not using Section 106 agreements for projects intended to be funded by

the Levy does not apply to section 278 agreements. As such, funds from the Levy and section 278 can be combined to fund road improvements. The Government does not believe this ‘double funding’ should occur, as such has proposed that section 278 agreements be included under regulation 123, so the same projects cannot be funded by both CIL and section 278 agreements. Potential implications of this are unknown until further detail is provided. On the surface it should not impact on the delivery of road infrastructure, as long as appropriate consideration and planning is undertaken when compiling the regulation 123 list. Levy rates will be an obvious consideration. If the anticipated development is to have a zero or low rate, then the project should remain off the regulation 123 list, so it can be funded through a section 278 agreement.

Community Infrastructure Levy Payments

4.12 Regulation 73(1) enables charging authorities to accept one or more land payments to satisfy the whole or part of the Levy due. The Government has proposed to extend this form of ‘payment in kind’ to allow charging authorities to accept the provision of infrastructure, in part or full, for payment of the Levy due. This proposal is not considered to have any implications for Tameside.

4.13 The Government also consulted on the following proposed revision to the payments

process, neither of which are considered to have implications for Tameside:

- Allowing all planning permissions (outline and full) to be capable of being treated as phased development, enabling the phasing of Levy payments.

- Enabling the re-calculation of the Levy where the provision of affordable housing has varied.

- Where a new application is submitted with design changes, but no increase in floor space, the levy triggered would be reduced by the amount already paid on the earlier permission.

4.14 The proposed revision that may impact on Tameside relates to the removal of the vacancy

test. At present where a building has not been in use for a continuous period of at least six months out of 12, the floorspace cannot be offset against the Levy (vacancies less than 6 months can offset any existing floorspace against increases, resulting in conversions, with no increases in floor space, not liable for CIL). The Government has proposed to remove the vacancy test, resulting in only increases in floorspace of all refurbishments and redevelopments being subject to CIL. The only exception to this would be where a building is considered abandoned (where planning permission would be required to resume the use). This proposal has created concern across GM, as highlighted within the AGMA response, particularly in relation to residential conversions and their associated impact on infrastructure.

Exemptions and Reliefs

4.15 At present social housing for rent or shared ownership are exempt from CIL. The Government has proposed to extend this relief to include discount market sales, with specific criteria attached to it. This proposal is not considered to have any implications for Tameside.

4.16 Where a development is to contain a mix of social housing and housing for sale, the

Government has proposed to include all communal areas and communal ancillary areas within the CIL relief element of the development. This proposal is not considered to have any implications for Tameside.

4.17 Regulations 55 to 58 allow charging authorities to set discretionary relief for exceptional circumstances. This relief can only be applied via a section 106 agreement where 3 preconditions are met. One of these is ‘the amount payable under the agreement is higher than the levy liability’. It is this the Government has proposed to amend either, removing the need for the amount to be greater than the levy liability, or change the requirement so the amount is a set percentage of the levy liability. Whilst there may be sites within the Borough that could seek discretionary relief, it is not considered that either of the proposed amendments would have any implications for Tameside.

Appeals

4.18 At present the current regulations do not allow the right to request a review or appeal against the chargeable amount once development has commenced. The Government has proposed that this be changed to allow a review or appeal by applicants submitting section 73 applications or retrospective applications. Such an amendment is not considered to have any implications for Tameside.

5.0 RECOMMENDATION 5.1 That the report is noted.

Questionnaire

About you

i) Your details:

Name:

Chris Findley

Position:

AGMA Lead Planner and Assistant Director - Planning and Transport Futures (Salford City Council)

Name of organisation (if applicable):

Association of Greater Manchester Authorities (AGMA)

Address:

AGMA Planning and Housing Team Manchester City Council, P.O. Box 532, Town Hall, Manchester, M60 2LA

Email:

chris.findley@salford.gov.uk

Telephone number:

0161 793 3654

ii) Are the views expressed on this consultation an official response from the organisation you represent or your own personal views?

Organisational response

Personal views

iii) Please tick the box which best describes you or your organisation:

District Council

Metropolitan district council

London borough council

Unitary authority/county council/county borough council

National Park Authority

The Broads Authority

The Mayor of London

Parish council

Community council

Welsh Authority

Non-Departmental Public Body (NDPB)

Planner

Professional trade association

Land owner

Housing association/RSL

Private developer/house builder

Developer association

Voluntary sector/charity

Community Land Trust

Rural housing enabler

Other

(please comment):

AGMA represents the 10 Local Authorities within Greater Manchester.

iv) What is your main area of expertise or interest in this work (please tick one box)?

Chief Executive

Planner

Developer

Surveyor

Member of professional or trade association

Councillor

Housing provision

Planning policy/implementation

Environmental protection

Other

(please comment):

v) Do your views/experiences mainly relate to one or more specific regions within England and Wales, to one or both countries?

South West

South East

East

East Midlands

West Midlands

North West

Yorkshire & Humberside

North East

London

All of England

Wales

Other

(please comment):

Specific local area (please comment):

Would you be happy for us to contact you again in relation to this questionnaire?

Yes No

Please refer to the relevant parts of the consultation document for narrative relating to each question.

Chapter 1: Neighbourhood funds

Question 1:

Should the duty to pass on a meaningful proportion of levy receipts only apply where there is a parish or community council for the area where those receipts were raised?

Yes No

Comments

Local authorities in Greater Manchester require the flexibility to develop bespoke approaches to infrastructure planning and delivering local priorities. We therefore agree that the mandatory duty should only apply where there is a locally elected body in the form of a parish or community council for the area where receipts have been raised. It would be inappropriate for regulations to place a mandatory duty on charging authorities to pass a proportion of funds to unspecified bodies. We also propose that the duty should only apply where a specific need has been identified in the statutory Local Plan, the infrastructure plan associated with either the Core Strategy, another Development Plan Document or Neighbourhood Development Plan. Whilst authorities that do not have parish or community councils are likely to have neighbourhood forum structures at a sub-authority level, the function and constitution of these will necessarily vary. Similarly, they may not necessarily be appropriate vehicles for CIL revenue to be managed and spent in a democratic and transparent way. Imposing a mandatory duty on all authorities would therefore be inappropriate. There is also a more fundamental issue to be raised that whilst the general principle of communities being able to be involved in setting priorities is supported, the use of CIL apportionment as a tool to promote this, will create spatial inequalities across a local authority because: (1) the areas where development viability makes CIL a possibility may not necessarily be the areas which have the greatest infrastructure need, (2) the geographical coverage of Parish Councils and Community Councils is not universal within a districts administrative boundary and (3) the level of receipts received in defined areas may not be significant. As major drivers of growth, cities have a crucial role to play but at the same time have ther own unique challenges. Within Greater Manchester, the areas that are the focus for the greatest development also require additional infrastructure investment and may be the areas where viability is more marginal. An adhoc approach which directs more funding to be targeted towards areas based largely on their already being the most profitable areas for developers would not be the most efficient approach in terms of integrated infrastructure investment. A flexible approach is required to enable any funds raised through CIL to be used

for strategic / cross boundary or local infrastructure depending on what will bring the greatest overall benefit for growth.

Question 2:

Do you agree that, for areas not covered by a parish or community council, statutory guidance should set out that charging authorities should engage with their residents and businesses in determining how to spend a meaningful proportion of the funds?

Yes No

Comments

As outlined in question one - it would be inappropriate and undemocratic for regulations to place a mandatory duty on charging authorities to pass a proportion of funds to unspecified bodes.

The individual districts in Greater Manchester have established neighbourhood management structures, represented by a community committee, Parish Councils, Town Councils or area partnerships which provide a forum for local residents to get involved in decision making. They also lead on the development of community priorities through the production of Community Action Plans, and in some districts have responsibility for devolved budgets. The neighbourhood management structure therefore presents an existing model which individual districts could utilise as a mechanism for informing priorities for neighbourhood funds raised via CIL revenues.

We recognise the intention of Government in giving communities that accept new development the opportunity to decide how the demands placed on their area are best addressed, and therefore fully support the principle that charging authorities be expected to engage with their residents and businesses to determine how a proportion of the funds raised via CIL should be spent. We do however consider it essential that authorities are afforded discretion as to how this is achieved within their area, recognising the different approaches to neighbourhood working within authorities and integration with the Local Plan.

The ability to set a levy will be informed by the infrastructure needs as identified within the Infrastructure Delivery Plan (IDP) produced alongside Local Plans. The Local Plan and IDP will have been subject to extensive consultation with stakeholders and adopted following independent examination, which takes further account of representations made by consultees. The IDP and the policies within the Local Plan will inform the priorities for infrastructure delivery and should form the starting point for the use of CIL receipts. Whilst ongoing partnership working and co-operation, involving for example the LEP, utility

companies and other stakeholders will be required, the whole process of producing the documents required to underpin CIL should mean that extensive consultation identifying needs and priorities has already been undertaken.

If guidance is to be provided on how a charging authority should engage with local communities, this needs to remain as guidance, rather than regulation. The situation should be avoided where a disproportionately large amount of council revenue is being spent on consultation compared with the amount spent on infrastructure from potentially limited funds raised through the levy. There is also a risk that in addition to consultation fatique, local expectations as to what could be funded by the levy (in some areas very little) may be unrealistically raised through such consultation.

Question 3:

What proportion of receipts should be passed to parish or community councils?

Comments

The key purpose of the Community Infrastructure Levy is to fund the infrastructure necessary to support and enable growth. The justification for introducing the Levy is evidence that there is a funding gap and that additional growth places additional burdens on infrastructure.

On the basis of infrastructure planning work published by those authorities that have published draft CIL charging schedules, we understand that the scale of the infrastructure funding gap considerably exceeds the revenue that is projected to be raised via CIL. In this context, it is clear that the charging authority must retain a significant component of the CIL revenue to support the delivery of necessary infrastructure and that any cut in CIL receipts represents a cut from a small fund used to fund significant infrastructure funding gaps.

In our response to the National Planning Policy Framework (NPPF) we highlighted three important points:

(1) The incentives system seeks to ‘incentivise’ communities to ‘accept‘ development – this is not the case in Greater Manchester. We require a framework which allows us to incentivise development by continuing to work with partners to maximise the economic impact of development; by planning pro-actively for infrastructure and delivering it in a timely way;

(2) There has been a tendency in the past, both by Government and other organisations, to produce overly prescriptive guidance and regulation which has been inflexible and unable to adapt to particular local circumstances. Likewise the metropolitan areas and cities in particular, require flexibility and bespoke requirements and

(3) The incentive system is designed to manage development pressures in London and the South East. There is a real danger that approaches developed to reduce what are seen to be constraints to growth in the South East are uniformly applied across the rest of the country. This is a flawed analysis. Incentivising development in cities is also essential, not only to achieve the Government's objectives of re-balancing the economy but also ensuring cities achieve their full potential.

CIL as currently constructed disadvantages post industrial urban areas like Greater Manchester, where a meaningful percentage of new residential development occurs through the ‘change of use’ of non-residential buildings. The consequences of this is that development may result in no net additional floor spaces yet place additional pressure on community infrastructure through the intensification of use. An unintended consequence of this approach would be to disincentivise areas that seek to bring empty building back into use whilst

incentivising greenfield developments as the net increase in floor space would be 100%.

Furthermore, we would welcome recognition of the potential for 'recycling' funds for infrastructure through the Growing Places Fund via CIL. The current regulations (Reg 60), prohibits Charging Authorities from forward funding infrastructure by borrowing against future CIL receipts. As the Government are aware, AGMA is developing its investment strategy based upon utilising limited public sector funding and pension fund investments in order that returns can be reinvested into future projects. In this context the CIL regulations need to consider where future funding could come from and how this can be most effectively utilised.

The Chancellor, in his Autumn Statement, raised the possibility of relaxing this rule. The National Infrastructure Plan also refers specifically to this possibility but only for the Northern Line Extension to Battersea and for elected mayors.

We therefore suggest that in common with the 'city deals' discussions local authorities in Greater Manchester should be allowed the flexibility to decide how RGF and Growing Places funds can be utilised alongside CIL and also how they spend funds and engage with their own communities without overly complex prescription.

The National Infrastructure Plan (2011) highlighted the issue that too many projects have been blocked or delayed due to poor coordination, planning and regulatory hold ups. The importance of integrating infrastructure planning with local priorities, housing and investment was also highlighted. To ensure efficiency through integration, recognition of interdependence (between different infrastructure types e.g. energy and transport) and maximising the scale of impact etc. Therefore we consider that the proportion of receipts passed to parish or community councils should be determined on a district by district basis, with local variations depending on:

(1) Whether the district is a unitary or county authority,

(2) the level of development taking place within a specific neighbourhood,

(3) infrastructure gaps and need,

(4) spatial distribution of development and strategic growth priorities and

(5) variations in viability across geographical areas.

The draft regulations state that Parish and Community Councils should not be confined to spending in accordance with the charging authorities list or have to produce a list. This may lead to poor coordination, planning and the range of issues highlighted by the NIP. To ensure transparency and efficiency the same process of evidenced justification should apply to the parish or community councils, this could take the form of neighbourhood areas choosing from the Regulation 123 list of infrastructure or the infrastructure requirements in the Neighbourhood Plan. In this way neighbourhoods are free to choose but in doing so would also help to integrate with the infrastructure requirements identified by the Local Plan / Infrastructure Investment Plan.

Question 4:

At what level should the cap be set, per council tax dwelling?

Comments

We understand that this cap would only apply in those authorities where parish or community councils exist. As highlighted above, this approach appears to originate in rural areas with dispersed settlements and it is unclear how this approach will apply to cities and large metropolitan areas.

Question 5:

Do you agree that the proposed reporting requirements on parish or community councils strike the right balance between transparency and administrative burden?

Yes No

Comments

In the absence of further detail it is unclear from the consultation whether the proposed requirements strike the right balance between transparency and ad-ministrative burdens. As outlined in question 7, it is proposed that Parish Councils and Community Councils should have unfettered use of neighbourhood funds. If this is implemented, then to ensure probity, transparency and accountability the Parish or Community Council should be required to audit and report on the level of funding received, how this has been spent and when. The headline messages can then be outlined in the AMR.

Question 6:

Draft regulation 19 (new regulation 62A(3)(a)) requires that the report is to be published on the councils website, however we recognise that not all parish or community councils will have a website and we would welcome views on appropriate alternatives.

Comments

We have no specific views on this matter but it is common for specific neighbourhood forum web pages to be hosted within Local Authority web pages.

Question 7:

Do you agree with our proposals to exclude parish or community councils’ expenditure from limiting the matters that may be funded through planning obligations?

Yes No

Comments

It is unclear how the intended approach will work in practice and there is a risk that the intended approach may lead to an inefficient process, duplication and double counting of infrastructure provision. It is essential that there is a transparent and co-ordinated aproach to maximise the use of public / private sector investment to ensure that maximum outcomes are achieved. In practive this will require the complementary use of S106 and CIL. As outlined in our respose to question 3: "To ensure transparency and efficiency the same process of evidenced justification should apply to the parish or community councils, this could take the form of neighbourhood areas choosing from the Regulation 123 list of infrastructure or the infrastructure requirements in the Neighbourhood Plan. In this way neighbourhoods are free to choose but in doing so would also help to integrate with the infrastructure requirements identified by the Local Plan".

Question 8:

Do you agree with our proposals to remove the cap on the amount of levy funding that charging authorities may apply to administrative expenses?

Yes No

Comments

We welcome this proposal as it would allow authorities greater flexibility, particularly with regard to supporting any additional administrative costs associated with the requirement to engage residents and businesses to inform the spending priorities for a meaningful proportion of CIL revenue. It should be acknowledged that in urban areas the cost of consultations could be disproportionately high and the money used for this purpose would be taken from that available to fund the infrastructure needs, possibly highlighted through the consultation. If such consultation is introduced as a requirement, the proposal to remove the cap would in practice just further reduce the amount to be spent on infrastructure needed in support of growth.

Chapter 2: Affordable housing

Question 9:

Do you consider that local authorities should be given the choice to be able if they wish to use levy receipts for affordable housing?

Yes No

Comments

Housing including affordable is essential for growth and society. We therefore support the proposal to allow local authorities flexibility to use both CIL revenue and planning obligations to deliver affordable housing. Flexibility will also be required to utilise CIL or s106 for different types of affordable housing e.g. affordable rent and affordable home ownership.

We envisage that a hybrid approach would apply in practice with authorities continuing to use the s106 planning obligation mechanism as the primary means of securing affordable housing (in terms of on-site provision), this may also include a clearly defined geography in a local authorities area with affordable housing from CIL utilised in some locations and affordable housing from s106 used in other areas or identified sites. This way developers clearly know in advance which regime applies and where. Authorities would then have discretion over whether to direct some of the CIL revenue towards a funding pot for affordable housing, where they considered that affordable housing was a particular local priority and insufficient supply was being delivered via the s106 mechanism.

It is therefore critical that local authorities should have greater flexibility through allowing affordable housing to be considered alongside other types of infrastructure required, and to be prioritised accordingly by the charging authority.

The ability to use both methods would ensure maximum flexibility is available to raise funds either for on site affordable housing provision or towards a pooled contribution towards off-site provision, depending on the circumstances of an individual development such as its location and size. The use of the Community Infrastructure Levy would in theory be a simpler means of collecting receipts.

However, the balance between the use of s106 and CIL would require local discretion as the ability to use both the levy and planning obligations might also have the effect of reducing the number of s106 agreements, particularly on smaller schemes, with subsequent efficiencies for the local authority and the development industry.

The other benefit of using both methods is the potential for future proofing the amount that can be collected. In setting the tariff levels a balance has to be struck between funding the infrastructure needs of the area and ensuring that development is not discouraged. It may be the case that for certain types of development or for certain areas, a nil tariff is set due to the low levels of viability that exist at the time that the viability work is undertaken. The length of time it takes to change the tariff will prevent an authority from amending tariff levels in line with fluctuations in the market. If, however, a local authority is allowed to choose between the use of either Planning Obligations or CIL to fund affordable housing, uplift in current market conditions could be used to justify entering into a Section 106 Agreement where a nil tariff might have previously been set.

Question 10:

Do you consider that local authorities should be given the choice to be able if they wish to use both the levy and planning obligations to deliver local affordable housing priorities?

Yes No

Comments

As per question 9.

Question 11:

If local authorities are to be permitted to use both instruments, what should they be required to do to ensure that the choices being made are transparent and fair?

Comments

One of the key advantages of CIL is that it provides authorities with greater flexibility in terms of how revenue may be spent. Unlike s106 planning obligations where there exist limitations whereby the obligation must be necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind to the development, there is considerably greater flexibility in how CIL revenue may be spent.

The regulation 123 list approach currently provides for significant flexibility, recognising that funding priorities will necessarily change over time. Authorities can therefore regularly update the list of infrastructure projects that will be funded via CIL revenue through the regulation 123 list.

Given the significant flexibility currently provided by the regulation 123 list approach, it is not clear why affordable housing should be treated differently from other types of infrastructure. If local authorities are to be able to use both they need to be able to provide transparency. To ensure efficiency, flexibility and to accelerate development it is recommended that this could be achieved by setting the criteria for when a planning obligation would be sought within a Supplementary Planning Document or as suggested by the draft NPPF an informal infrastructure and investment plan. The criteria might include the size of a development i.e. number of units and identify geographical areas where Section 106 agreements would be sought. This is because the ability to use both the levy and planning obligations might also have the effect of reducing the number of S106 agreements, particularly on smaller schemes, with subsequent cost savings to both the Council and development industry.

Question 12:

If the levy can be used for affordable housing, should affordable housing be excluded from the regulation that limits pooling of planning obligations, or should the same limits apply?

Yes No

Comments

Yes affordable housing should be excluded from the regulation that limits pooling of planning obligations and therefore no the same limits not apply. If the objective is to create a reformed and business friendly planning system and an increase in the number and range of affordable housing, then Local Authorities require fliexibility to deliver. As outlined in our response to question 11. If local authorities are to be able to use both they need to be able to provide transparency and clarity to the development industry. This could be achieved by setting the criteria for when a planning obligation would be sought within a Supplementary Planning Document, which could be updated on an annual basis alongside the Regulation 123 list. We consider it essential that where the levy can be used for affordable housing, that affordable housing be excluded from regulation 123 which limits the pooling of planning obligations. If affordable housing was not excluded in this way, it would function as a major limitation on the use of s106 as a mechanism for securing affordable housing delivery. To avoid undue complexity Local Planning Authorities should have the maximum flexibility to determine the most appropriate mechanism given local priorities, development aspirations and market conditions. If local authorities are to be given the flexibility to decide which approach is more locally appropriate then it would seem unnecessarily restrictive and somewhat arbitrary to impose a limit of five on the number of obligations from which money can be pooled. A pooled fund would need to contain sufficient money to be able to bring forward a site for development, achieving economies of scale, and this would be reached dependent upon the sum of money collected not the number of individual contributions.

Chapter 3: Mayoral Development Corporations

Question 13:

Do the proposed changes represent fair operation of the levy in Mayoral Development Corporation areas?

Yes No

Comments

Not applicable.

Community Infrastructure Levy further reforms

Consultation questions response form We are seeking your views to the following questions on the proposals to amend the Community Infrastructure Levy Regulations 2010 (as amended).

How to respond: The closing date for responses is 28 May 2013 This response form is saved separately on the DCLG website. Responses should be sent preferably by email: Email response to cil@communities.gsi.gov.uk Written response to: CIL Team Department for Communities and Local Government Zone 1/H6 Eland House Bressenden Place London SW1E 5DU About you

i) Your details:

Name:

Chris Findley

Position:

Lead Planner – Association of Greater Manchester Authorities / Greater Manchester Combined Authority

Name of organisation (if applicable):

Association of Greater Manchester Authorities / Greater Manchester Combined Authority

Address:

c/o Greater Manchester Planning and Housing Team New Economy Churchgate House 56 Oxford Street Manchester M1 6EU

Email: chris.findley@salford.gov.uk

Telephone number: 0161 793 3654

ii) Are the views expressed on this consultation an official response from the organisation you represent or your own personal views?

Organisational response

Personal views

iii) Please tick the box which best describes you or your organisation:

District Council

Metropolitan district council

London borough council

Unitary authority/county council/county borough council

Parish council

Community council

Non-Departmental Public Body (NDPB)

Planner

Professional trade association

Land owner

Private developer/house builder

Developer association

Voluntary sector/charity

Other

(please comment): The Association of Greater Manchester Authorities / Greater Manchester Combined Authority represents the ten Greater Manchester metropolitan districts of Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan.

iv) What is your main area of expertise or interest in this work (please tick one box)?

Chief Executive

Planner

Developer

Surveyor

Member of professional or trade association

Councillor

Planning policy/implementation

Environmental protection

Other

(please comment):

Would you be happy for us to contact you again in relation to this questionnaire?

Yes No

v) Questions

The Greater Manchester response is limited to Questions 6, 7, 15 and 21 of the consultation document. Individual Greater Manchester districts may be submitting responses in relation to other questions separately.

Question 6 - We are proposing to move the date from when further limitations on the use of pooled planning obligations will apply (to areas that have not adopted the levy) from April 2014 to April 2015.

Do you agree?

Yes No Comments

The proposed changes create additional challenges for Local Planning Authorities. Therefore Greater Manchester strongly supports the proposal to extend the date from when further limitations on the use of pooled planning obligations will apply, to April 2015. Within Greater Manchester, only two of the ten authorities have published preliminary draft charging schedules to date. Bolton Council and Trafford Council have published draft charging schedules for formal consultation and subject to independent examination anticipate that they will adopt their respective charging schedules by early 2014. The other Greater Manchester authorities are at an earlier stage in the preparation of CIL charging schedules, and will not be in a position to have adopted charging schedules in place before April 2014. The pooling restrictions which are due to come into effect on this date could therefore raise significant challenges for these authorities, who would not be in a position to raise funding towards infrastructure via CIL by the point at which the restrictions come into effect. Amending the regulations to move this date to April 2015 would therefore provide authorities with more time to progress the preparation of CIL charging schedules, and thereby offset the impact of the pooling restrictions in terms of the ability of those authorities without a CIL charging schedule in place to raise funding to deliver the infrastructure necessary to support growth.

Question 7 - Do you agree that regulation 123 (excluding regulation 123(3)) should be extended to include section 278 agreements so that they cannot be used to fund infrastructure for which the levy is earmarked?

Yes No

Comments

Whilst supporting simplification and clarification of the existing system - we are unable to support the proposal to extend regulation 123 to include S278 agreements until further detail has been provided on how this will work in practice and consideration of any unintended consequences and creation of additional complexity and uncertainty.

The agreements under the Highways Act are made between the relevant highway authority and a developer to ensure delivery of necessary highways works in relation to a development. In Greater Manchester the Combined Authority has the power to enter into agreements under S278 of the Highways Act 1980 to obtain third party funding for the installation, maintenance and operating costs of signal controlled junctions and crossings.

As outlined in our response to question 6, it is anticipated that by early 2014 only two planning authorities will have charging schedules in place. Merging the 278 agreements with the CIL at this point in time will potentially create more complexity and uncertainty as the development industry in the conurbation will have to negotiate with the Combined Authority in some locations and both the Combined Authority and Local Planning Authority in other locations to ensure that the necessary works are undertaken.

Question 15 - Should we change the regulations to remove the vacancy test, meaning the levy would generally only be payable on any increases in floorspace in refurbishment and redevelopment schemes, provided that the use of the buildings on site had not been abandoned?

Yes No

Comments

In our response to previous consultations we have raised a number of issues relating to the Levy as it is currently constructed, these can be summarised as four main points: (1) The incentives system seeks to ‘incentivise’ communities in the south east to ‘accept‘ development – this is not the case in Greater Manchester. Metropolitan areas and cities in particular, require flexibility and bespoke requirements. Our starting point is to identify our strategic priorities for growing the economy and then to develop a pipeline of projects that will deliver against these priorities, aligning the funds that are available to enable them to be delivered. We therefore require a framework which allows us to incentivise development by continuing to work with partners to maximise the economic impact of development; by planning proactively for infrastructure and delivering it in a timely way. (2) There has been a tendency in the past, both by Government and other organisations, to ‘micro-manage from the centre’ by producing overly prescriptive guidance and regulation which has been inflexible and unable to adapt to particular local circumstances.

(3) CIL as currently constructed disadvantages post industrial urban areas like Greater Manchester, where a meaningful percentage of new residential development occurs through the ‘change of use’ of non-residential buildings. The consequences of this is that development may result in no net additional floor spaces yet place additional pressure on community infrastructure through the intensification of use. An unintended consequence of this approach would be to disincentivise areas that seek to bring empty building back into use whilst incentivising greenfield developments as the net increase in floor space would be 100%. (4) The latest consultation deals with CIL in isolation and we would welcome recognition of the potential for 'recycling' CIL funds for infrastructure. The current regulations (Reg 60), prohibits Charging Authorities from forward funding infrastructure by borrowing against future CIL receipts. As the Government are aware, Greater Manchester is developing its investment strategy based upon utilising limited public sector funding and pension fund investments in order that returns can be reinvested into future projects. In this context the CIL regulations need to factor in different models of governance that exist in addition to the London Mayor.

Question 21 - Should we introduce a relief from the payment of the levy for self-build homes for individuals as set out above?

Yes No Comments

A relief already exists for social housing in accordance with state aid rules. It is unclear from the consultation whether extending relief to other forms of development would meet European requirements that: “housing must be for those people whose needs are not met by the market - disadvantaged citizens or socially less advantaged groups, who due to solvency constraints are unable to obtain housing at market conditions”. The approach would also add additional complexity concerning monitoring and enforcement which could otherwise be addressed (and as proposed) by providing a differential scale for types of new housing being built.