Consultation on the Preliminary Draft CIL Charging Schedule

Consultation on the Preliminary Draft CIL Charging Schedule

Borough of Poole Community Infrastructure Levy (CIL)

Consultation on the Preliminary Draft CIL Charging Schedule


1.1The purpose of this document is to set out Borough of Poole’s Preliminary Draft Charging Schedule for the Community Infrastructure Levy (CIL).

1.2Part 11 of the Planning Act 2008 introduced powers for Local Authorities to introduce the Community Infrastructure Levy in their areas. The Community Infrastructure Levy Regulations 2010 (“the regulations”) came into force on the 6th May 2010 and set out how CIL is to be introduced into an area. Amendment Regulations came into force in May 2011. This consultation document is issued by Borough of Poole as the first step in setting a Community Infrastructure Levy (CIL) for Poole.

1.3The Community Infrastructure Levy is a new locally set charge on development that authorities can choose to introduce to help fund infrastructure that is needed to accommodate development in their area. CIL is intended to supplement other public sector revenue streams required to deliver infrastructure to support growth in the Borough.

1.4The CIL charge takes the form of a tariff per square metre of net additional floorspace above 100 square metres (unless creating a new dwelling) and will be paid by most new development in the Borough. In effect, CIL is applicable for development that involves new buildings into which people normally go.

1.5The CIL Regulations (as amended) confirm that the following development is exempt from CIL:

a)Affordable Housing;

b)Development by charities;

c)Development less than 100 sq.m which does not involve the creation of a new dwelling;

d)Changes of use that do not involve an increase in floorspace;

e)Development involving the creation of buildings into which people do not normally go (this includes buildings which people go in to inspect or maintaining fixed plant or machinery).

1.6Liability to pay CIL for qualifying development will be assumed at the time planning permission is granted and paid at the commencement of development. Payment of CIL for larger amounts can be in instalments over fixed time periods.

The process of introducing CIL in Poole

1.7The CIL Regulations require the amount of CIL to be paid (to be given in £ per square metre of development) to be set out in a formal document called a Charging Schedule. The Charging Schedule will set out the rates which apply to the different types of development and, where applicable, location in the Borough. The Charging Schedule also must include an explanation of the method used to work out how much CIL is to be paid for liable development.

1.8The Charging Schedule must be formulated using appropriate available evidence on both an area’s infrastructure need and the impact of CIL on economic viability (taken as a whole) in that area. Therefore, the Preliminary Draft Charging Schedule contained within this consultation document has been informed by:

  • The Borough of Poole Core Strategy - The Borough of PooleCore Strategy sets out the town’s spatial plan for the period 2006 to 2026; this includes housing and employment development targets. The Council is scheduled to submit a Site Specific Allocations and Development Management Policies and Delivering Poole’s Infrastructure Development Plan Documents for Examination in Public in Summer 2011. Once adopted, the two emerging DPDs will complement the Core Strategy and comprise the development plan for the Borough to which the Charging Schedule will relate.
  • The Poole Infrastructure Delivery Plan (IDP) – The Poole IDP sets out the amount and cost of infrastructure required to support growth targets set out in the Poole Core Strategy;
  • CIL Economic Viability Assessment - BNP Paribas Real Estate have been appointed to undertake comprehensive viability analysis and testing of a range of potential CIL rates. The CIL Regulations 2010 and Government guidance says that the levy charge should not be set so high as to stifle development (taken as a whole), nor should it be set so low that insufficient funds are available for infrastructure.

1.9The Regulations require that the Council has to carry out two rounds of public consultation on the proposed Charging Schedule before having it examined in public by an independent person (“independent examiner”). The statutory process for introducing CIL (including the Council’s scheduled timing of each stage) is set out as follows:

Stage / Description / Date
  1. Consultation on the Preliminary Draft Charging Schedule.
/ The Preliminary Draft CIL Charging Schedule will contain the draft CIL rates proposed to be introduced having been formulated using the appropriate available evidence. This document comprises Stage 1 of the CIL process. / July/
2011 – 6 weeks
  1. Consultation on Draft Charging Schedule
/ Having considered the comments made on the Preliminary Draft, the Council must then consult on the Draft Charging Schedule for a period of at least four weeks. Any person or organisation that makes comments at this stage will have the right to be heard at the CIL public examination. / September/October 2011 – 4 weeks
  1. Examination in Public
/ Following consultation at Stage 2, the Charging Schedule is subject to examination by an independent examiner. This will be a public hearing to ensure that the Council has complied with part 11 of the Planning Act 2008 and the CIL Regulations (as amended) as well as being supported by appropriate available evidence. / Winter 2011/2012
  1. Full Council to agree its adoption
/ The independent examiner’s recommendations are to be incorporated by the Council. Following this, Full Council must then vote to approve the CIL Charging Schedule. / Spring 2012
  1. Adoption
/ The Charging Schedule is published on the Borough of Poole website and made available for inspection. The CIL Charging Schedule then takes effect on the day specified in the Charging Schedule but not before the date of publication. / Spring/
Summer 2012

1.10This consultation documentationrelates to Stage 1 above and includes the background to the Poole CIL, an overview of the methodology used to derive the rates contained within the Preliminary Draft Charging Schedule as well as the proposed Preliminary Draft Charging Schedule itself.

The Rationale for Introducing CIL

1.11The Community Infrastructure Levy provides the opportunity for the Council to ensure most new development coming forward can make a proportionate and reasonable contribution towards delivering the infrastructure required to support growth. CIL is also now the appropriate mechanism from which the cumulative impact of development can reasonably be mitigated on the basis that CIL can be spent on any identified infrastructure need (compared to Section 106 provisions which require by law there to be a direct link to any given development and infrastructure project).

1.12CIL is also a mechanism which can be used to supplement other funding streams required to deliver strategic infrastructure over a plan period. Therefore a key benefit of CIL is that it can raise finance to deliver infrastructure required to support growth, which in turn creates an environment that will encourage development to come forward to help create a sustainable town. The advantages of CIL can be summarised as follows:

  • CIL will be a standard, fixed charge which will aid transparency for the development industry;
  • It is non-negotiable so will speed up the process over Section 106 provisions, which can be time consuming in both negotiations and procedure;
  • It can be used to secure additional funding streams and therefore enable timely infrastructure delivery across an area;
  • A proportion of CIL will in the future be passed back to local communities to benefit from development in their areas;
  • Legislation removes the use of Section tariffs from 2014 and already limits the use of Section 106 to only site specific infrastructure. Therefore, CIL is the only mechanism for local authorities to secure money towards mitigating the cumulative impact of development by providing strategic infrastructure.

The use of Section 106 of the Town and Country Planning Act 1990 following adoption of CIL

1.13The Council currently seeks pooled contributions, secured through Section 106 provisions, through the following guidance:

  • South East Dorset Transport Contributions Scheme SPG;
  • Open Space and Recreation SPG;
  • Interim Planning Framework for Heathlands

1.14Once the CIL charging schedule is adopted, or no later than 6th April 2014 where none is adopted, the scope for pooling contributions through Section 106 is dramatically reduced, becoming restricted to contributions from no more than five developments for each infrastructure project.

1.15While CIL will therefore replace section 106 agreements in many cases, S106 will still be used to secure local infrastructure requirements on development sites (which are necessary to enable the grant of planning permission), such as access enhancements, on-site open space, connection to services and some off site requirements directly related to support individual sites.

1.16The Council will ensure that development is not charged twice for the same piece of infrastructure through collecting both a planning obligation through Section 106 and a CIL payment by listing on its website infrastructure which will benefit from levy finance.

1.17Change of use applications not involving an increase in floorspace will be required to make contributions towards any necessary site-related infrastructure requirements through Section 106 arrangements.

Question 1

Do you have any general comments about the consultation document and the approach taken to bringing CIL forward in Poole?

(Please use this box to provide your response, suggest what revisions need to be made and supply any additional evidence or information to support your point of view on this issue)

Relieffrom CIL

1.18The CIL Regulations make a number of provisions for charging authorities to give relief from the levy. Further information on CIL Relief is set out in the DCLG guidance document ‘Community Infrastructure Levy Relief: Information Document (DCLG, 2011).’In this guidance document, DCLG state that “Community Infrastructure Levy Relief means any exemption or reduction in liability to pay the levy.” In each case it can only be granted in respect of the chargeable development. The types of mandatory and discretionary CIL relief are discussed as follows:

Mandatory Relief

1.19Mandatory relief from CIL is granted to development by charitable institutions (to be used for charitable purposes) and social housing (i.e. affordable housing) that qualify in line with the definitions set out in the CIL Regulations 2010. Therefore, to be clear affordable housing will be exempt from paying CIL, and any infrastructure obligations which may be required to enable the grant of planning permission for affordable schemes will be secured through Section 106 provisions where necessary.

Discretionary Relief

1.20Discretionary relief is available for charitable investment relief. To be considered for relief, the whole or greater part of the chargeable development must be held as an investment from which the profits will be applied for charitable purposes.

Question 2

Do you consider that the Council should make discretionary relief available for charitable investment relief?

(Please use this box to provide your response, suggest what revisions need to be made and supply any additional evidence or information to support your point of view on this issue)

1.21Discretionary relief is also available, in specific circumstances, for development which can demonstrate exceptional circumstances (as defined in CIL Regulation 55). Exceptional circumstances relief can only be given where the following eligibility criteria are fulfilled:

a)Where the charging authority (which in this case would be the Borough of Poole) has made exceptional circumstances available in its area;

b)The claimant owns a material interest in the land;

c)A Section 106 Planning Obligation has been entered into in respect of the planning permission which permits the chargeable development; and

d)The charging authority considers that:

  • The cost of complying with the Section 106 agreement is greater than the charge from the levy payable on the chargeable development;
  • Requiring payment of the charge would have an unacceptable impact on the economic viability of the chargeable development; and
  • Granting relief would not constitute a notifiable state aid.

1.22Due to current market conditions, the Borough of Poole proposed to make available discretionary relief for Exceptional Circumstances; whether to continue with making exceptional circumstances relief available will be reviewed on an annual basis.

1.23Please note that, as confirmed above, exceptional circumstances relief can only be considered where a Section 106 Planning Obligation has been entered into which, combined with CIL, detrimentally affects the viability of a development. Therefore it is important to note that as most schemes following the adoption of CIL will not require onerous Section 106 planning obligations, and the fact that CIL is intended to be a standard, non-negotiable charge,most developments will not be eligible for exceptional circumstances relief. Therefore, whilst it will be made available, its application by the Council will only be considered in demonstrably exceptional circumstances which accord with the eligibility criteria above.

Question 3

Do you agree or disagree with the Council making relief available for exceptional circumstances in the Borough?

(Please use this box to provide your response, suggest what revisions need to be made and supply any additional evidence or information to support your point of view on this issue)

2.0Evidence Base for the Preliminary Draft Charging Schedule

2.1The Preliminary Draft Charging Schedule has been formulated looking at both the infrastructure required to support growth in the Borough as well as the impact of CIL on the economic viability of development in the area. This approach is consistent with CIL Regulation 14 which requires the charging authority to strike what appears to be the 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.

Setting CIL in Poole

2.2The level of the tariff is set by the local authority based on the needs identified in its infrastructure plan, but also tested to ensure that it will not affect the viability of development in its area (taken as a whole). To assist with this the Council has a produced an Infrastructure Delivery Plan (summarised below) and appointed BNP Paribas Real Estate to undertake a comprehensive viability assessment of the Borough looking at both commercial and residential development. These matters are discussed in turn as follows:

The Infrastructure Delivery Plan – defining the cost of delivering Poole’s infrastructure

2.3The Poole Core Strategy (adopted February 2009) sets out an ambitious growth strategy for the town which will provide 10,000 new homes (of which 2,500 have already been provided) and 13,700 new jobs by 2026. The scale of change envisaged will bring with a need to upgrade existing and provide new infrastructure to accommodate growth as it is brought forward.

2.4The Core Strategy sets out a spatial strategy for the town which will see a significantproportion of the overall growth delivered in an around its town centre by 2026. The spatial strategy's approach for Poole is summarised as follows:

Housing Delivery, in hierarchies of density, will be located:

  • The Town Centre - 4,000 dwellings;
  • Major Local Centres and key hubs of transport and community activity on Prime
  • Transport Corridors - 3,500 dwellings;
  • Rest of Borough where flats predominate - 2,500 dwellings.

Employment Delivery:

  • The Regeneration Area: a minimum of a net addition of 4,000 jobs mainly through
  • provision of 36,000 square metres of employment floorspace and a mix of leisure related commercial activities;
  • Town Centre North and other Town Centre Sites: A minimum of 2,400 jobs through
  • the provision of 35,000 square metres of new retail and leisure floorspace;
  • Existing employment areas, including the Port of Poole: a minimum of 2,100 jobs
  • through development of available sites;
  • Land at Fleets Corner: a minimum net addition of 1,300 jobs through rationalisation
  • of the site to deliver employment opportunities;
  • Sopers Lane: a minimum of a net addition of 1,000 jobs through rationalisation of the
  • site to deliver employment opportunities;
  • Health, Care and Education; a minimum net addition of 2,500 jobs in hospitals, further education, skills development, care homes and health facilities.

2.5A Poole Infrastructure Delivery Plan has been produced which sets out the items of infrastructure critical required to accommodate the Core Strategy growth aspirations. The infrastructure identified in the IDP provides the context for how much the required infrastructure is expected to cost and is the first part of setting a CIL to help meet any funding gaps identified.

2.6The IDP looks at transport, Green Infrastructure, built recreation facilities, education, flood defences, public realm enhancements, utilities, Heathland and Poole Harbour SPA protection amongst other things. It has been subject to consultation with the relevant infrastructure providers. The IDP has been developed in unison with the Delivering Poole’s Infrastructure DPD and was published for the first time in April 2011. The IDP will be reviewed on annual basis and updated as necessary going forward.

2.7The focus of the IDP is to identify the critical infrastructure required to deliver the Core Strategy spatial plan. The IDP outlines broadly how much the projects are expected to cost, any funding secured, the timescales for delivery and any funding gaps. The IDP will be an integral part of the Council directing CIL finance towards meeting any funding gaps identified in the IDP.

2.8Table 1 provides a summary of the list of the infrastructure projects required to support growth which could benefit from CIL funding in the future. In line with CIL Regulation 14, identification of the Borough’s infrastructure need is the first part in setting CIL rates in Poole. Table 1 identifies where external funding has been secured for projects and calculates thereafter what is outstanding. Where a gap is identified, it is expected that finance collected through CIL will be used in whole or in part (in combination with other funding sources) to meet this gap as far as possible. The Council will continue to explore all possible other funding opportunities to provide the infrastructure required to support growth in the Borough.

2.9The regulations stipulate that finance raised through CIL can be spent flexibly on any identified infrastructure item and therefore the precise amount of CIL attributed to each project will not be known at this time and will be used in conjunction with other funding sources where available to help bring forward infrastructure in a timely fashion in line with growth.