Memorandum submitted by Royal Institution of Chartered Surveyors (PB 34)
RICS supports the amendments tabled by RTPI and in addition to those would like to put forward the following. Special attention should be paid to Part 10, Community Infrastructure Levy because irrespective of the way it will be delivered, Chartered Surveyors will play a pivotal role in the implementation of CIL.
PART 1 - THE INFASTRUCTURE PLANNING COMMISSION
RICS has concerns about the independence and expertise of the IPC these areas need to be clarified in the regulations.
RICS also has concerns about the interaction with devolved assemblies who need to be listed as statutory consultees. It is essential that the relationship between the IPC and the devolved planning inspectorates (particularly in Scotland) is addressed at Committee Stage or via regulation.
PART 2 - NATIONAL POLICY STATEMENTS
- Clause 5 (3) add: Before designating a statement of national policy statement for the purposes of this Act the Secretary of State must carry out an appraisal of the sustainability of the policy set out in the statement contained in an overarching national infrastructure policy framework tying together the national policy statements and creating a strategic framework for sustainable development and any cross national issue
- Clause 6 (1): The Secretary of State must as a matter of discipline undertake annual monitoring reports to ensure fitness for purpose of the NPS
PART 3 - NATIONALLY SIGNIFICANT INFRASTRUCTURE PROJECTS
- Clause 13 (1) add (n) development relating to flood Defences (taking into account regional inequalities caused by poor flood planning and the likely impacts of climate change)
PART 4 - REQUIREMENT FOR DEVELOPMENT CONSENT
PART 5 - APPLICATIONS FOR ORDERS GRANTING DEVELOPMENT CONSENT
PART 6 - DECIDING APPLICATIONS FOR ORDERS GRANTING DEVELOPMENT CONSENT
PART 7 - DEVELOPMENT CONSENT ORDERS
PART 8 - ENFORCEMENT
PART 9 - CHANGES TO EXISTING PLANNING REGIMES
- Clause 150: Remove all statutory references to the local member review procedure
PART 10 - COMMUNITY INFRASTRUCTURE LEVY
Overall RICS maintains that it is necessary to add flesh to the bones CIL section in order that more detail in primary legislation and not all left to regulations.
There is a need to define 'community infrastructure' in primary legislation.
Any references to land value increase 'uplift' must be removed otherwise this Bill will facilitate PGS by the backdoor.
- Clause 163 (2): delete the value of which increases due to permission for development
- Clause 164 (2): the role of an RDA as a charging authority needs to be clarified
- Clause 165 (2) (d): insert the amount of CIL to be determined in reference to existing Section 106 agreements, those in process, or which are not yet the subject of application
- Clause 166 (2) (a) & (b): alter 'may require/include ' to 'must require/include'
- Clause 166 (4) (b): delete and replace with have regard to the increase in land value and site specific S106 requirements (and a formal repeal of the Planning Gain Supplement (preparation) Act 2007)
- Clause 166 (4) insert (f): provide agreed infrastructure valuation standards
- Clause 167 (2) insert (d):ring-fenced funding for community infrastructure to ensure that it is additional to other infrastructure monies
- Clause 167 (5) (d): insert 'as discussed with the land owner/developer
- Clause 168 (5): delete 'collect' and replace with 'The regulations should assume that one authority, district or unitary, should collect on behalf of all charging authorities.'
- Clause 169 insert add subsection 4: regulations should make provisions for land owners/developers to reclaim CIL should infrastructure not be delivered in accordance with agreements
- Clause 171 (1): delete as it negates what little definition is included in the Bill.
Overall points on CIL
o RICS understands the need to maintain adequate flexibility in the primary legislation, but without clarity from Government and a genuine explicit commitment to investment in community infrastructure and what that would look like, we will see deprived areas like Bolton loosing much needed funding
o The broad nature of the enabling powers means there is a risk that Parliamentarians will not know the full implications of what they are voting for. For example CIL could be defined as parks and local renewable energy production, or funding road works leading to increased congestion which in turn have very different outcomes
o As it stands, CIL could be implemented on a discretionary basis allowing local authorities to opt out of this system. This shows a lack of commitment from Government to fairness and equality that could bring about an unequal playing field
o RICS maintains that enshrined in primary legislation is the need for a rational system imposing proportionate charges on developers that will support the sustainable growth of a local area
o RICS is concerned about the capacity of already overstretched local planning authorities to deliver the unnecessarily complicated system. Therefore RICS would like to see transitional arrangements put in place to allow planning departments to recruit, up-skill or even outsource to the private sector
o In the absence of clarity we could have a system that over taxes developers and what money is collected is kept under central control with no local accountability or democratic authority. This would be a negation of Government and industry's stated aims of a local system providing much needed community infrastructure to deliver a sustainable future.
PART 11 - FINAL PROVISIONS
Community Infrastructure Levy (CIL)
Part 10 of the Planning Bill contains the Community Infrastructure Levy (CIL). The RICS, the mark of property professionalism worldwide, applauds Government's decision to scrap the Planning Gain Supplement, which the Property Industry felt would be unworkable. There is a need for a rational system imposing proportionate charges on developers that will support the sustainable growth of a local area, but at present the Planning Bill does not achieve this.
RICS understands the need to maintain adequate flexibility in the Bill (primary legislation), but without clarity from Government and a genuine explicit commitment to investment in community infrastructure and what that would look like, we will see deprived areas losing much needed funding. A lot more detail is required.
The position paper from Communities and Local Government (24 January 2008) goes some way to clarifying the Government's thinking on the implementation of CIL, and spells out the procedure for setting the CIL. However, RICS still believes that more of this clarity should be included in the primary legislation.
Government Position on CIL, the basics:
What CIL if for: to capture investment from the private sector in providing infrastructure which will enable sustainable development.
How CIL will be set:
Charging Authorities will base their CIL charging schedule on an assessment of infrastructure required to facilitate, enable or mitigate the impact of, development in their area. This will be based on the agreed development plan as part of the LDF process. The regulations are likely to stipulate that CIL must be proportionate and timely. Importantly charging authorities must prioritise their infrastructure requirements, and also have regard to other funding streams available to them. It is recognized that CIL must be an additional funding stream, used to unlock develop rather than replace public sector infrastructure investment.
How CIL will be spent:
CIL will be spent on providing infrastructure which facilitates development, if the CIL is set too high Government recognises that this will discourage development and as such maintains an exceptional power for the Secretary of State to set caps on CIL.
CIL will be spent on those items of infrastructure as fall under the broad headings of transport, social and environmental infrastructure. Regulation will set out the applications of CIL funding more clearly. There is also provision for Government agencies such as the Highways Agency or Environment Agency to use CIL funding for the provisions of infrastructure which falls under their remit as delivery agencies (highways and flood defenses in particular).
It is envisaged that CIL will also make some contribution to sub-regional infrastructure as this has been one of the gaps in funding under the negotiated agreement system. However, it is recognized that CIL will not be large enough to completely fund large infrastructure provision and that the public sector will remain the majority funder in these cases.
Regulations will also stipulate how CIL monies are to be monitored, not only by the charging authority, but also by any authority or agency in receipt of CIL.
Setting Charges Appropriately:
The regulations will set out what bases (floor space, number of bedrooms, number of dwellings etc) will be used in setting the charges. Government is still deliberating as to how prescriptive to be on this issue.
The charging authority may, amongst other things, have reference to the value of the increase in land value arising from the granting of planning permission. Government is working with stakeholders, particularly the commercial property sector, to determine where there may be other, more appropriate measures. RICS and others have shown that the complexity of valuing uplift outweighs the benefits to viability that taking this calculation into account may provide.
Charging authorities must have regard to the other charges that they are imposing upon the developer through negotiated agreements, again the emphasis is on ensuring that CIL unlocks rather than hinders developments.
The charging schedule should also be kept under review to ensure that it is responsive. This may be done in relation to inflation, or possibly the construction price index. Regulations will set out these procedures to ensure that stakeholders and communities are involved in this review process. In exceptional circumstances the Secretary of State can set a cap for the levels of CIL charges in order to ensure that CIL promotes rather than obstructs development.
The Future of Planning Obligations:
Under the provisions of the Bill, the regulations may allow authorities to opt out of charging CIL. In this case those authorities will continue to collect developer contributions via the current negotiated agreements and other obligations.
Regulations may also set out how CIL and negotiated agreements complement one another; Government is currently consulting on whether there should be a statutory boundary between planning obligations and CIL, and where that boundary should be.
Paying CIL and Failure to pay:
It is currently envisaged that CIL, like planning obligations, will be payable at the commencement of development. It will be determined at or with reference to the point in time at which the planning permission first becomes fully effective. It is therefore unlikely that this will be at the outline stage. According to the Bill it may be possible for CIL to be paid in installments.
Failure to pay CIL could result in a legal requirement to halt development. There is also a power to create a criminal offence for failure to pay CIL.
Government must ensure that the vision set out for CIL is enshrined in the primary legislation. Without this the CIL enabling powers could have long lasting and negative unintended consequences.
Benefits of a simple and clear CIL:
· A clear charging schedule which would enable developers to include this as a development cost as part of their development appraisal process
· Provisions for ensuring that charging authorities take into account the other development costs placed on developers by that authority (such as S106 agreements)
· Possible provisions for linking the CIL to market forces, such as inflation or the Construction Price Index to ensure developments remain viable
· An opportunity for those affected by the development of an area to participate in the prioritization of infrastructure
· CIL will be applicable to both residential and commercial development, preventing a skewing of the market, however we must ensure that CIL promotes a sustainable mixed-use model
· The de minimis threshold is likely to exclude householder and some permitted developments to ensure that the individual is not penalized, rather that this captures funding from smaller/ medium sized developments.
More clarity is required on:
· Arrangements given the slow progress of the LDF process. If CIL is to be based on agreed Local Development Frameworks, then the lack of sound Core Strategies in most local authorities
· Definition of Charging Authorities, particularly in areas with multi-tiered authorities
· how to achieve rigor and flexibility within the CIL system
· what CIL may be used to fund - there are scattered allusions to: Waste, Transport (both public and road), Schools, Hospitals, Sports Grounds, Flood Defenses, Parks, etc.
· Affordable housing may be included at a later stage but at this point that will still be determined through negotiated agreements
· The capacity of some charging authorities to deliver costed assessments of infrastructure need
· The relationship between the increase in land value and the levels of CIL could result in a PGS system, which the development industry proved was unworkable.
· The role of RDAs
· How CIL will work to promote development in areas of market failure
RICS would like to see:
· Further clarity on the above points
· The repeal of the 2007 Planning Gain Supplement (preparations) Act
· CIL become an official development plan document, embedded within the LDF system
· Transitional arrangements which provide certainty for the development industry and local authorities
· Guidance on the identification, assessment, and costing of infrastructure
· A clear and simple charging system which will promote sustainable development