Why is CIL important?
CIL is a vital new tool put at a local authority’s disposal in order to raise committed financial contributions from developers to help fund essential shared infrastructure across a planning area – in this case, across the whole of Waverley. It is important to understand that CIL is an additional and guaranteed way for a local authority to fund infrastructure investment and serves a different and complementary purpose to developer contributions made under planning conditions to mitigate the impacts of each particular site (‘section 106’ and ‘section 278’ requirements). It is linked to a Borough-wide list of infrastructure projects, rather than being tied to any one development. The principles of CIL are that it is fair, fast, more certain and transparent.
Examination Hearing 17th July 2018
The Public Examination by independent planning inspector Philip Staddon of Waverley’s Draft Infrastructure Levy (CIL) Schedule, was held in the main Council Chamber on 17th June 2018.
Present at the Hearing were consultants representing groups of housing developers, POW Campaign, Alfold Parish Council and Dunsfold Airport Limited (DAL) through their Counsel, Richard Turney. Waverley Borough Council (WBC) Officers were also present, but made little contribution, relying on their consultant (Mark Felgate of 3 Dragons) and Counsel (Lisa Bush QC) to put their case. A small number of members of the public attended in the public gallery. The proceedings were video-relayed, however WBC has taken the decision not to publish the recording on its website.
The Inspector made it clear that he was not empowered to put up CIL rates, nor was he aiming to reach agreement between the sides. He gave no comment on the representations on the day, but indicated that his full findings would be submitted to the government Planning Inspectorate in about 4 weeks, after which it would be sent to WBC for a ‘fact check’ and then made public.
At the start, the Inspector noted that this case had received an unusually high number of representations. These concerned, in brief;
- Developer’s consultants querying how WBC had arrived at and justified the comparatively high levels of CIL (see footnote).
- Local Parish Councils, local residents and community groups (including POW Campaign) who queried the policy to exempt the developers of Dunsfold Aerodrome from paying CIL now and at any point in the future
WBC handed round figures requested by the Inspector on projected residential CIL income (see http://www.waverley.gov.uk/downloads/file/6352/wbc-cil-001_-_cil_income_projections ). It showed a total of £94.6m being received over the Local Plan period. Setting this against an infrastructure funding need of £128.2m, it leaves a gap of some £33m. Also shown starkly in this table is the proposal by WBC that that the Dunsfold developer will not contribute at all to this gap – they will pay zero CIL. It was pointed out at the Hearing that this not only deprives the rest of the Borough of a fair contribution to overall infrastructure development from the largest strategic site in the Local Plan (Dunsfold Aerodrome) but penalises developers in the rest of Borough who are paying £95m, some of which may be diverted to provide infrastructure in the Alfold and Dunsfold area.
During the Hearing, representations on behalf of developers questioned the assumptions and calculations carried out by WBC to justify its CIL rates. These included;
- Some basic assumptions made were not reflective of local reality (build costs, house prices, density etc);
- CIL banding was too coarse and penalised medium-to-large sized sites;
- CIL rates are very high overall;
- It is arguably unfair to treat housing of all types for the elderly the same as other housing (a ‘use class’ distinction was proposed)
Representations made concerning the proposed exemption from CIL of Dunsfold Aerodrome (DA) included;
- Questionable input data was challenged by POW who argued that the ‘benchmark land value’ was wrong (it should be based on agricultural land use (83% of the site) not office use). POW also queried whether it is right to use Discounted Cash Flow which down-plays future income streams – in effect this ‘loses’ over £163 million of projected profit. Attention was drawn to house sale values on Dunsfold Aerodrome which had been discounted (as confirmed by WBC’s consultant) by 5%, compared with the rest of Waverley.
- The local Parish Council in which the majority of DA falls (Alfold) questioned the fairness of depriving the Parish of any CIL to which it would be entitled if Dunsfold Aerodrome were required to pay a contribution, and cited the poor existing infrastructure in the parish referred to in the Local Plan.
- WBC’s case for exempting DA from CIL seemed to rely very heavily on the provisions in the proposed ‘section 106’ for Phase One of the site’s development, even though they were reminded that CIL is designed to be a separate consideration. POW continued to point out the unfairness not only of the DA developer paying no CIL for phase one, but also the illogicality of exemption for all future phases, the scale, impact and amount of any section 106 contributions are not yet known. Counsel for DA referred to the expansion of DA not only to the planned 2600 homes, but beyond that yet further.
- WBC’s advisers stated that ‘DA is too big to fail’, but POW stated that based on its own sensitivity testing of the ‘viability’ figures for DA, a contribution of around £15-£20m from the DA developer was easily affordable and would not threaten viability of the site. (note; in the viability assessment, even with the disputed figures, WBC’s figures show a profit to the DA developer of £247 million).
- In summary, DA’s Counsel claimed that s106 was certain while CIL would be a drip feed. POW argued that it is possible to have CIL as well as s106 and until recently WBC had taken that view for DA. POW proposed a remedy whereby, at the very least, DA would be required to pay CIL for all future phases of the new settlement’s development.
By way of comparison, residential CIL rates adopted in some nearby planning authorities are;
Waverley £372 – £452 per sq m
Mole Valley £175 – £250 per sq m
Chichester £120 – £200 per sq m
South Downs NP £150 – £200 per sq m
Horsham £135 per sq m