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Object

Draft Charging Schedule and Draft Regulation 123 List

Representation ID: 21793

Received: 26/03/2015

Respondent: Exigo Project Solutions

Agent: Exigo Project Solutions

Representation:

Regular monitoring is required to ensure that any detrimental impact of the CIL on delivery is noticed promptly and remedied.

Authorities should have a clearly defined review mechanism, however we strongly suggest that monitoring takes place on a 6 monthly basis rather than in 3 years time. Regular monitoring is key to ensure that CIL does not stifle development in the right locations.

Full text:

Promotion Costs

The cost of promoting a site through the planning process can be considerable and in particular strategic promotion of larger sites may incur costs over a number of years prior to commencing a planning application. We do not believe that the Viability Appraisal recognises or allows for these costs and as such we would request that this cost is considered in setting the CIL rates.

Professional Fees

The professional fees need to account for the full costs associated with bringing forward and implementing development, this must include planning costs, reserved matters and the discharge of planning conditions, public engagement and consultation and environmental impact assessment compliance. Peter Brett Associates has used a blanket figure of 12% across all developments, however fees of up to 20% can be incurred on sites which are not straightforward, therefore this figure will not be accurate in many cases. A percentage increase in build costs will have a substantial effect upon profit and a developer's profit margin can soon be eroded on more complicated sites.
West Bexhill CIL Rate

The document identifies the adopted Core Strategy (2014) 'Broad Location for Growth' at North Bexhill as a 'Strategic Growth Location' and consequently affords it with a lower rate of CIL of £100 per square metre compared with £170 per square metre for West Bexhill. In respect of why West Bexhill (also identified within the adopted Core Strategy as a 'Broad Location for Growth') does not have a lower tariff, the Statement on the Preliminary CIL Consultation (February 2015) sets out that the land at North Bexhill has significant infrastructure costs and the delivery Strategy for Bexhill is not dependent on the site (West Bexhill) coming forward.

The Core Strategy requires significant housing provision which will need to be met in the 'Broad Locations for Growth' in order for Rother to deliver its housing requirements. Whilst specific sites will be confirmed through detailed planning applications and the Rother Site Allocations and Development DPD, it is clear that residential development in these locations is required to meet the delivery strategy not only for Bexhill, but for Rother as a whole. Therefore the CIL rate should be lowered for West Bexhill to facilitate and promote development.

CIL Rate

The CIL rate which applies to West Bexhill (greenfield sites) is £170 per square metre. In our opinion this is considered to be relatively high.

Rother has been under delivering against the relevant housing targets since 2008, key to the Inspector finding the Core Strategy sound was the presumption of 3,100 new dwellings being delivered at the broad locations identified in Bexhill. The most recent publication on housing completions in December 2014 showed a shortfall of 48% between April and September 2014. It is therefore imperative that the CIL does not overburden potential development sites.

A review has been undertaken of neighbouring authorities' comparable adopted and emerging CIL rates and found that for locations similar to West Bexhill the range of tariffs for residential development are £50 to £150 per square metre. The implication of this is that this high CIL tariff will act as a strong disincentive and will potentially 'price out' developers who wish to bring forward residential schemes in Bexhill.

Relief

The CIL Regulations allow for the Council to provide further relief, at their discretion. However the Council has stated that this is not part of the charging schedule but may be published at a different time.

Our view is that this such relief should be made explicit at the time CIL is adopted and not at a later date, simply for the reason that the Council urgently needs to significantly boost its supply of housing and cannot afford to implement a charging schedule which will make housing sites unviable upon its adoption.

Review

The document states that once the CIL levy has been embedded locally there will be an opportunity to review rates taking into account local market signals. It is envisaged that this will take place within 3 years of its introduction.

The CIL Guidance outlines that the Government 'strongly encourages' reviews to ensure that CIL is fulfilling its aim and responds to market conditions. If the CIL is set at too high a rate, the delivery of housing will be put at risk. Regular monitoring is required to ensure that any detrimental impact of the CIL on delivery is noticed promptly and remedied. It should be borne in mind that, in reviewing the CIL rates, the same charge setting process and procedures are required to be followed and therefore there will be an inevitable delay until any deficit in delivery can be remedied.

We agree that authorities should have a clearly defined review mechanism, however we strongly suggest that monitoring takes place on a 6 monthly basis rather than in 3 years time. Regular monitoring is key to ensure that CIL does not stifle development in the right locations.

Conclusion

Whilst our client supports the overall premise of CIL and the certainty it gives the development industry, it is imperative that CIL tariffs are fully justified and are set at a level that allows the development strategies of local planning authorities to be delivered. Our concern with the current draft of Rother District Council's CIL charging schedule is that the tariff for residential development is set too high for West Bexhill, both in relation to other areas of the town (i.e. North Bexhill) and in comparison to neighbouring authorities.

Against the backdrop of the Council needing to deliver significant housing over the plan period it is vital that the CIL tariff does not discourage development and allows relief and regular reviews.