Full text:
I am writing on behalf of Persimmon Homes in response to the consultation on the Rother District Council Preliminary Draft Charging Schedule and Draft R123 List. The relevant forms are enclosed and the representations are shown below.
Q1. Do you agree that Rother District Council should introduce a CIL?
No comment at this stage.
Q2. Do you agree that there is [a] clear infrastructure funding gap?
No comment at this stage.
Q3. Do you agree with the proposed residential CIL charging zones?
No comment at this stage.
Q4. Do you agree with the proposed CIL charge rates for residential uses?
Funding Gap
The gist of CIL is that a local authority identifies a level of growth and a level of infrastructure investment necessary to support that growth and then, if possible, requires a standard charge from new development to pay for that infrastructure.
However, it is unfortunately inevitable that due to the high cost of infrastructure, there is often a residual funding gap. For instance, in the neighbouring District of Wealdon, where 450 new homes are required every year and where the process of adopting CIL is more progressed, the total cost of all infrastructure is estimated at £67.5m, and with £19.1m of funding already identified it is estimated that CIL would deliver just over half (54%) of the remaining funding required (£26m out of £48.4m), leaving a residual funding gap of £22.4m.
In comparison, the PDCS explains that for Rother, where 335 new homes are required per year, a total infrastructure cost of £172m has been identified, and with £39m of funding already identified it is estimated that CIL would deliver around a quarter (24-26%) of the remaining funding required (£32-36.4m out of £133m), leaving a residual funding gap of £96.6-101m.
The Infrastructure Funding Gap Analysis (RDC August 2014) notes in conclusion that:
"...there will remain a significant shortfall in funding that will need to be found from other sources whose funding has yet to be determined." (RDC emphasis)
Rother District Council 2 26 September 2014
Thus our client is concerned that the significance of the residual funding gap could lead to pressure in the future to increase the CIL rate and adversely affect the viability of development proposals. To address this it would appear evident that the Draft Regulation 123 List requires reconsideration to reduce the overall infrastructure cost.
Anticipated Quantum of Development
Whilst the Economic Viability Assessment correctly identifies (para. 3.2.1) the Local Plan Core Strategy requirement for "at least 5,700" new homes between 2011 and 2028, later figures in the Assessment are both inconsistent and appear to reflect the lower housing target expressed in earlier versions of the Core Strategy; for instance (Table 4.7: Distribution of development):
Settlement - Anticipated number of dwellings (incl. affordable)
Bexhill & Hastings Fringe -2,000
Battle - 400
Rye - 200
Villages - 900
TOTAL - 3,500
and (Table 6.2: Residential potential CIL receipts):
Settlement - Anticipated number of dwellings (incl. affordable)
Bexhill & Hastings Fringe - 2,600
Bexhill - 600
Bexhill Strategic sites - 1,950
Hastings Fringe - 50
Battle - 160
Rye - 120
Villages - 900
TOTAL - 3,780
whereas the figures in the Submission Core Strategy and as proposed to be adopted (Figure 8 / Proposed Modification 7.14) are:
Settlement - Anticipated number of dwellings (incl. affordable)
Bexhill & Hastings Fringe - 2,095-2,330 3,200-3,350
Bexhill - 2,050-2,250 3,100
Hastings Fringe - 45-80 100-250
Battle - 400-440 475-500
Rye - 250-350 355-400
Villages - 950-1,000 1,670
TOTAL - 3,700-4,100 At least 5,700
The modified Local Plan Core Strategy even highlights that (para. 7.50 / Proposed Modification 7.15):
"Taking account of outstanding planning permissions, there is a need to provide for a 4295* dwellings in the District as a whole between 2011 and 2028"
This would suggest that the calculations of the CIL required per area of floorspace has been miscalculated on the assumption that several thousand homes less than are in fact planned will be provided. On this basis it wold appear that the proposed CIL rates could be reduced and yet CIL overall generate the same contribution towards infrastructure funding.
Proposed CIL Rates
With regard to the proposed CIL rates for residential uses, there would appear to be no justification for these. Having analysed the potential maximum (CIL) headroom (Table 4.7) (otherwise referred to as the 'overage'), the Economic Viability Assessment then states (para. 4.4.1) that a CIL charge is set that is well under this point for a number of reasons. It then states (para. 4.4.2) that whilst it would be conceivable to adopt an arithmetic approach to converting the 'overage' into a CIL rate, the Assessment states that PBA "prefer to use our professional judgement based on experience...and make recommendations for the LPA to consider"; no other explanation is given for how the recommended rates were arrived at - in other words the figures appear to have been plucked out of thin air.
On this basis the Assessment (Table 4.8) makes the following recommendations:
Charging Zone, Charging Area, CIL Rate (£ / sqm)
1 - Battle & Rural North & West - £240
2 - Rye & Rural East - £160
3a - Bexhill Central & East - £40
3b - Bexhill West - £200
4 - Strategic Allocations - £100
Whilst the Assessment states that the recommended rate has not been calculated but rather that it is based on a professional judgement, it is notable that the recommended CIL rate is generally between 32-48% (i.e. almost exactly a third to a half) of the overage; it thus appears that the figures recommended do in fact derive from a very crude calculation.
Without any further explanation, the PDCS then proposes (Table 1) different rates for two zones:
Charging Zone, Charging Area, CIL Rate (£ / sqm)
3a - Bexhill Central & East - £100
3b - Bexhill West - £180
On the basis of an average three-bedroom house of circa. 100 sqm this equates to a CIL Levy of:
Charging Zone, Charging Area, CIL Rate (£ / sqm)
1 - Battle & Rural North & West - £24,000
2 - Rye & Rural East - £16,000
3a - Bexhill Central & East - £10,000
3b - Bexhill West - £18,000
4 - Strategic Allocations - £10,000
By way of comparison, the process of adopting CIL in the neighbouring District of Wealdon is more advanced than in Rother. Wealdon abuts two of the proposed charging zones - Zone 1: Battle, Rural North & West, and Zone 3a: Bexhill West. Whilst the rates proposed for within Rother are, respectively, £240 and £180, the rates chargeable immediately across the District boundary are, respectively, £180 and £110. For an average three-bedroom house of circa. 100 sqm this equates to an additional cost of between £6-7,000.
Throughout the development of the Local Plan Core Strategy the Council emphasised the difficulty in bringing forward residential development within the District. Our client is this concerned that such a high CIL rate, and also such a high cost when compared to the neighbouring District, is likely to result in decreased in the housing market within Rother.
On this basis our client cannot agree with the proposed CIL rates for residential uses.
Q5. Do you agree with the proposed CIL rates for non-residential development?
No comment at this stage.
Q6. Do you support the introduction of an instalment policy in Rother for CIL payments?
Yes; however, our client has no suggestions on the form of instalment policy that should be adopted by the Council, but would welcome the opportunity to discuss this matter further and make further submissions should these be considered of assistance, following this consultation or through later consultations.
Q7. Do you have any views on whether the District Council should introduce a discretionary and exceptional relief policy.
Yes; however, as the Council has not made a decision on whether to adopt a discretionary and exceptional relief policy, our client has no suggestions on the form of instalment policy that should be adopted by the Council, but would welcome the opportunity to discuss this matter further and make further submissions should these be considered of assistance, following this consultation or through later consultations.
Q8. Do you agree with the proposed draft R123 list?
The NPPG advises (Paragraph: 096 Reference ID: 25-096-20140612) that:
"Regulation 123 of the Community Infrastructure Levy Regulations...provides for charging authorities to set out a list of those projects or types of infrastructure that it intends to fund, or may fund, through the levy."
However, there is a distinct lack of correlation between the Draft Regulation 123 List of infrastructure and the infrastructure projects listed in the Infrastructure Delivery Plan (IDP) (RDC, June 2014), and many projects identified in the IDP are only listed as being at 'concept' stage, with some even only being described as 'desirable', yet they appear in the Draft Regulation 123 List.
A number of infrastructure projects identified in the Draft Regulation 123 List are also not identified in the IDP as being the recipients of CIL funding; for instance the £130m funding required for the upgrading of the rail line is identified in the IDP as being funded by the DfT, Network Rail and SELEP.
The NPPG also advises (Paragraph: 097 Reference ID: 25-097-20140612) that:
"Where the regulation 123 list includes a generic type of infrastructure (such as 'education' or 'transport'), section 106 contributions should not be sought on any specific projects in that category." and (Paragraph: 100 Reference ID: 25-100-20140612) that: "Individual projects on the charging authority's list of infrastructure that it proposes to fund from the levy...cannot be funded by s106 contributions."
The Draft Regulation 123 List as contained within the PDCS contains a number of generic entries such as "bus shelters", "public realm improvements", "improvements to walking and cycling corridors", "public car park facilities", "children and young people's play areas", "Coombe Valley County Park", and so on and notes that exclusions will be facilities required in direct relation to a specific development.
However, it is unclear exactly what is proposed to be funded by direct contribution and what is to be funded through CIL. As such it is not clear to developers whether they will be liable for CIL and for other unspecified facilities that the Council considers to be directly-related to a specific development proposal.
On this basis our client cannot agree with the proposed draft R123 list.
Q9. Do you have any further comments on the PDCS?
No comment at this stage.
