A little while
ago [1] I wrote about the likely impact of CIL and all the associated costs,
fees and levies that can be applied when making even the most innocuous of
planning applications. Since then the Government have confirmed that planning
fees will rise by 15%. The jury is still out over allowing authorities
individual rights to set their own fees.
Well, my gast
has never been so flabbered when applying recently for three residential
caravans. Nothing too exciting about that. But during the course of the
application I was contacted by the Planning Officer to ask when I was going to
submit my unilateral S.106 obligation. I expressed some surprise -given
the development was adjacent an existing mobile home park with its own
facilities - but was directed to a rather well hidden backwater of the
councils’ website where there lurked the adopted Supplementary Planning
Document on Planning Obligations – and an infrastructure levy calculator!
I applied the
calculator to the proposal. It came to over £16,000. I blanched. I must have
got it wrong, but no. With two bedrooms per unit (albeit very small ones) the
calculator assumed there should be a heavy contribution for local schools
provision as well as applying all kinds of additional charges; including for a
welcome pack to the area, supplied by the council at over £30 per pack.
Wonderful. Since when is a welcome pack ‘infrastructure’? Why not lie and
propose one-bed units? There was a monitoring element applied.
But - I pointed
out – residential caravans are almost exclusively the province of the retired
and elderly. In fact my client did not accept families onto the site. Quick as
a flash the response came back that in that case the costs would be just as
much for enhanced health care services, so the same figure still applied. There
was no room for ‘negotiation’; despite that very word appearing in the first
paragraph of the SPD document. So my client agreed to pay up and consent was
duly granted.
A number of
issues come to mind. Firstly the explanatory documents indicated that this was
not meant to be a betterment tax. Quite frankly I couldn’t see even the merest
glimpse of clear water between the so called levy and a betterment based tax. The
term planning ‘obligation’ seems far more relevant.
Secondly, the
calculator couldn’t be adjusted to reflect the reality of the proposed
development and therefore even though the Planning Officer’s instantly revised
stance might have had some legitimacy, the reality is that the extracted fee
will still not be applied to healthcare, but to education (and all the other
bits and bobs that formed the extensive schedule of so called infrastructure –
there are over 30 discrete elements against which the levy is applied). So it
is unlikely that the extracted cash will actually go to fulfilling the
generated needs in any event - even if they existed in the first place.
Perhaps the
money just goes into the pot and is divvied up as and when. Not much point to the
calculator then if that’s the case. So I looked into things a bit further.
The SPD noted
correctly that, “CIL should
only be levied where there is a genuine infrastructure need to support
development of the area”. The Annual Monitoring Report for December 2011 (the latest
available) reveals that of nearly £20 million contributed in this way, less
than £1m had actually been spent in the last 12 months. So where is all that
‘genuine infrastructure’?
Let’s be honest.
However you jazz it up, it’s a tax on development; a betterment tax pure and
simple. Never mind what it is, pay up or shut up. Even if it had been one
dwelling a substantial levy would have applied. The calculator indicates that a
single 2 bedroom bricks and mortar dwelling would require just over £10,000 to
be coughed up.
And don’t think
you’re safe if you’re not doing residential development. There is a similar
commercial space calculator too.
CIL is meant to
provide certainty and it certainly does that. Certainty that I will be warning
my clients to avoid some areas where excessive levies are being applied in
apparently arbitrary ways that do not appear to deliver on the promise.
The real kicker
is that this SPD went though the formal adoption procedure and someone,
somewhere, thought it was all OK! And the Government wonders why the
development sector is parlous.
Of course, the costs can be passed on to the purchaser/tenant. But this
simply adds to price inflation. It wouldn’t be so bad perhaps if the money was
actually being spent. And maybe it is all ring fenced and committed, but the
AMR doesn’t hint at any of that. So for the time being it sits in the Council’s
coffers doing nothing. Perhaps.
I have been deliberately vague over the circumstances as my paranoia knows no bounds. But is this going to be the future of planning? Really? Even for the much vaunted self-builder who was encouraged into action by the Housing Minister only a month or two ago? I fear it is and the real outcome will be a stalling of development, except for those who have very deep pockets indeed.
Welcome to the
brave new world of Planning by numbers. Large ones.
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