Monday, December 12, 2016

News: Infrastructure levy set for April start

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Developers wanting to build houses and out of town retail projects in the Rotherham borough are set to pay a levy from April under a new scheme designed to raise an estimated £12m to support local infrastructure.

The Planning Act 2008 introduced the concept of the Community Infrastructure Levy (CIL) as a new means for authorities to seek developer contributions to help fund infrastructure and Rotherham Council has been consulting on how it could operate in the borough. Councils aren't obliged to introduce a levy but the CIL can, in the most part, replace Section 106 financial contributions and provide a more transparent way of raising money to help pay for the infrastructure required to deliver the Local Plan.

Some housebuilders and landowners have objected to the proposals. An independent examination has been held into the CIL Charging Schedule, which sets out the rates the Council proposes to charge qualifying development. The examiner concluded that the Council's proposals strike an appropriate balance between funding infrastructure via the levy and the potential effects on the economic viability of development in the Borough. Having passed examination, the Council can now progress to adopt and implement the Levy.

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With the borough's local plan identifying that 235 hectares of land will be needed over the period to meet the broad requirements of 12 - 15,000 additional jobs, office and industrial developments are set to be exempt from the new levy.

Section 106 legal agreements are signed between developers and the council when planning permission is granted on a site by site basis. They often include funding that can be used for school places, improving the local road network or public transport provision. Section 106 agreements would still be used, where appropriate, to secure affordable housing and on-site mitigation.

The Charging Schedule will see housing developers pay different amounts in different areas of the borough, ranging from £55 / sq m in areas like Whiston and Wickersley, to £30 / sq m in the Dearne, and £15 / sq m at Bassingthorpe Farm.

Developers proposing a new supermarket would pay £60 / sq m and the development of Retail Warehouse / Retail Parks would incur £30 / sq m. Business park office, industrial, and town centre comparison retail developments are not considered viable under current market conditions and would not attract any levy.

With approval from council members, officers are working to begin charging the levy from April 6 2017.

A report to the recent council meeting stated: "Although significant, CIL revenue will only help to contribute towards total infrastructure costs. In the early years of the CIL charge, revenue will remain relatively modest and is likely to play a more important role in helping to release other funding sources. In the later years of the Local Plan period as larger residential developments are built out, CIL income is projected to average around £1.3m per annum. As the economy improves there may be scope to revise the CIL charging rates."

Studies into the borough's infrastructure concluded that total infrastructure requirements to support the Local Plan are estimated to cost around £99m and with the scarcity of Government funding, only £48.8m funding is anticipated from mainstream or known sources. The estimated income based on the proposed CIL rates was at least £12m.

An initial list of top priority infrastructure schemes that the CIL may be used to fund was produced.

Images: RMBC


1 comments:

Rob Foulds December 12, 2016 at 1:36 PM  

I'm sure we can rely wholly upon the integrity of Rotherham MBC to use the levy receipts in a responsible manner and ensure that the residents of the borough, oh sorry, I mean the council's "customers", receive the very best value for money we can - I'm sure the big fat salaried parasites won't receive yet another hike in income and I'm sure there won't be any junketing off to award ceremonies, or anything like that.

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