The ACA’s planning group responds to most of the government’s consultation papers related to planning. As an example, this is an abridged version of the response made to the recent proposals for the capture of value uplift when planning permission is granted, to eventually replace CIL
Do you agree that the existing CIL definition of ‘development’ should be maintained under the Infrastructure Levy, with the following excluded from the definition:
- developments of less than 100 square metres (unless this consists of one or more dwellings and does not meet the self- build criteria)
- Buildings which people do not normally go into
- Buildings into which peoples go only intermittently for the purpose of inspecting or maintaining fixed plant or machinery
- Structures which are not buildings, such as pylons and wind
Yes to all.
What should be the approach for setting the distinction between integral and Levy-funded infrastructure?
Integral infrastructure should be limited only to on-site items, or immediately adjacent highway alterations, that are essential to make the development operate properly.
Do you agree that local authorities should have the flexibility to use some of their levy funding for non-infrastructure items such as service provision?
No. Development creates the need for new capital provision: the new and continuing populations should fund necessary local services funded by council tax / business rates, not developers.
Should local authorities be expected to prioritise infrastructure and affordable housing needs before using the Levy to pay for non-infrastructure items such as local services?
Yes. See answer above.
Are there other non-infrastructure items not mentioned in this document that this element of the Levy funds could be spent on?
No. See answers above.
Do you agree that the Levy should capture value uplift associ- ated with permitted development rights that create new dwellings?
No. Permitted development is a right that should not be tampered with.
Are there some types of permitted development where no Levy should be charged?
Yes.All of them (see above).
Do you have views on the proposal to bring schemes brought forward through permitted development rights within scope of the Levy? Do you have views on an appropriate value threshold for qualifying permitted development? Do you have views on an appropriate Levy rate ‘ceiling’ for such sites, and how that might be decided?
Permitted development should not be taxed (see answers above).
Is there is a case for additional offsets from the Levy, beyond those identified in the paragraphs above to facilitate marginal brownfield development coming forward?
Yes. But subject to definition of risk, although we believe such a system of “offsets” to be unworkable – if the cost of developing a brownfield site is high, then the resulting profit (and therefore levy) will inevitably be low.
Please provide a free text response to explain your answers above.
We believe that the whole levy proposal is based on a funda- mental misunderstanding of how the system should work. If there is to be a tax on development it should be on the prof- its made by developers, not on some complex, unfair (and partly upfront) payment regime. Profit is how other sectors (energy suppliers, farmers, etc) are taxed. We don’t agree with CIL either (it stifles development), but at least it’s sim- ple and administrable.
Is there an alternative payment mechanism that would be more suitable for the Infrastructure Levy?
Yes. General (or local) taxation on development – examples are corporation/sales/inheritance tax. Building should not be taxed differently from the production of bread or widgets. This question would be better answered by an economist.
Do you agree with the proposed application of a land charge at commencement of development and removal of a local land charge once the provisional levy payment is made?
Yes. But only if the legal costs are discounted from the levy payment (ie are met by the local authority). Will the Land Registry be given additional funding to cope with the greatly increased demand? (it’s already very slow).
To what extent do you agree that a local authority should be able to require that payment of the Levy (or a proportion of the Levy liability) is made prior to site completion?
Strongly disagree. Again, the development system doesn’t work like this.Where will the money come from before there are any sales?
Are there circumstances when a local authority should be able to require an early payment of the Levy or a proportion of the Levy?
No. Developers should not be required to lend money to local authorities.
Do you agree that the proposed role for valuations of GDV is proportionate and necessary in the context of creating a Levy that is responsive to market conditions.
No. Valuation upfront is expensive, uncertain and open to dispute. As already noted, tax should be paid on actual profit, not estimated values.
To what extent do you agree that the borrowing against Infrastructure Levy proceeds will be sufficient to ensure the timely delivery of infrastructure?
Strongly Agree. But unworkable and not related to planning permission. (Currently, when CIL is used – even for borrowing the infrastructure is still provided too )
To what extent do you agree that the government should look to go further, and enable specified upfront payments for items of infrastructure to be a condition for the granting of planning per- mission?
Unsure. Upfront payments should not be required but agreement for payment of a levy/tax based on actual costs and profits could be conditional upon planning permission.
Are there other mechanisms for ensuring infrastructure is delivered in a timely fashion that the government should consider for the new Infrastructure Levy?
No. How local authorities manage their infrastructure bud- gets should not need to be considered by developers.
To what extent do you agree that the strategic spending plan included in the Infrastructure Delivery Strategy will provide trans- parency & certainty on how the Levy will be spent?
Strongly disagree. Transparency and certainty have not been provided by any levy/tax systems in the past.
In the context of a streamlined document, what information do you consider is required for a local authority to identify infrastructure needs?
We would hope that local authorities already identify their area needs efficiently.
Do you agree that views of the local community should be integrated into the drafting of an Infrastructure Delivery Strategy?
Yes. But not sure how this can be done effectively.
Do you agree that a spending plan in the Infrastructure Delivery Strategy should include
All that is necessary to make a local area function properly.
How can we make sure that infrastructure providers such as county councils can effectively influence the identification of Levy priorities?
We don’t how to make councils work effectively – or provide timely planning decisions.
To what extent do you agree that it is possible to identify infrastructure requirements at the local plan stage?
Strongly agree. At least in theory.
To what extent do you agree that the ‘right to require’ will reduce the risk that affordable housing contributions are negotiated down on viability grounds?
Unsure. Viability should not be an issue. Affordable housing should not be funded by developers, but by a different system of subsidy to the people who need it.
To what extent do you agree that local authorities should charge a highly discounted/zero-rated Infrastructure Levy rate on high percentage/100% affordable housing schemes?
Strongly disagree. If affordable housing is to be provided by developers, it will affect their profit and therefore automatically reduce the levy payable.
Do you agree that the proposed ‘test and learn’ approach to transitioning to the new Infrastructure Levy will help deliver an effective system?
Strongly agree. Such a system should have been considered when CIL was introduced. There will be complications and inefficiencies, partly because of the calculations being introduced: these will have their own dampening effect on development along with the extra costs involved. We believe that blanket taxes on land development that may not be directly related to local infrastructure deficiencies are neither fair nor helpful.