Helen Martin – Head of Planning

Dudley MBC

14th November 2012

Community Infrastructure Levy

Background to Dudley’s

Preliminary Draft Charging Schedule

Format

•An Introduction to Dudley Borough:Growth Predictions for Dudley Borough

Existing Planning Obligations approach

•Reasons for moving towards CIL

•Work undertaken at Dudley to date:

Identifying Infrastructure Requirements

Assessing Viability

•Timetable for progressing the Dudley CIL

Dudley Borough

Dudley Community

Strategy 2005-2020

• Five Key Principles:

• Promoting equality –

tackling inequality

• Safeguarding the future

• Reflecting priorities through

physical change

• Delivery in partnership

• Involving people

• 38 square miles, 24 wards

•25% consists of open space, inc.

approx. 1,700 ha Green Belt

•Population 312,900 (2011 Census) &

projected to be over 334,000 in 2026

•Diverse character of town centres

Predicted GrowthBlack Country Core Strategy•Sets out vision up to 2026

•Development of comparison

shopping, office, employment, leisure, tourism and culture

within 4 main centres

•Network of vibrant and attractive town, district and local

centres

•Employment led Regeneration Corridors to provide sufficient

high quality and local employment land in the best locations

•Housing led Regeneration Corridors to create sustainable

communities on redundant employment land

•High Quality Environment through Urban Park beacons and

corridors, and respecting, protecting and enhancing

biodiversity and geodiversity

•First-class transport network providing rapid, convenient and

sustainable links between centres, communities and

employment sites

•Network of easily accessible community services, esp. lifelong

learning, health care and sport & recreation facilities.

Existing System of Planning

Obligations at Dudley

Pre 2007 – Affordable Housing, POS,

Education…generally on larger schemes

Dec. 2007 – Original Planning Obligations SPD

Required on smaller schemes

Raft of new formula-based obligations such as:

Public Realm

Libraries

Transport Infrastructure Improvements

Nature Conservation Enhancements

The Present – Common Issues

Viability, Viability, Viability…

• The sites and the scale of development identified in Plans

should not be subject to such a scale of obligations and

policy burdens that their ability to be delivered viably is

threatened. (NPPF Para. 173)

• Where obligations are being sought or revised, LPAs should

take account of changes in market conditions over time

and, wherever appropriate, be sufficiently flexible to prevent

planned development being stalled. (NPPF Para. 205)

The Present – Common Issues

Tests, Tests, Tests…

• CIL Regulation 122

• Planning Obligations should only be sought where they meet all of

the following tests:

• Necessary to make the development acceptable in planning

terms

• Directly related to the development; and

• Fairly and reasonably related in scale and kind to the

development

Appeal Decisions at Dudley

Open Space, Sport and Recreation

•Residential application for 16 flats, contribution of £22,650

sought based on formula in SPD relating to number of

bedspaces

•Council recommended that monies be spent at improving

access (poor quality steps) to local park which was within 400m

of site

•Inspector concluded that there was another entrance point to

the park slightly further away which had better quality level

access that residents of the development could use.

“No convincing link has been shown between the

development and required funding for improvements to

open space, sport and recreation and it would not be

directly related to the development as the CIL Regulations

require.”

Appeal Decisions at Dudley

Public Realm

•Residential application for 7 flats within Brierley Hill Town

Centre and Conservation Area, contribution of £3,350

sought for public realm improvements

•Council recommended that monies be spent at improving

the public realm within the Town Centre/CA, a key

infrastructure requirement identified in the adopted Brierley

Hill AAP

•Inspector concluded that there was “insufficient detail

to demonstrate that the works that would be carried

out would be directly related to the proposed

development.”

Additional limitations from

April 2014

Use of Planning Obligations to be significantly scaled back

by CIL regulations

• Affordable Housing and Specific mitigation of a

development only

• Pooling of contributions restricted to 5 contributions for

any piece or type of infrastructure

Restricted to Specific Mitigation

Planning Application for 150m retail

extension

•Transport Infrastructure Improvements contribution of

£1,325 required using formula in SPD to offset impact of

additional traffic-based trips to and from development

•Council received monies and due to spend on Transport

Infrastructure Improvements within the locality, no specific

scheme identified within S106

•Due to small scale nature of development would be

difficult to justify now under CIL Regs – how to prove it is

directly related to development?

Pooled Contributions – Stourbridge

LibraryFacilities were upgraded by the purchase of two new

newspaper stands, two graphic novel stands and

some new seating to enhance the new shelving

£2,625 library contributions from 10 planning

permissions (approved between Feb. 2008 and

Nov. 2009)

RESTRICTION TO 5 MEANS THAT THIS WOULD

NOT BE POSSIBLE AFTER APRIL 2014

Pooled Contributions – Leasowes

Restoration57 ha Grade 1 public park in Halesowen – restored

walkways, new paths and additional planting to improve

access and help return the park and woodland to its historic

1740s layout

£187,000 Open Space, Sport and Recreation capital

contributions from 11 planning permissions (approved

between Aug. 2003 and Nov. 2007). Match funding of

£1.3m Heritage Lottery Funding

RESTRICTION TO 5 MEANS THAT THIS WOULD NOT

BE POSSIBLE AFTER APRIL 2014

But Dudley Borough still needs infrastructure

contributions to support the growth planned for in the

Core Strategy

Problems, Problems, Problems…

Only current way to secure generalised developer

contributions is to move to away from Planning

Obligations to CIL

The only realistic way forward…?

Generally accepted principle that new development

should pay a share of the cost of the infrastructure

required to support it.

Why should developments make

contributions?

“The purpose of the planning system is to contribute to

the achievement of sustainable development” (NPPF. Para.6)

Provision of infrastructure is key to sustainable development:

Economic – contributing to competitive economy, inc. provision of infrastructure

Social – supporting strong, vibrant and healthy communities, providing housing to

meet local needs supported by high quality built environment and accessible local

services

Environmental – contributing to protecting and enhancing natural, built and

historic environment

CIL - The Starting Point

Is any level of CIL viable and justifiable in Dudley Borough in

the current economic climate?

Scoping undertaken with Black Country neighbours to

ascertain possible viability and infrastructure

requirements

Suggested that there is an Infrastructure Funding Gap

and that retail developments across the Borough and

residential developments in parts of the Borough

could afford to pay CIL

Enough justification to undertake detailed viability

assessment for CIL and infrastructure requirements

across the Borough

Preparing the Preliminary

Draft Charging Schedule

“aim to strike an appropriate balance between the

desirability of funding infrastructure from CIL and the

potential effects of the imposition of CIL on the

economic viability of development across its area.”

Predicted Growth

Core Strategy

DPDs/AAPs

Past Trends

Infrastructure Funding Gap

Infrastructure Requirements

Other sources of funding

Viability Testing of CIL rates

Different rates for different sizes, locations

and or uses

Evidence 1:Predicted Growth

The provision of appropriate infrastructure in a timely

manner underpins the whole transformational and

regeneration strategy

Without appropriate investment future development

will be neither sustainable nor acceptable

Policy DEL1 ‘Infrastructure Provision’

Evidence 2: Infrastructure

Requirements

Infrastructure Cost Funding

Available

Funding Gap

Transport £91,951,000 £39,056,000 £52,895,000

Nature Conservation £4,310,000 £0 £4,310,000

Libraries £5,149,000 £5,025,000 £124,000

Air Quality £1,232,200 £120,000 £1,112,200

Public Realm £47,661,000 £4,548,000 £43,113,000

Flood Management &

Sustainable Drainage

£8,216,000 £3,396,000 £4,820,000

Total £158,519,200 £52,145,000 £106,374,200

Evidence 3: Viability Testing

•Area Based and Strategic Residual Appraisals

•Not Site Specific

Residential

4 scheme types

10 postcode areas

Non Residential

Offices, Industrial, Retail, and others

2 scheme types – new build and extension

3 localities – Dudley TC, Merry Hill and remaining

areas

Appraisals assess potential surplus available for CIL

contribution after costs of development are deducted from

value

Evidence 3: Viability Testing

Example Appraisal for Small Residential

Scheme – 5 Homes in DY8

Development Value £925,000

Land £150,000

Construction £425,000

Fees £80,000

Finance £30,000

Profit £185,000 £870,000

Surplus Available for CIL £55,000 (£134 / m2)

Evidence 3: Issues

Viability Assessment: in-house

Surveyor

Justifying the Funding Gap

Sense of Realism

Pragmatism

Preparing for Implementation

Political Sensitivities

Striking a Balance between

Infrastructure Requirements and

Affordability

Infrastructure Funding Gap equates to

£106,374,200 over the Core Strategy Plan Period to

2026

Nil CIL rate proposed for locations and uses where

there is considered to be only marginal or no

viability

Potential CIL receipts between 2014 - 2026 will only

contribute to filling the funding gap

Is the projected CIL revenue enough to

make it worthwhile?

•Projected CIL receipts based on analysis of a combination

of past trends and predicted future development as set out in

Black Country Core Strategy and DPDs suggests that

sufficient revenue could be generated to justify

implementation

•This revenue is not as significant as potential receipts under

the previous S106 system, which would suggest viability

issues have been adequately taken into consideration

•However....no decision to implement at CIL taken yet

Timetable for

progressing

the Dudley CIL

Date Stage in Process

6th December 2012 Cabinet approval of

Preliminary Draft

Charging Schedule for

formal consultation

4th January to

15th February 2013

Preliminary Draft

Charging Schedule - 6

week public consultation

September to November

2013

Draft Charging Schedule

-6 week Public

Consultation

November/December

2013

Draft Charging Schedule

submitted to Secretary

of State for Public

Examination

January/February 2014 Public Examination

April/May/June 2014 Adoption

Any Questions?