Development pipeline to be hit by new charge
YORKSHIRE’S development pipeline could face increased pressure from today when local authorities across the region become empowered to implement a new charging system on future developments, according to experts.
The Planning Act of 2008 made provision for the Community Infrastructure Levy (CIL), which is a charge to be levied on new developments, payable when a development with planning consent commences.
The charge relates to residential and non-residential buildings and will be based on a formula accounting for the size and character of the development. Charges will expressed as a price ‘per square metre’ of floor space relating to different use classes and will be linked to an index of inflation.
From today, local authorities have the power to implement this new charging system and utilise money raised from it to pay for sub regional infrastructure.
However, experts believe the process of preparing the framework required is likely to take 12 months or more.
James Podesta, associate director of planning at CB Richard Ellis in Leeds, said: “Essentially, the CIL will be viewed as an additional tax on development. Currently, as developers proceed through the planning process they may be required to enter into ‘planning obligations’ which can include contributions to improve the local infrastructure if they relate to the schemes impact.
“Planning obligation contributions are agreed on a negotiation basis and although they could be scaled back, they will not be replaced by the new CIL charges, meaning that developers could now face additional costs.
“Any local Authority giving consideration to bringing in CIL should factor in the current economic circumstances before continuing. Here in Yorkshire it is clear that a synchronised downturn in the economy is not being followed by a synchronised recovery and any additional charges to be levied on developers is only likely to further stifle development.
“The Government’s view is that the CIL will increase fairness by broadening the range of developments asked to contribute allowing for the cumulative impact of smaller developments to be addressed. It also states that it will bring about improved certainty for developers and address shortfall in sub regional infrastructure investment.
“However, there are numerous schemes that are in danger of becoming unviable if this extra levy is charged and the fact that this is proposed in addition to the planning obligations will act as a further disincentive to developers.”
