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New infrastructure levy 'wrong for Fenland'

The Community Infrastructure Levy (CIL) is not the most appropriate or efficient way of funding infrastructure to support new development in Fenland, according to a new report.

Local

Instead, Fenland District Council should continue to use Section 106 agreements as the most flexible and productive way of securing developers' contributions. But it should review that approach in three years' time.

That is the main recommendation from independent experts who have conducted a detailed analysis of the levy for the council.

The CIL is a charge that local authorities can choose to impose on new developments in their area. It says that for each square metre of new floorspace a developer will pay a fixed, non-negotiable charge to the council. In turn, the council will pool all such contributions across the district and spend that money on infrastructure in the ways it deems most appropriate.

Briefing papers outlining the main findings of the experts' report have been sent to all FDC members, the Fenland Developer Forum and town and parish councils.

Full details, together with a series of recommendations, will go to the council's Cabinet on November 20 to determine the best way forward.

Several key factors make the introduction of a CIL unsuitable for Fenland at the moment, the experts say. They include:

·         The viability of development is challenging at present in that the costs associated with new developments often outweigh any reasonable profit a developer might expect to make. This means only a relatively low CIL could be charged

·         The levy is fixed, ruling out any ability to be flexible in negotiating contributions with developers

·         Large-scale developments are increasingly being excluded from CIL charging because big sites already have large on-site infrastructure provision and costs covered by Section 106. It is seen as unfair for such schemes to pay a CIL charge because they would in effect be paying twice for infrastructure.

·         There are lots of exemptions - for example, anything less than 100 square metres (except new homes), charities, affordable housing, self-build (which could be 20-35 per cent in Fenland) and conversions

If the Cabinet decides not to introduce a CIL, the council will need to refresh and refine its approach to Section 106 agreements.

A new Supplementary Planning Document (SPD) for Section 106 will be necessary to set out new ways of working and requirements for developers' contributions.

Councillor Fred Yeulett, FDC's Cabinet member responsible for planning policy and growth, said: "Fenland remains open for business and committed to growth. Despite the challenges, development remains viable here and developers can afford to deliver infrastructure. We will ensure it is provided at the right time and in the right place.

"Evidence suggests that CIL isn't the best way forward for us at this stage.  Having carefully considered all the options for securing developer contributions and infrastructure, of which CIL is only one, it seems the most effective solution for the time being is to focus on Section 106 agreements. However, that might change, so we will keep CIL under review.

"We are not alone in not progressing a CIL; most councils do not have one in place. Generally speaking, wealthy areas with high property values are introducing a CIL whereas less wealthy areas are not. That is because the evidence suggests introducing a charge would either make development unviable or bring in such small receipts that it is not worth incurring the considerable administration costs of collecting it."