Community Infrastructure Levy - Preliminary Draft Charging Schedule

Setting CIL Rates

1.         How are CIL rates set? 

Regulation 14 (I) of the CIL Regulations (2010) state that:

14 – (I) 

In setting rates (including differential rates), a charging authority must aim to strike what appears to the charging authority to be an appropriate balance between -

a. the desirability of funding from CIL (in whole or part) the actual and expected estimated total cost of infrastructure required to support the development of its area, taking into account other actual and expected sources of funding; and

b. the potential effects (taken as a whole) of the imposition of the CIL on the economic viability of development across its area.

To meet these criteria and produce this Preliminary Draft Charging Schedule, North Somerset has referred to two main sources of evidence:

  • An analysis of infrastructure requirements, costs and the funding gap, based on North Somerset’s Infrastructure Delivery Plan: to show that there is sufficient deficiency in infrastructure funding to justify the proposed CIL rate.
  • A viability assessment of development: to assess what level of CIL could be introduced without putting the overall development of the area at serious risk. 

This evidence and the proposals as a whole will be assessed through two periods of public consultation (including this one) and an examination by an independent inspector. The Council must then take a final formal vote on whether or not to adopt and implement the CIL. 

2.         Infrastructure requirements and funding gap 

a)         North Somerset’s Infrastructure Delivery Plan (IDP) 

Through the preparation and adoption of North Somerset Council’s Core Strategy, a significant level of infrastructure planning has taken place. This is set out in the North Somerset Infrastructure Delivery Plan September 2011 and the delivery schedules; North Somerset Infrastructure Delivery Schedule: Weston-super-Mare Area September 2011 and North Somerset Infrastructure Delivery Schedule: Remainder of North Somerset (Outside Weston and Weston Villages) September 2011.

The Government Guidance on preparing CIL Charging Schedules makes clear that it is not the role of the CIL Independent Examiner to re-examine infrastructure planning evidence which has supported a ‘sound’ Core Strategy or to challenge the soundness of an adopted development plan document. 

b)        Demonstrating a funding gap

 The IDP outlines the infrastructure requirements (along with known costs and funding streams) necessary in order to unlock and support the scale of growth identified in the Core Strategy. The total cost of this infrastructure is currently estimated at £433m.

 CIL can only be charged if there is a funding gap for infrastructure to meet the needs of development. The purpose of this document is not to provide a further detailed breakdown of infrastructure costs; however a significant funding gap of £149m can be demonstrated through a high-level analysis of key transport schemes, educational facilities and flood defences. These infrastructure categories represent approximately 50% of the total infrastructure costs and are set out below.

 (i)         Transport 

The growth proposals in the Core Strategy rely on the implementation of a number of Major Transport Schemes and other transport improvements. The table below sets out the schemes and their funding:

Scheme

Total cost

Public funding commitments

Private funding commitments

Residual funding gap

Major Transport Schemes (Weston Package; Ashton Vale Rapid Transit; South Bristol Link).

£108m

£102m

(includes DfT grant; JLTP; NSC capital & New Homes Bonus)

£6m

Nil

Junction 21 outbound improvements

£4.6m

£4.6m (NSC capital & New Homes Bonus)

Nil

Nil

Portishead Rail

£39m

£0.7

Nil

£38m

Airfield Bridge Link (road)

£24m

Nil

Nil

£24m

Banwell bypass

£25m

Nil

Nil

£25m

Herluin Way to Locking Road link

£15m

Nil

Nil

£15m

Park & Ride schemes (Weston & Long Ashton)

£3.1m

Nil

Nil

£3.1m

Other highways measures in IDP

£2.4m

£0.4m

Nil

£2m

Other public transport improvements in IDP

£4.8m

£2.8m

Nil

£2m

Other strategic Public Rights of Way or other pedestrian / cycle schemes in IDP

£1.7m

£0.3m

Nil

£1.4m

TOTAL

£227.6m

£110.8m

£6m

£110.5m

This table does not include a number of schemes expected to be delivered through Section 106 agreements, for example on-site access routes, Travel Plan measures and off-site works related to specific sites.

 (ii)        Education

North Somerset’s Infrastructure Delivery Plan identifies a need for a total of 1680 new primary school places in Weston-super-Mare, an additional 210 primary school places in Portishead, and new or extended secondary school provision equating to approximately 800 new school places at Weston.

 This is anticipated to be provided as follows:

Form of provision

Cost

Potential funding sources

Residual funding gap

Weston Villages - 4 x 420 place primary schools or equivalent

£20m

315 place primary school secured through Weston Airfield S106 agreement: value £3.8m

£16m

Portishead - expansion to existing schools (210 places)

£5m

None known

£5m

Weston-super-Mare - new or extended secondary schools (approx. 800 places)

£20m

Anticipated funding bid for University Technical College proposal: £9m

£11m (if UTC bid successful)

TOTAL

£45m

£32m

It is acknowledged that some of the primary school places at the Weston Villages may be provided through Section 106 agreements rather than the CIL. However, the purpose of this evidence is not to provide absolute assurances as to how North Somerset intends to spend the CIL, but to illustrate that the intended CIL target is justifiable given local infrastructure need and is based on appropriate evidence. Further comments on the division between CIL and Section 106 agreements are provided in section 5.

 (iii)       Flood defences

 The key Core Strategy requirement in terms of flood defence infrastructure is the Weston Strategic Flood Solution, required for the collective developments at the Weston Villages.

 This comprises two main elements: the widening of the River Banwell and the creation of a ‘superpond’ on and to the south of Weston Airfield.

 The estimated costs of the combined schemes are £9.3m, of which approximately £2.8m has been secured through existing Section 106 financial or in-kind contributions. This leaves a residual funding gap of £6.5m.

3.         CIL viability assessment

 The CIL regulations require that any proposed CIL has to have regard to “the potential effects (taken as a whole) of the imposition of CIL on the economic viability of development across its area.” This effectively means that CIL rates must not make the majority of Core Strategy development unviable across North Somerset.

 As a Charging Authority, the Council may also set different CIL rates to apply to:

  • Different zones in which development would be situated;
  • Different intended uses of development.

 Any such differential rates must be based solely on economic viability evidence and not for other purposes such as planning policy or regeneration objectives.

In order to fulfil these requirements, North Somerset Council commissioned Dixon Searle LLP to undertake viability testing work to show what levels of CIL charge could be introduced without putting the overall development of the area or delivery of the Core Strategy at serious risk. The Dixon Searle CIL Viability Assessment Report accompanies this consultation document and can be viewed on the North Somerset Council website CIL consultation pages (see www.n-somerset.gov.uk/CIL).  

The viability assessment is based on well-established development appraisal techniques which involve looking at the impact of potential CIL rates on residual land values across different areas and land uses. The appraisals take account of Core Strategy requirements, including the provision of affordable housing where applicable.

Consultation question 3: do you agree with the methodology and key assumptions used in the viability assessment? If not, what alternative methods / assumptions would you suggest, and why?

Consultation question 4: are there other reasons for which you believe that the conclusions of the viability assessment are incorrect? If so, please give details and explain what you believe the conclusions should be.