The purpose of this report is to update Members on the work that is being done to prepare a CIL Schedule for Swale and seeks approval for publication of a Preliminary Draft Charging Schedule for public consultation.

The Head of Planning Services introduced the report which updated Members on the work that was being undertaken to prepare a Community Infrastructure Levy (CIL) for Swale, and sought approval that a Preliminary Draft Charging Schedule is published for public consultation for six weeks during early Spring 2016. He advised that it was hoped that Swale Borough Council would adopt the CIL and the Regulation 123 list.  He drew Members’ attention to the viability report at Appendix I in the report which outlined the affordable housing rate, and the recommended CIL rate, for the different areas within Swale. He presented a map for Members to view which set out the proposed charging areas.  The Head of Planning Services advised that once the CIL was in place, it was not negotiable, it was impossible to state the likely revenue that would be generated, but it was probably in the region of £50million up to the end of the Local Plan period (2031).  He advised that 15% of this would be transferred to parish councils, and 25% if they had a Neighbourhood Plan in place in both cases where the development occurred in that parish.

The Head of Planning Services explained that the charge rates could be reviewed at any time but would be subject to new viability review and consultation, so would normally be reviewed on a two/three year basis.  He outlined the process of the Regulation 123 list to include infrastructure items for CIL income, however anything on that list could not then be considered for Section 106 Agreement (Section 106) funding.  The list had been compiled through the Infrastructure Delivery Plan, and this had shown that there was a funding gap.  The Planning Advisory Service suggested keeping the Regulation 123 list as confined as possible to leave more scope for requesting Section 106 and Section 278 Agreement (Section 278) contributions.

The Head of Planning Services reported, that after speaking with Kent County Council (KCC), they had urged not to include the Grovehurst Junction for CIL funding as they suggested a Section 278 was a better way to fund this, so he suggested this was not added to the Regulation 123 list.  Also that they recommended splitting the through school project into two, one for primary and one for secondary, as they might need to bring the primary project early as the site developed in order to get use of the school early on.  This would be funded through other sources rather than CIL.  The cost of the through school was around £26million.  He suggested that 80% was pooled for the school itself, and 20% used for smaller schemes in the Regulation 123 list.  He further advised that the Regulation 123 list could be reviewed at any time.

In response to a question, the Head of Planning Services advised that there was an amendment to Table 3.7, to show that extra care and retirement dwellings should be at £125 CIL rate for Faversham and rural areas only.  For Sittingbourne and the Isle of Sheppey it should be zero CIL rate.

A Member asked how Swale compared with adjoining Local Authorities in relation to the CIL charge?  He considered developers would be encouraged to areas where it was cheaper to bring properties forward.

The Head of Planning Services explained that within Kent, there were only two other authorities that had CIL in place, these were Dartford and Sevenoaks.  He explained that these were not necessarily comparable areas to Swale but advised that Maidstone would be going through the CIL process in the future so there could be some comparisons there.

A Member raised concern with the zero rate for affordable housing and retirement homes on the Isle of Sheppey.  He considered this would not entice developers to the Isle of Sheppey, and he considered there needed to be improvements to infrastructure on the Isle of Sheppey.  He also raised concern with the phrasing term used for the money that would go to parish councils and considered that some parish councils would benefit from 25% from CIL, especially in deprived areas on the Isle of Sheppey.

The Head of Planning Services apologised for the terminology that he used, but advised that this was what the regulations required.  He stated that CIL income could be spent anywhere in the Borough, and it was the discretion of the Council where the funding was spent.

The Chairman also advised that Section 106 funding was local to the specific development.

A Member asked for clarification on the CIL funding that went to parish councils; the funding gap; and if we stuck with Section 106s, what would the comparative position be?

The Head of Planning Services advised that the parish council would receive between 15% to 25% of the funding.  The funding gap was around £150million, but this needed to be put in context as to be certain what the infrastructure for the first five years of the Plan was.  From five to 10 years of the Plan there was some assurance that other agencies had involvement, and beyond 10 years was considered too far in the future for Planning Inspectors to be concerned.  He advised that there were other funding streams available as well.  He stated that it was not possible to know what future Section 106s consisted of and that they were specific to the application, so difficult to make a direct comparison.

In response, the Member explained that he was not comfortable with a £150million gap, and adopting the CIL route at this time.  He considered it would leave the Borough short on infrastructure, and should focus on Section 278s for highways.  He did not consider CIL funding was a viable approach of getting money for infrastructure, and that Section 106 funding should remain.

The Chairman explained that if the CIL was not charged, then there was not a fund to chose from; it did not replace the Section 106s, but added to it.  He reminded Members that Section 106s allowed only five planning obligations to secure funding for the same item of infrastructure, and this had to be local to the development.

The Head of Planning Services stated that consultants had advised that CIL funding maximised the Council’s income receipts.  CIL related to schemes where there were more than five developments to pay for the infrastructure, so there were some schemes that would be better funded by CIL than Section 106, and vice-versa.

The Chairman invited Members who were not members of the Panel to speak.

A Member discussed the new proposed school and the importance of ensuring it was deliverable, questioned whether there would be enough CIL coming in and stated that rather than Quinton Road, the school was located more on the Kemsley site.

The Head of Planning Services outlined the amount of works on the site; 1390 dwellings were proposed, with a long time frame for completion, with around a 10-year timescale.  KCC had said they wanted to bring forward the primary school at an early stage, with the secondary school to be programmed in later.  Funding would be not just from CIL but from KCC Government funding, so not all the £26million would be CIL-funded.

A Member raised the following points:  there was an obvious health inequality within the Borough, CIL did not appear to be addressing this; and would like to see money put aside to reduce the inequalities.

The Spatial Planning Manager explained that within the Local Plan process, negotiations with the NHS had taken place to try and identify their needs, and for allocating land for health services.  She explained that it had been a struggle to liaise with the right people and to find what was needed, but she confirmed that it was on the list of requirements.

A Member asked would CIL provide 25% for the entire Faversham Town Council or only that area within the Neighbourhood Plan?; what was the 35% headroom referred to in paragraph 3.6?; and with reference to the table on page 19 of the report, it appeared that there was more CIL funding available than was being claimed.

The Head of Planning Services advised that the Government was adamant that the CIL/affordable housing ratio should not prevent developments from coming forward.  The 35% headroom took into account differing site circumstances and to provide flexibility to ensure viable development would come forward in an area.

The Spatial Planning Manager advised that if the Faversham Creek Neighbourhood Plan was adopted, 25% would go to Faversham Town Council.  It was not clear whether this would have to be spent within the Neighbourhood Plan area or within Faversham as a whole.  The Planning Advisory Service would be able to advise further.

A Member commented that with reference to Government Capital Funding, there was some uncertainty as it was not known what was coming forward.  Funding was not only received from CIL/Section 106, but from public funding as well.

A Member asked if a parish council did not have a Neighbourhood Plan, was it too late to draw one up?;  Was there a risk to the Council of unforeseen costs of CIL?; when would the CIL payments be made: on approval/commencement/what stage of a development or on completion?

The Head of Planning Services advised that new Government regulations stated that CIL funding would normally start at the commencement of a development, but also through phasing, with negotiation with the developer.

In terms of the Neighbourhood Plan, he explained that this could be progressed at any time, normally when the Local Plan was adopted.  There was a risk with the fixed charge element of CIL; CIL was aimed at strategic work, i.e. schools and transport. He stated that Section 106 allowed a scheme to be acceptable in planning terms, and there was a balance to determine the need for housing against specific infrastructure needs.

The Spatial Planning Manager reminded Members that CIL and Section 106 could not be used for the same project.  There was a need to split projects into various elements, related to the delivery schedule of a development, so either added to the Regulation 123 list or Section 106.  If it was too generic it could not be included within a Section 106.

In response to a question, the Chairman advised that viability testing ensured that developers were aware of the charge in each area.

The Chairman drew Members’ attention to Appendix III in the report and moved the following amendments:  to delete the Grovehurst Road junction, as this would be dealt with via Section 278 agreements through the highway agencies; to include the primary school and secondary school as separate projects at Quinton Road; and to delete the word ‘maintenance’ from the last item, to read ‘Open spaces improvement grant scheme’.

This was agreed by the seconder.

A Member requested that a Members Panel be set up to allocate CIL funds and that it be Member-led.

Recommended:

(1)  That the publication of the Swale Borough Community Infrastructure Levy Preliminary Draft Charging Schedule for public consultation be authorised.

(2)  That the Head of Planning Services in consultation with the Cabinet Member for Planning to make minor amendments before commencement of public consultation be authorised.

(3)  That the following amendments be approved:

To delete the Grovehurst Road junction from the draft Preliminary CIL Charging Scheme, to include the primary school and secondary school as separate projects at Quinton Road; and to delete the word ‘maintenance’ from the last item, to read ‘Open spaces improvement grant scheme’.