draft charging schedule - Stoke-on-Trent City Council

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IntroductionNewcastle-under-Lyme Borough Council and <strong>Stoke</strong>-on-Trent City Council have worked in partnershipto produce a Preliminary Draft Community Infrastructure Levy Charging Schedule under theCommunity Infrastructure Regulations 2010 (as amended 2011 and 2012). The <strong>schedule</strong> sets out theproposed rates chargeable per square metre for future residential and retail development across theadministrative areas of both Councils. The Councils now wish to seek your views on the proposedrates. We are particularly keen at this preliminary stage to hear from developers and others involved inthe property industry.What is the Community Infrastructure Levy?The Community Infrastructure Levy (CIL) came into force in April 2010. The levy provides the City andBorough Councils with the option of introducing a charge on new buildings in their area to fundinfrastructure. The money raised by CIL is intended to support future development growth and only toimprove existing infrastructure when it is made worse by new development; CIL cannot be used tosolve existing problems. It is designed to be a predictable charge, levied on all development whereviable, which will not (except in exceptional circumstances) be subject to negotiation.The infrastructure projects or types of infrastructure to be funded from CIL will be determined by eachlocal authority and might include:-• Highways and Transport Improvements;• Educational Facilities;• Health Centres;• Community Facilities & Libraries;• Sports and Recreation Facilities; and• Green InfrastructureOnce the final <strong>charging</strong> <strong>schedule</strong> is adopted, the Community Infrastructure Levy (CIL) will be thepreferred method for collecting developer contributions to fund local strategic infrastructure projects ortypes of infrastructure, largely replacing Section 106 planning obligations.How will it work?The Councils are proposing that a CIL charge will be payable for certain residential and retaildevelopments. This will be dependent on where the development is located within the Borough andCity, the type of use and the amount of floor space created. The charge (in part or full) will be payableonce work on the development is commenced.Most developments measuring less than 100 square metres will not pay the levy (e.g. a smallextension to a house). However, development that involves the creation of a new residential unit (suchas a house or a flat) may be liable for a charge, even if the unit is below 100 square metres in area.This will depend on what <strong>charging</strong> zone the residential unit is located in.The charge will be levied in pounds sterling (£) per square metre. It will be collected, in most cases, asa cash contribution.Further details on the CIL can be found at the planning portal:-http://www.planningportal.gov.uk/planning/applications/howtoapply/whattosubmit/cilPage 1

EvidenceThe Preliminary Draft Charging Schedule is based on the results of a viability assessment (CILViability Assessment - February 2013) undertaken on behalf of the Councils. The report provides anassessment of the viability of the principal categories of development in <strong>Stoke</strong>-on-Trent andNewcastle-under-Lyme and the ability of those developments to make contributions to the CommunityInfrastructure Levy.The study area covers the administrative areas of both <strong>Stoke</strong>-on-Trent and Newcastle-under-LymeCouncils. The assessment first considered the economic sub-market areas for residential andcommercial development within the study area and used these areas as a basis to create differentialCIL Charging Zones. These zones are shown on the maps on pages 5 and 6.The study seeks to assess the ability of different categories of development to make contributions viaa Community Infrastructure Levy. In essence, the study assesses the costs and value of developmentand having made an allowance for a reasonable developers profit return, determines whether anyadditional margin is available for CIL contributions.The CIL Viability Assessment (February 2013) can be found at:-www.stoke.gov.uk/ldfPlease visit the CIL website to see a full list of locations where the documents are available forinspection.Please contact either Planning Policy teams to order a copy of the Viability Assessment. A charge willbe payable.ResultsIn order to set the rates, the viability assessment took into consideration: the viability results; thegeneric nature of the viability tests; the brownfield land supply in <strong>Stoke</strong>-on-Trent and Newcastle-under-Lyme and the need to set rates to allow for any site specific abnormal costs or other planningobligation contributions. Therefore the CIL rates are set accordingly to take account of these unknownfactors. The viability assessment concluded that the variations in residential values across <strong>Stoke</strong>-on-Trent and Newcastle-under-Lyme justify a differential zone approach to setting residential CIL rates.The assessment concluded that a flat CIL rate across the whole study area should be charged forretail development. The assessment concluded that no other forms of development tested couldsupport a CIL charge. The rates proposed are shown on page 3.In setting the levy rates, it is considered that the Councils have struck an appropriate balancebetween:the desirability of funding from CIL in whole or in part the estimated cost of infrastructurerequired to support the development of its area, taking into account other actual and expectedsources of funding, andthe potential effects, taken as a whole, of the imposition of CIL on the economic viability ofdevelopment across its area.Page 2

Community Infrastructure Levy – Preliminary DraftCharging Schedule<strong>Stoke</strong>-on-Trent City Council and Newcastle-under-Lyme Borough Council are both ‘<strong>charging</strong>authorities’ for the purposes of Part 11 of the Planning Act 2008 and may therefore charge theCommunity Infrastructure Levy in respect of development in the City and Borough.Eligible developments for the following uses will be charged:-Residential Rates C3Zone 1 £0 per sq. mZone 2 £20 per sq. mZone 3 £50 per sq. mZone 4 £80 per sq. mRetail Rates (A1-A5)District Wide £100 per sq. m© Crown Copyright. All rights reserved.<strong>Stoke</strong>-on-Trent City Council 100024286 2013.Newcastle-under-Lyme Residential Zones© Crown Copyright. All rights reserved.<strong>Stoke</strong>-on-Trent City Council 100024286 2013.<strong>Stoke</strong>-on-Trent Residential ZonesZone 1 Zone 2 Zone 3 Zone 5Very Low Low Medium HighPage 3

Calculating the chargeable amountThe Councils will calculate the amount of CIL payable (“chargeable amount”) in respect of achargeable development in accordance with the relevant formulae in the Community InfrastructureLevy Regulations (as amended). Further information can be found at:-http://www.planningportal.gov.uk/planning/applications/howtoapply/whattosubmit/cilAre there any exemptions?There are three main types of relief from the levy:-charitable relief – a mandatory exemption for a charity if it owns part of the land, andthe development will be used wholly or mainly for charitable purposessocial housing relief – a mandatory exemption for social housingexceptional circumstances – <strong>charging</strong> authorities have the option to offer relief incases where the levy would have an unacceptable impact upon the economic viabilityof a development.How can you get involved?The Preliminary Draft Charging Schedule and CIL Viability Assessment (February 2013) is subject to asix week period of consultation which will run from 24 June 2013 to 5 August 2013. The purpose ofthis consultation is to seek views on the proposed rates and we specifically want you to consider if ourapproach is fair and reasonable in respect of CIL Government Guidance, April 2013.It is important to note at this stage we are seeking comments focused on the proposed rates and howwe have arrived at them. We are not seeking comments on how the funds will be spent. The details ofwhich infrastructure projects will be proposed for CIL funding and how the process will be managed isto be determined by each Council at a later stage.Please forward any comments you have to the following e-mail address:-cil@stoke.gov.ukPaper copies of representations should be sent to the following address:-Planning Policy TeamCity Renewal Directorate<strong>Stoke</strong>-on-Trent City CouncilCivic CentreGlebe Street<strong>Stoke</strong>-on-TrentST4 1HHAny representations you may wish to make must be received no later than 5.00pm on Monday 5August 2013.Next stepsResponses submitted to this consultation will be used to inform the preparation of a <strong>draft</strong> <strong>charging</strong><strong>schedule</strong> which, it is anticipated, will be published later this year as part of the next stage ofconsultation.Page 4

Newcastle-under-Lyme Residential ZonesPage 5© Crown Copyright. All rights reserved.<strong>Stoke</strong>-on-Trent City Council 100024286 2013.

<strong>Stoke</strong>-on-Trent Residential Zones© Crown Copyright. All rights reserved.<strong>Stoke</strong>-on-Trent City Council 100024286 2013.Page 6

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