BOROUGH OF POOLE ECONOMY OVERVIEW AND SCRUTINY COMMITTEE 14 SEPTEMBER 2015

Transcription

1 CABINET 3/11/2015 FOR INFORMATION BOROUGH OF POOLE ECONOMY OVERVIEW AND SCRUTINY COMMITTEE 14 SEPTEMBER 2015 COMMUNITY INFRASTRUCTURE LEVY GOVERNANCE ARRANGEMENTS: REPORT OF THE HEAD OF PLANNING AND REGENERATION INCLUDING BUILDING CONSULTANCY SERVICES PART OF THE PUBLISHED FORWARD PLAN YES/NO STATUS (Strategic, Service Delivery Information) 1. PURPOSE 1.1 To propose a preferred approach for the governance arrangements and allocation of funds collected through the Community Infrastructure Levy (CIL). 2. RECOMMENDATION 2.1 That Members recommend to Cabinet approval of the proposed governance arrangements with any minor changes to be delegated to the Head of Planning and Regeneration Services including Building Consultancy. 3. BACKGROUND/INFORMATION 3.1 The Council adopted the CIL Charging Schedule on 18th September 2012 with it coming into effect on 2nd January With CIL now operational and monies having been collected it is important to establish the CIL governance arrangements with regards to how these monies can be spent. 3.2 The CIL Regulations 2010 (as amended) provide guidance on how the CIL monies can be spent and can be best summarised as follows: 5% of total CIL receipts can be used to finance the administrative expenses of the levy which could include ongoing functions like establishing and running billing and payment systems, enforcing the levy, the legal costs associated with payments in-kind and monitoring and reporting on levy activity. The Charging Authority (Borough of Poole) is permitted to operate this 5% admin fee as a rolling year-on-year cap until 31st March 2016 at which point any remaining allowance will transfer to the main CIL pot for use on capital infrastructure projects as defined by the Regulation 123 List. As of 1st April 2016 the 5% admin fee will operate as a fixed in-year cap with any remaining allowance at the end of the financial year transferred to the main CIL pot. 1

2 25% of total CIL receipts (within the area defined by the boundary of a Neighbourhood Forum) are available to a Neighbourhood Forum if they have an adopted Neighbourhood Development Plan. 15% of total CIL receipts are available to neighbourhood areas, or Neighbourhood Forums where no Neighbourhood Development Plan is in place. This figure is restricted to a cap of 100 per Council Tax dwelling per year (see Appendix A). It is the responsibility of the Charging Authority to define these neighbourhood areas. 70/80% of total CIL receipts (depending on the aforementioned neighbourhood portion) are to be spent on capital infrastructure projects as defined by the Regulation 123 List which consists of: Twin Sails Core Scheme Upton Farm SANG Other SPA mitigation not linked to a specific site Hamworthy Bridge School places (Early Years, Primary and Secondary Phases) Strategic Flood Defences Cell 4 (as defined by 2010 Flood Risk Management Strategy) Highways Agency A31 strategic network upgrade (now no longer required to be funded from CIL) Public open space improvement projects and community sports and leisure facilities Our streets and spaces public realm projects 3.3 It is considered best practice to operate separate CIL pots for the different portions mentioned. With the division of CIL funds into separate pots the following proposed preferred approach is broken down into these separate funding pots. Administrative Expenses 3.4 When CIL monies are received by the Council 5% of every CIL receipt can be used to finance the administrative expenses of the levy. An existing agreement is in place whereby this 5% is cost coded by Financial Services to Planning and Regeneration Services including Building Consultancy. The decision on the spending of this money is then made by the Service Unit Head of Planning and Regeneration Services including Building Consultancy. This is the existing approach used to govern this portion of the CIL funds and the continued proposed approach going forward. Neighbourhood Portion 3.5 The CIL Regulations 2010 (as amended) state that a Neighbourhood Forum or neighbourhood area are entitled to 15% of the CIL receipts for chargeable development carried out within their area. This increasing to 25% when a Neighbourhood Forum has an adopted Neighbourhood Development Plan in place. This neighbourhood portion is to be spent on; 2

3 the provision, improvement, replacement, operation or maintenance of infrastructure; or anything else that is concerned with addressing the demands that development places on an area. 3.6 It is important to note that the neighbourhood portion can be spent on a far wider range of infrastructure than the Council is able to do so with the 70% or 80% that it retains to be spent on capital projects. The inclusion of the second bullet point above basically allows neighbourhoods to spend the money on virtually anything that can be linked to addressing the demand that development places on an area. National Planning Practice Guidance with regards to CIL states that Neighbourhood Forums can use some of the neighbourhood pot to develop a Neighbourhood Development Plan. 3.7 As the Charging Authority, Borough of Poole is required to retain the CIL money and should engage with Neighbourhood Forums/neighbourhood areas as to how best spend the funding in that area on their behalf. It is the duty of the Charging Authority to effectively engage with neighbourhoods in a clear and transparent way through existing community consultation and engagement processes. 3.8 As the Charging Authority it is the responsibility of the Borough of Poole to determine how neighbourhoods are defined for the purpose of allocating the neighbourhood portion of CIL. This is a simple task when it comes to the allocation of funds regarding the Neighbourhood Forums (Broadstone and Poole Quays). It is proposed that the 15% of CIL funds within the boundary of a Neighbourhood Forum, or 25% upon adoption of a Neighbourhood Plan, will be separately identified and recorded by Financial Services and Planning and Regeneration Services including Building Consultancy. The Neighbourhood Forum can then put forward their proposal for the spending of the funds to Planning and Regeneration Services including Building Consultancy. At present both Neighbourhood Forums have had spending signed off for the production of their respective Neighbourhood Development Plans by the Planning Policy and Implementation Manager. However, when it comes to spending on actual infrastructure needs this is to be approved and signed off by the Service Unit Head of Planning and Regeneration Services including Building Consultancy. 3.9 The Government does not prescribe a specific process for agreeing how the neighbourhood portion should be spent but the use of neighbourhood funds should match priorities expressed by local communities, including priorities set out formally in neighbourhood plans. With regards to Neighbourhood Forums it is foreseeable that the Council s priorities will align with those of the Neighbourhood Forum. However, there may be cases where there is a disagreement between both parties and in these instances disputed allocations should be referred to the Chief Executive for a final decision upon request from the forum. It should be noted that this dispute resolution procedure should only be used in exceptional circumstances with hopefully all 3

4 of the Neighbourhood Forum funding being signed off by the Service Unit Head of Planning and Regeneration Services including Building Consultancy With regards to the rest of the Borough that is not covered by Neighbourhood Forums the CIL Planning Practice Guidance stresses that existing community consultation and engagement processes should be used in deciding how the neighbourhood portion will be spent. At present sub-committees and working parties are an effective tool used by the Council for decision making and engagement purposes. The proposed approach put forward for the allocation of the neighbourhood portion based on this guidance and approaches adopted by other Charging Authorities is to form a CIL Neighbourhood Portion Working Party to carry out this function. It should be noted there is no time limit on the spending of the neighbourhood portion, but this needs to be justified Through the CIL Neighbourhood Portion Working Party the areas of Poole not covered by Neighbourhood Forums will have their CIL funds managed by this rest of the Borough working party (see Appendix B) made up of Councillors with representation from across the Borough. Councillors can put forward their proposals for CIL funded projects in their respective wards and the working party as a whole can decide upon the priority of these projects and where the CIL funds will be allocated. Through discussions with local people and Council Officers it would be the Councillors responsibility to establish what infrastructure needs there are in their ward. Representatives from the Borough s Neighbourhood Forums should also form part of the group to ensure that any cross boundary needs between Neighbourhood Forums and Wards can be discussed and resolved where necessary Having decided upon the allocation of funds towards the appropriate projects the CIL Neighbourhood Portion Working Party shall put forward their proposals to Planning and Regeneration Services including Building Consultancy. The proposal will then be signed off by the Service Unit Head allowing the release of funds by Financial Services for their spending. Regulation 123 List 3.13 As previously stated 70/80% of total CIL receipts (depending on the aforementioned neighbourhood portion) are to be spent on capital infrastructure projects as defined by the Regulation 123 List which currently consists of: Twin Sails Core Scheme Upton Farm SANG Other SPA mitigation not linked to a specific site Hamworthy Bridge School places (Early Years, Primary and Secondary Phases) Strategic Flood Defences Cell 4 (as defined by 2010 Flood Risk Management Strategy) Highways Agency A31 strategic network upgrade (now no longer required to be funded from CIL) 4

5 Public open space improvement projects and community sports and leisure facilities Our streets and spaces public realm projects 3.14 To provide an adequate system of CIL governance and alignment of funding the Council has a structure in place which identifies priorities for infrastructure delivery. This will ensure that the Council can direct and pool secured contributions to deliver the critical infrastructure required to facilitate growth. Infrastructure & Mitigation Required by European Legislation 3.15 The infrastructure funding which takes first priority, after the allocation of the administrative expenses and neighbourhood portion, is infrastructure required by European Legislation to mitigate the impact of development on Poole s European and Internationally designated sites of Poole Harbour Special Protection Area (SPA) and Ramsar site, Dorset Heathlands SPA and Ramsar site and Dorset Heaths Special Area of Conservation (SAC). With regards to the Regulation 123 List these consist of the Upton Farm SANG and Other SPA mitigation not linked to a specific site At present the Upton Farm SANG is being delivered and forward funded from the Growth Deal. There is still an expectation that this will ultimately be financed from CIL contributions. The funding for the Poole Harbour SPA and Dorset Heathland are set at a per dwelling rate. These CIL contributions will be released upon completion of each development by Financial Services. Strategic Infrastructure 3.17 Strategic infrastructure are those projects and works required to accommodate the growth aspirations set out in the Core Strategy and therefore identified in the Regulation 123 List Due to funding pressures expected over the plan period and beyond, it is essential that the Council directs any available residual CIL finance (which are available after being apportioned to the administrative expenses, the neighbourhood portion, and the delivery of infrastructure & mitigation required by European legislation) to the delivery of the critical strategic infrastructure projects. Therefore, the Council will allocate available CIL finance to deliver (either in isolation or as part of a funding package) strategic infrastructure identified in the Poole Infrastructure Programme (PIP) in the order of priority as follows: : These are projects identified in the PIP which are critical to support growth. Such projects will comprise among other things strategic transport networks (including mitigation measures for the Strategic Road Network), new Town Centre and other Strategic Flood Defences, Education, Green Infrastructure and Built Recreation Facilities. Other Strategic Infrastructure: These are projects identified in the PIP which assist in the delivery of growth to create attractive and sustainable 5

6 communities. Such projects will comprise enhancements to the public realm, community renewable energy facilities, community facilities and infrastructure which is being delivered by other providers The specific infrastructure projects required to accommodate growth in the Borough are identified as either Infrastructure & Mitigation Required by European Legislation, Neighbourhood Infrastructure, Critical Strategic Infrastructure or Other Strategic Infrastructure in the PIP. The infrastructure hierarchy will provide governance for the Council to distribute CIL and any other planning obligations collected from development towards delivery in line with identified priorities and legislative requirements The following table identifies the classification of the Regulation 123 List with regards to the infrastructure hierarchy: Regulation 123 List Twin Sails Core Scheme Upton Farm SANG Other SPA mitigation not linked to a specific site Hamworthy Bridge School places (Early Years, Primary and Secondary Phases) Strategic Flood Defences Cell 4 (as defined by 2010 Flood Risk Management Strategy) Highways Agency A31 strategic network upgrade Public open space improvement projects and community sports and leisure facilities Our streets and spaces public realm projects Infrastructure Hierarchy Infrastructure & Mitigation Required by European Legislation Infrastructure & Mitigation Required by European Legislation Other Strategic Infrastructure 3.21 It has been agreed that all CIL monies received (after the removal of funds for administrative expenses, neighbourhood portion, and infrastructure provision required by European legislation) are to be allocated to fund the repayment of the forward funding for the Twin Sails Bridge. These funds will become available once the aforementioned deductions have been made to the prioritised funding sources at which point the remaining CIL funds for an application shall be able to be released by Financial Services for their repayment of the Twin Sails Bridge forward funding. 4. FINANCIAL IMPLICATIONS 4.1 The allocation of CIL funds clearly has significant financial implications with regards to infrastructure provision. This is felt most heavily with regards to the repayment of the Twin Sails Bridge forward funding. In the Regulation 123 List this is referred to as the Twin Sails Core Scheme. The total sum to be repaid 6

7 amounts to 9,960,000 and the breakdown of the funding repayments can be seen in the table below: Year Total Repayment Funded by JJ To be Funded by Gallagher CIL 2013/14 1,000, , , /15 1,456, , , /16 3,076, ,899 2,576, /17 3,389, ,899 2,889, /18 1,036, , ,792 Total 9,960,000 2,489,596 7,470, With this phasing of CIL funds in mind the table below shows the projected CIL income over the course of this period. These projected incomes are based on calculations made in July 2012, 6 months prior to the implementation of CIL: Year Projected CIL income Remaining CIL funds Projected CIL income (18.5% fall off) Remaining CIL funds 2013/14 259, , , , /15 3,357,269 1,801,501 2,736,174 1,468, /16 4,646,194 2,494,355 3,786,648 2,033, /17 4,372,194 2,346,871 3,563,338 1,912, /18 4,449,656 2,387,595 3,626,469 1,945,963 Total 17,084,988 9,169,974 13,924,264 7,473, As this table shows the Borough can afford an 18.5% fall off in collections on the projected CIL income to still fulfil the necessary funding to repay the Twin Sails Bridge forward funding by April Since its implementation in January 2013 up until 31st March ,139, has been collected through CIL in the Borough. The collection rate is slower than was originally anticipated. Financial Services have developed a strategy for repayment and this will be reported in full to Council Efficiency and Effectiveness Committee in November Furthermore, since the projections were made in July 2012 a self build exemption has been introduced by government. This means that any applicant who is building their own home to live in upon completion, or contracting builders to do that work for them, can claim full relief from paying the calculated CIL liability for their application. This is on the proviso that they live in the property for at least 3 years from completion of the dwelling amongst a number of other provisos. 5. LEGAL IMPLICATIONS 5.1 The proposed governance arrangements must be in accordance with CIL Regulations 2010 (as amended) and national Planning Practice Guidance. 7

8 6. RISK MANAGEMENT IMPLICATIONS 6.1 An agreed upon set of governance arrangements would provide the Council with certainty over the allocation of CIL funds. 7. EQUALITIES IMPLICATIONS 7.1 With regards to the neighbourhood portion the Council should engage with the communities where development has taken place and agree with them how best to spend the neighbourhood funding. The Council should set out clearly and transparently their approach to engaging with neighbourhoods using their regular communication tools. The use of neighbourhood funds should therefore match priorities expressed by local communities, including priorities set out formally in neighbourhood plans. 8. CONCLUSIONS 8.1 With CIL now fully operational it is important to have governance arrangements in place with regards to the allocation of CIL funds. This is with particular regards to the neighbourhood portion through the creation of a CIL Neighbourhood Portion Working Party to decide upon the spending of CIL funds for the 15% neighbourhood portion attributed to the rest of the Borough area not covered by Neighbourhood Forums. STEPHEN THORNE HEAD OF PLANNING AND REGENERATION SERVICES INCLUDING BUILDING CONSULTANCY Contact officer: Luke Bennett x3062 or Nigel Jacobs x3328 in Planning and Regeneration List of Appendices APPENDIX A 15% Council Tax Cap by Ward ( 100/Council Tax dwelling/year) APPENDIX B Neighbourhood Portion by Rest of the Borough Map 8

9 APPENDIX A 15% Council Tax Cap by Ward ( 100/Council Tax dwelling/year) Ward Council Tax Dwellings (October 2014) CIL Cap per annum for 15% Alderney 4, ,700 Branksome East 2, ,600 Branksome West 3, ,000 Broadstone 4, ,900 Canford Cliffs 5, ,000 Canford Heath East 2, ,900 Canford Heath West 2, ,400 Creekmoor 4, ,800 Hamworthy East 2, ,100 Hamworthy West 3, ,600 Merley & Bearwood 4, ,700 Newtown 5, ,900 Oakdale 4, ,100 Penn Hill 5, ,700 Poole Town 5, ,700 Parkstone 5, ,300 Total 67,514 6,751,400 9

10 APPENDIX B Neighbourhood Portion by Rest of the Borough Map Broadstone NF REST OF THE BOROUGH Poole Quays NF 10