The Planning Advisory Service (PAS) website has a frontrunners programme of 21 local authorities implementing CIL, seven out of the eight original frontrunners have now published draft charging schedules, although these are again mainly southern England Councils. Redcar and Cleveland Borough Council were in the second phase of Frontrunner Authorities, but decided following advice from consultants not
45
to proceed with implementing CIL. This reflects the much greater progress in
implementation in the south of England compared to other areas, there is now some progress across the country yet the North East region of England has been the least active with only Durham and Newcastle/Gateshead progress CIL in any official way.
The PAS has identified several lessons that can be learnt from the Frontrunners, the need for political support as well as evidence, CIL shouldn’t be considered in
isolation it is part of a wider policy context, it was important to engage with
stakeholders especially landowners and developers, it was about delivery, there was still many misunderstandings about the policy. That it was a Corporate project of the local authority and not just a planning project, and that other parts of the Council needed to be involved such as education, social services etc.
In January 2014 Savills supported by the HBF, produced “CIL – Getting it Right”
(Savills and Federation, 2014) which looked at issues around the implementation of CIL, they reflected much of the guidance of the Harman Report and again argued that the viability equated to delivery and that level of the TLV was also critical in this respect as shown in figure 2.2.
Figure 2.2 Diagram from CIL Getting it right (Savills and Federation, 2014)
46
The report suggested that within an overall level of viability sometimes policy choices may have to be made by local authorities, similar to the point about cumulative policy burden. An important element of this could be between strategic infrastructure
provision funded from CIL and affordable housing provision funded from s106
planning obligations. Savills went on to say there was a three way trade-off between CIL, s106 and affordable housing, the report also stressed the need for a viability buffer to ensure a future supply of land coming forward to reflect the risks and costs involved in promoting land through the planning system. The setting of the
Benchmark or threshold land value whilst difficult was crucially important. The report also set out that local context was also crucial and the priorities between policy choices.
Other issues that have become apparent from the implementation of the CIL policy is the concern about the mismatch in timing between infrastructure provision and the development activity, the lack of certainty in this respect was also an issue, this reflects the rational nexus issue referred to above. The duty to cooperate between local authorities was also considered important in terms of deliverability of Local Plans and in the provision of infrastructure with again the boundaries being an issue and the hypothecation issue of mismatch between collection and spend.
The NPPG from March 2014 set out four principles of Viability in Planning, evidence based judgement by sharing evidence and using a transparent process, understand past performance, based on a realistic operation of the market and past delivery of policy obligations, collaboration with stakeholders and a consistent approach based on a comprehensive understanding of viability issues. This in summary sets out the challenge to local authority planners for the implementation of CIL, with viability at the heart of its implementation.
These comments reveal that the policy is linked to growth and requires a degree of judgement to be applied, rather than a specific formula applied, as much uncertainty is involved. This also further supports the view that the use of multiple knowledge sources to support decision making is at the heart of the implementation of this policy, especially in making decisions about the assessment of viability and of setting CIL rates.
47 2.12 Conclusion
There are a range of broad issues that emerge from this consideration of the history and policy context of value capture as a policy in the UK Planning System. Returning to the five point framework developed from (Oxley 2004b) used earlier to consider the other mechanisms of betterment taxes and planning obligations, this is now used to consider the latest policy CIL.
Firstly, the hypothecation issue, is potentially a challenge with CIL as a policy, as the collection of CIL funding and the need for the spending are not necessarily
particularly well matched spatially. The match between collecting the funding and the certainty of spend when needed is another concern, the rational nexus issue, or the potential mismatch temporally. Even the issue of double counting is part of this concern, in fact the question of where the funding is to be spent and when are a key area of discussion in the policy and key to governance of the Policy.
Secondly, the sharing of the value, the setting of the rate so that various actors will be able to support the CIL, this is also a key arena for discussion between the actors, terms such as striking the balance and cumulative policy burden reflect this area of dispute. But it is also about which actors benefit and which lose from the policy which isn’t as simple as the sharing of any economic rent or development value released, but has wider policy implications.
Thirdly, the perception of the CIL as the latest mechanism, after the criticisms of other policy mechanisms, does CIL have predictability, certainty, speed,
transparency, simplicity, flexibility, efficiency and fairness. This is an area to be considered in the research as well, it was promoted as having benefits in these areas but it is unclear whether that is really the case. In any event the retention of Planning Obligations has not assisted the overall position in this respect. The changing basis of justification, from capture of value explicitly as a national betterment tax to a more implicit capture of value to fund infrastructure for specific items to support growth is also an important change in perception.
Fourthly, the calculation of the development value or economic rent, a challenging problem even on a site by site basis, when this is averaged out spatially it becomes more problematic. The difficulty of establishing boundaries, the averaging having
48
variable impact on development viability across individual sites, the whole issue of future policy assumptions and the differing guidance on this. The assumptions within the area based appraisals and the evidence used to support those assumptions, the methodology and appraisal software used, these are all areas of potential dispute within the governance of the CIL policy, in calculating of the development value available to be captured.
Finally, the CIL as a policy within the wider policy context, the position in relations to the other value capture mechanism such as Planning Obligations is key, but also in relation to other policy proposals. CIL interacts with other policies in its
implementation especially those about funding and delivery of infrastructure. The CIL is presented as a policy to support growth and to remove barriers to growth, to impact on behaviours of actors and their decision making in this respect. The
research into CIL has had to consider its governance, this includes the skills and role of local authority planners, the use of consultants, the consultation and engagement process and the relationships between the actors involved in the CIL policy making process.
Having considered the history and policy context in the area of value capture as background of how we have got where we are today, it is now appropriate to
consider some of the wider theoretical background to value capture and its role within planning and how this also frames the current policy position.
49