Developers could face paying an extra levy towards the costs of schools and roads to finance much-needed infrastructure improvements if they wish to build across a Yorkshire district.
If the new scheme, known as the community infrastructure levy (CIL), is given the go-ahead, Selby District Council hopes it could raise £12m. The moves comes shortly after major plans were backed by councillors in the district for a large scale development at Olympia Park which will deliver more than 800 homes and the £50m development of Selby Marina.
Council leader Coun Mark Crane said: “The district has seen a lot of housing development over the years, but this has not always been matched by supporting infrastructure improvements.
“It’s not a bleak picture; we’ve benefited greatly from the Selby bypass and motorway upgrade to the A1, flood defences have been installed, broadband is being installed, schools have been commissioned, we have our fantastic new hospital, and the new leisure centre is under way.
“But there are still a great many areas where infrastructure is feeling the pressure, and if we are to accommodate the quantity of development set out in our new core strategy, we need to address those pressures.
“This costs money, of course, and in these times of austerity, the council has not got the resources to intervene.
“However, the planning system can intervene because it is only fair that the new development that adds these pressures to our infrastructure pays its own way.
“In the past the council has negotiated with developers for so-called section 106 agreements. These payments contribute towards infrastructure, but are very variable in value. This new community infrastructure levy addresses that by setting out a standard charge per square metre that development must pay. It’s fairer, simpler and faster.”
Public talks are now underway to gather opinions on its proposed new CIL – which will be charged on new buildings to fund improvements to roads, sewers and other infrastructure.
The CIL proposes a charge of £25 per square metre on new housing in the south of the district, and £45 in the north. This means a sum on a typical house of about £2,500 and £5,400, respectively. Supermarkets will pay £110, which means building a small budget supermarket may typically provide £130,000.
The council’s lead member for finance and resources, Coun Cliff Lunn, said: “The CIL sets out the reasonable amount new buildings can afford to pay out of the profits from sale. It is simply that there is more profitability in the north, so they can afford a greater contribution.
“I was initially worried that the CIL charges would simply be added on to the price of a house, making it even harder to get on to the property ladder, or that the charge on employment development would deter investment in jobs.
“However, the experiences of other councils that have already got a CIL in place shows that this is not the case. Instead, the value of land is reduced to free up capital to pay the CIL charge, and this in turn actually stimulates growth.”
The money collected through CIL will be spent on projects not normally addressed through a section 106 (S106) agreement.
A council spokeswoman said: “The S106 system is aimed at very localised improvements and in many cases will still apply to new buildings. But the cumulative effect of lots of individual developments is not captured.
“For example, traffic increase from 10 houses in a village is relatively easily absorbed, but twenty or thirty of these smaller development have a much bigger impact on the main roads when all the traffic converges in the morning rush hour. The new CIL can collect money to make improvements to these so-called strategic infrastructure pressures.”
To take part in public talks, visit www.selby.gov.uk/CIL. The consultation ends on February 28.