COUNCILS have been warned that a new levy on development could delay plans to build new offices and homes in Yorkshire’s major cities with a knock on impact on the regional economy.
If approved by the council, the Leeds charges would add around £1m to the cost of developing a typical city centre office block.
The levy is a way for councils to raise money towards services such as roads and schools and partially replaces the discussions authorities have previously had with developers on a case-by-case basis.
Planning Minister Nick Boles yesterday set out plans to give a share of the levy to communities that agree to allow new homes to be built in their areas.
Richard Serra, director at Savills in Leeds and CIL spokesperson for the Leeds Chamber of Commerce’s property forum, said: “While I welcome the fact that the council is proposing to charge less than recommended by their consultants in some areas, I still have serious concerns about the proposals overall.
“In my view, these rates are likely to generate significant opposition not just from the national housebuilders, but also from commercial developers which will limit the number of new homes and offices built in the city. For example, a building roughly the size of “The Mint” in Holbeck Urban Village will attract a CIL liability of nearly £1m which will be difficult for any developer to afford in the current economic climate.”
Leeds City Council’s Development Plan Panel is expected to recommend the start of a public consultation exercise on the charges when it meets next week.
Coun Peter Gruen, executive member for neighbourhoods and planning, said councils were, in effect, being told to introduce the levy and Leeds was engaging with developers to ensure it produced a “realistic charging regime”.
“We understand developers are entitled to make a profit on developments and they need to understand that costs like schools and transport have to be met within the charging system,” he said.
Sheffield City Council is consulting on a charging system that would apply to housing and retail developments but would not have any impact on plans to build offices in the city.
Alastair Reid, chair of the Sheffield Property and Regeneration Committee, said: “We will be seeking clarity from the city council on whether this will be an additional charge to developers. If it is imposed as an additional charge, it will have a detrimental effect to development in the city region.
“If it’s a case of moving the same money around in a different way, then it should make little difference to development and may in fact give less red tape dealing with the various interested bodies.
“Property developers and construction businesses need initiatives from the local authority which support development, not ones which put further hurdles and restrictions on their growth plans.”
Kirklees and East Riding councils are pursuing the idea and York, Bradford, Kirklees are also considering its introduction but Doncaster Council has already rejected the idea out of hand.
Peter Dale, director of regeneration and environment at Doncaster Council, said: “We have considered introducing a Community Infrastructure Levy and decided that in the current economic conditions it is not likely to deliver large sums for community infrastructure.
“We also feel that at present it might discourage developers from investing in Doncaster, which prides itself as a borough which is open for business. We will keep the situation under review.”
Mr Boles yesterday told the Yorkshire Post he was pleased at the debate taking place in the region over CIL as he suggested the levy could be a way to persuade more communities to accept house building on their doorsteps.
“Local circumstances vary, and the judgment about what is the right rate – and whether it’s even appropriate to have a CIL at all – is best taken locally,” he said.
“And sure, if you’ve got an area that’s had economic difficulties in the past, and is very keen to attract developments and new business, it is entirely legitimate for them to say we’re not going to have a CIL at all. They’ll have to think of other ways to fund infrastructure, (but) it’s absolutely right that they should make those decisions.
“I also think it’s right that in the process of setting the rate, that the Chamber of Commerce should take a view and there should be a local debate. Is it going too far? Is it not going far enough? Should we delay a little bit?
“These are all the kinds of conversations that we want to see happening locally. I don’t have any problem with any of that, and I hope that all councils will consult very widely, will listen very carefully to their business communities – but there is a balance to be struck.”