Planned office block tax slashed

Councillors yesterday recommended developers should be charged £40 per square metre for new office developments in the centre of Leeds, in contrast to the £90 put forward earlier this month.

Sheffield City Council is likely to set a zero rate for city centre offices but charge for shops and housing, while Doncaster Council has ruled out imposing the tax on  any kind of development in the town.

Known as the community  infrastructure levy, the tax is a new way for councils to raise money from developers of new offices, shops and houses to help pay for roads, schools and other services.

Coun Peter Gruen, Leeds City Council’s executive member for neighbourhoods and planning, said: “We acted following some representations made by the chamber, by developers and housebuilders and others and it is certainly right to listen because it was an early draft charging schedule and this has still to go out to consultation.”

Business groups had pointed out that the original charging scheme would have added around £1m to the cost of building a typical office block, making many developments unviable in the current economic climate.

Councillors in Leeds were yesterday warned that setting a £90 rate was likely to make building offices in the city significantly more expensive than elsewhere.

Neighbouring authorities are likely to follow Sheffield’s example and set a zero rate for city office blocks while Birmingham will charge £55 and Newcastle up to £64.

Coun Neil Taggart, chairman of Leeds City Council’s development plan panel, said: “As the years go by we will be able to review this charging scheme.

“It is important we have development and jobs and therefore to me that is more important than charging £90 which is what we were considering.

“I think £40 is a sensible  suggestion that has now come forward.”

Under the plans discussed yesterday, developers building houses or apartments in the centre of Leeds will be charged £5 per square metre, rising to £90 on land in the city’s popular northern suburbs.

Larger out-of-town shopping schemes will attract a £248 per square metre charge falling to £158 in the city centre.

The Government has suggested communities should be allowed to keep a share of the levy if they agree to house-building in their areas.

The money would be handed over to neighbourhood groups or parish councils to spend on new facilities for local people.

Nicknamed “Boles bungs”  after Planning Minister Nick Boles, the Government sees  the idea as a way of overcoming local opposition to house schemes which is regarded as a major brake on efforts to meet the nationwide demand for new homes.

It mirrors an approach sometimes taken by wind farm developers to create a fund paid for by the scheme to bring benefits to nearby communities.

Among Yorkshire councils, Leeds and Sheffield are the  most advanced in terms of introducing the community infrastructure levy with East Riding, Kirklees, Bradford and York  also known to be looking at the idea.

In Leeds, the proposals will now be considered by the council’s executive board of senior councillors before the public is given the chance to have a say.