CIL Knowledge Introduction Long term Strategic Planning Carefully calculated needs assessments Business Cases Options appraisal Building political consensus Delivery routes Working with private providers ID: 1027469
Download Presentation The PPT/PDF document "www. pas.gov.uk The Direct Financial Im..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
1. www. pas.gov.ukThe Direct Financial Implications of PlanningCIL Knowledge
2. Introduction
3. Long term Strategic PlanningCarefully calculated needs assessmentsBusiness CasesOptions appraisalBuilding political consensusDelivery routesWorking with private providers2. Opportunism&
4.
5.
6. THE COMMUNITY INFRASTRUCTURE LEVY
7.
8. Business Rates collected+Business Rates – Why promote growth?Before…NNDR Funding levelLocal share levelAllocated to local authority
9. Business Rates collected+Business Rates – Why promote growth?Now…NNDR Funding levelLocal share levelAllocated to local authority+
10.
11. How to Model the Financial Benefits of Planning & Growth
12. Community Infrastructure Levy (CIL)Net additional floor space in square metresCIL RateSet by the Council; Charging Schedule will determine rates by usePayable CIL
13. 3 key points to remember:CIL is a one-off payment, payable by the developer at the beginning of a development (following planning permission).Replacement floor space & affordable housing do not pay CIL.Planning obligations cannot be collected to pay for items in the Reg 123 list Community Infrastructure Levy
14. Example3,000 sqm of new retail floorspaceX £100 per sqm (your CIL rate for retail)= £300,000 CIL!Development & CIL Community Infrastructure Levy
15. New Homes Bonus (NHB)Number of homesPrivate:£1,4442013/14 National Average Band D Council Tax RateAffordable:£1,794+ £350 supplement6
16. 3 key points to remember:New Homes Bonus payable from Central Government to a Council is calculated based on net increases to the Council Tax base;New Homes Bonus is an un-ringfenced funding stream;NHB is paid for six consecutive years. New Homes Bonus
17. Examplea) 100 units of market housing x £1444 x 6 (years)b) 100 units of affordable housing x £1794 x 6 (years) (a) + (b) = £1.73m Total NHBDevelopment & NHB New Homes Bonus
18. Business Rates – how they’re calculatedTotal Rateable value of property is £100k0.471NNDR MULTIPLIERPayable Business Rates = £47.1k
19. Business Rates Retention (NNDR)Proportion to Central GovernmentPayable Business Rates (RV*0.471)Proportion to Upper Tier authority% retained by Local Authority
20. 3 key points to remember:Different uses get different Rateable Values (RV). RVs are set by the Valuation Office Agency, and are reviewed every 5 years.Business Rates are an un-ringfenced, on-going funding stream, and are payable annually; Housing does not pay business rates. Business Rates Retention
21. Example – London Borough1) £100,000 x 0.471 = £47,100 Payable Business Rates2) £47,100 – 50% = £23,550 “Local Share”3a) £23,550 x 40% = £9,420 Paid to upper tier3b) £23,550 x 60% = £14,130 Retained by Local AuthorityDevelopment & NNDR Business Rates Retention
22. CILNHBNNDR Financial benefits over time
23. Finance as a Material Consideration in Planning Decision
24. e.g.Plan policiesPrevious appeal decisions Case lawLoss of sunlight / overshadowingCapacity of physical infrastructureWhat is a Material Consideration
25. When should a ‘local finance consideration’ be taken into account as a material planning consideration?Whether or not a ‘local finance consideration’ is material to a particular decision will depend on whether it could help to make the development acceptable in planning terms.
26. Example 1City in South West UK Master Plan Delivery Programming
27. Ten strategic sites; unviable without interventionFuture prospects of main city as regional growth centre under threatOutlying housing sites capable of subsidising cityNeeded to understand medium to long term planning and financial optionsThe Scenario
28. Income from Growth – by type2013-182019-2024 Whole Council£108,000,000£101,500,000 CIL £4,000,000£3,000,000 NNDR £37,000,000£62,000,000 NHB £23,000,000£12,000,000 CT £42,00,000£23,000,000 S106 £2,000,000£1,500,000
29. Clear understanding of cash flowInformed decisions on release of assetsUse of asset receipts to ease cash flowInfluenced CIL rate settingInformed successful funding applications The Implications
30. Example 2Local Authority in Urban Growth Area 1:Strategic Infrastructure Investment
31. Desire to use infrastructure investment to drive development growthImmature approach to capital prioritisation No major strategic infrastructure prioritiesThe scenario
32. Income from Growth – by type2013-142015-20242025-20342035-2044 Whole Borough £13,239,915 £137,087,736 £128,665,536 £137,613,160 CIL £4,042,752 £48,145,998 £38,146,752 £34,412,028 NNDR £1,946,535 £15,659,223 £47,859,440 £61,969,274 NHB £2,033,934 £33,587,776 £27,805,634 £30,903,917 CT £2,614,925 £17,461,796 £9,947,610 £7,835,241 S106 £2,601,769 £22,232,944 £4,906,100 £2,492,700 Total of £416m
33. Income from Growth – by type
34. Income from Growth – by type
35. Business Case for each infrastructure itemPrioritised programme of infrastructure investmentBasis for setting capital investment programme & single regeneration fundThe Implications
36. Example 3Urban Growth Area 2Medium Term Financial Planning
37. 8 major regeneration areasIn process of major outsourcingInformation sought to inform infrastructure investment prioritiesThe scenario
38. CIL & New Homes Bonus TOTAL (to 2031) £345,444,768 CIL £186,954,357 NHB £158,490,411 Area4 9%Area3Area2Area7Area6Area5Area1
39. Business Rates Retention & Council Tax ANNUAL TOTAL (mature development position) 38,836,788 NNDR £12,972,700 Council Tax £25,864,089 Area4Area3Area2Area5Area7Area6Area1Area8
40. A significant proportion of collected Council Tax will be used for payment of increased cost of services.When Council Tax and NNDR income streams are separated, a single large shopping centre shown to provide 97 per cent of all NNDR retained income.Business Rates Retention & Council Tax
41. Informed a departmental outsourcing dealInformed negotiations with Government on major infrastructure investmentRe-prioritised housing estate investment programmeThe Implications
42. Example 4Local Authority in Urban Growth Area 3Informing Public Sector Interventions
43. Site-specific assessments Detailed assessment of ROI from any site-specific interventions, including the cashable impact on wider public financing and regenerationSite residual valuations public finance sources, such as NHB, CIL, Business Rate Retention, etc? implementation planningWhere, when and how is Council intervention likely to have the biggest impact? The Approach
44. Site SelectionProbability of developmentHistory of planning applicationsCost of interventionDelivery/site constraints and issues, such as land ownership, existing lease arrangements, etc.Impacts - blight effect on town centrePotential to have windfall benefits from adjacent development, i.e. gateway sitePotential regeneration impactFinancial return on investment from intervention SITE FOR INTERVENTION FINDINGS
45. FINDINGS STRATEGIC SITE OPPORTUNITIES
46. Site Purchase Residual Valuation (Working Results) All Scenario #1SchemeRLV (£ million)CPO costs (£)Site 1£13,886,468£6,550,865Site 2£5,470,159£1,679,172Site 3£11,809,142£19,128,526Site 4£21,842,095£1,084,097Site 5£27,436,949£2,274,437Site 6£1,508,628£1,285,900Site 7£13,206,476£29,834,933Site 8£10,686,177£18,735,474
47. SITE 2SCENARIO TESTINGSite characteristicsDirectly in front of regeneration site, adjacent to new developmentCurrent use can easily be re-locatedDevelopment partner interest OpportunitiesScenario 1: Office 98% Office, 2% Assembly9,205 sqm officeScenario 2: Mixed-use90% Residential, 10% Retail141 Homes; 1,097 sqm retail
48. SCENARIO TESTING Finance Cumulative Totals YEAR 5YEAR 10YEAR 20YEAR 35NNDR 1,571,085 3,840,452 8,835,037 16,706,044 NHB - - - - COUNCIL TAX - - - - CIL 1,122,600 1,122,600 1,122,600 1,122,600 TOTAL 2,693,685 4,963,052 9,957,637 17,828,644 SITE 2 : Scenario 1: 98% Offices, 2% Assembly & Leisure YEAR 5YEAR 10YEAR 20YEAR 35NNDR 133,069 325,281 748,316 1,414,979 NHB 770,600 1,321,029 1,321,029 1,321,029 COUNCIL TAX 493,500 1,198,500 2,608,500 4,723,500 CIL 131,640 131,640 131,640 131,640 TOTAL 1,528,809 2,976,450 4,809,485 7,591,148 SITE 2: Scenario 2: 90% Residential, 10% Retail
49. 136
50.
51. Re Zoning of central office areaReleasing land buildings for housing conversionNow marketing focusThe Implications
52. Councils are using this information to take informed decision during the plan making and infrastructure investment process.The information is enabling planning and regeneration teams to have productive discussions with senior finance colleagues and members Summary
53. www. pas.gov.ukEnd