1) The levy is unsound because the charging schedule is not credible
Central Bedfordshire Council does not have a Local Plan to use as evidence to support its Community Infrastructure Levy proposal. Current Planning Advisory Service and Planning Inspectorate opinion is there is no legislative reason why Local Authorities can not gain Community Infrastructure Levy approval without having a Local Plan. The Council does not have a Local Plan because its Development Strategy was declared unsound during its examination in February 2015. The Council’s strategy was unsound partly because it failed in its ‘Duty to Cooperate’ with a neighbouring authority. However the examiner explained other reasons why the strategy was unsound. Planning Advisory Service and Planning Inspectorate opinion about Local Plans and their relationship with the Community Infrastructure Levy does not cover unsound Local Plans.
The Council’s Infrastructure Delivery Plan contains evidence the Council is unable to fund in the way it intended the critical infrastructure needed to deliver the Houghton Regis North Strategic Urban Extension. According to the Council’s Development Strategy presented at its examination the Woodside Link Road was to be funded by a Section106 agreement. However the Infrastructure Delivery Plan shows a funding gap of £16.5 million for this road. Failure to secure Section106 funding for the Woodside Link adds weight to the Inspector’s conclusion that the Council’s Development Strategy is unsound.
The Council’s Community Infrastructure Levy proposal does not contain information about the success it has had securing Section 106 infrastructure funding. Neither does it contain an assessment of the outcomes of its affordable housing policy. Community Infrastructure Levy Planning Practice Guidance says these assessments are evidence that should be included in a Community Infrastructure Levy proposal. This evidence aids judgements about the Council’s ability to deliver infrastructure and affordable housing. Planning Practice Guidance about Planning Obligations says the content of Section 106 agreements should be published in the Council’s Planning Register. The Council does not clearly ‘sign post’ how the public can access these agreements if they are in the register.
The Infrastructure Delivery Plan shows the number of expected Section106 contributions needed to fund all its critical infrastructure exceeds the pooling restrictions in the revised Community Infrastructure Levy Regulation 123 that came into effect in April 2015. The plan also shows several projects with zero funding gaps, for example, £100 million of critical road infrastructure to connect the M1to the A6 within the Luton North Strategic Urban Extension. The total funding gap shown in the Infrastructure Schedule Summary is £191 million. It is unrealistic to assume projects will have zero funding gaps. This £191 million gap could increase significantly if there was for example a 15% funding shortfall in all critical infrastructure projects with zero funding gaps. A 15% funding shortfall is credible because the £16.5 million Woodside Link Road funding gap is 40% of the total project cost.
Some essential and desirable projects in the Infrastructure Delivery Plan are to be funded by the Council. This funding will come from the Council’s Capital Budget. As a contract has been signed with Balfour Beatty to deliver the Woodside Link Road the costs of this critical infrastructure are currently being funded by the Capital Budget. This unplanned capital expenditure together with planned expenditure and the prospect of future shortfalls in critical infrastructure funding call into question the Capital Budget’s sustainability as it consists of £13.5 million of high risk Lender’s Option Borrower’s Option (LOBO) loans.
The Community Infrastructure Levy proposal is unsound because the charge for Strategic Urban Extensions is zero and the charges for other parts of Central Bedfordshire are too low. These cannot be credible charges given an unsound Development Strategy, the failure to secure Woodside Link Road funding, unrealistic assumptions about zero funding gaps for infrastructure projects, Section 106 pooling limits, and risks to capital budget sustainability that can only be mitigated by increases in the revenue budget of which Community Infrastructure Levy charging income will be an important part.
The evidence for the levy in the Three Dragons report is not transparent. The evidence does not allow sound judgements to be made about the viability of Strategic Urban Extensions. The public can not assess from the evidence whether a developer’s profits, an important consideration in viability assessment, are at risk if the charge was set above zero. It is not possible from the evidence to assess whether setting a zero chaerge for Strategic Urban Extensions is a policy judgement chosen to encourage development in a particular geographical area or a viability judgement. Community Infrastructure Levy Planning Practice Guidance says the choice of charges should be based on viability not policy.
An often declared advantage of a Community Infrastructure Levy scheme is the areas affected by new development directly benefit from the revenue charges generated by the development. The Council’s Community Infrastructure Levy proposal enables Parishes affected by development to benefit by a minimum of 10% of the charge raised. Clearly a zero charge for the Luton North Strategic Urban Extension does not benefit Chalgrave, Chalton, Sundon, Streatley and Harlingon, the Parishes most affected by it.
2) The levy is unlawful because it is not State Aid compliant
Community Infrastructure Levy Planning Practice Guidance says ‘It is the responsibility of aid givers to reassure themselves that the actions they take are state aid compliant’. A zero charge gives a competitive advantage to developers of Strategic Urban Extensions as developers of land outside these areas have to pay a higher charge. Government Guidance on European Union State Aid Law says ‘State aid is any advantage granted by public authorities through state resources on a selective basis to any organizations that could potentially distort competition and trade in the European Union’. Central Bedfordshire Council has not provided any explanation or evidence their Community Infrastructure Levy proposal is legally compliant with European Union State Aid law.
3) The levy consultation is unlawful because it is not Regulation 11 (1) compliant
There is a significant omission in the Council’s Statement of Representations concerning a ‘statement of modification’. The statement of representations does not include Regulation 11 (1) of the Community Infrastructure Regulations 2010. Community Infrastructure Levy Planning Practice Guidance explains the purpose of Regulation 11 (1). A ‘statement of modification’ should be published that sets out any changes to Community Infrastructure Levy documents after public consultation and before they are submitted for examination.
4) The Planning Obligations Strategy is unsound because it exempts developments of 10 units or less from Affordable Housing obligations
On the 31st July 2015 a High Court ruling on West Berkshire District Council & Reading Borough Council v Department of Communities and Local Government overruled Planning Practice Guidance about the exemption of developments of 10 homes or less from Affordable Housing obligations.
5) The levy is unsound as because it allows ‘vacant building credit’ through exemption from Community Infrastructure Levy charges
The High Court ruling cited in objection 4 also overruled a Ministerial Statement by Brandon Lewis MP in November 2014 on ‘vacant building credit’ exemptions.