Agenda item

To consider a report of the Head of Scrutiny and Member Development, together with receiving a short presentation from GVA Grimley on the methodology that is being applied to their feasibility study on determining viability of sites for development in the city.

Referring to Minute 23 of the meeting held on 20^th July 2012, the Head of Scrutiny and Member Development submitted a report and the Board received a short presentation from GVA Consultants on the methodology that was being applied to their feasibility study on determining viability of sites for development in the city.

Appended to the report was a copy of a document entitled ‘ Leeds Community Infrastructure Levy – Update on progress and the commissioning of the Leeds Economic Viability Study – Report of the Director of City Development’ for the attention of the Scrutiny Board.

The following representatives were in attendance and responded to Members’ queries and comments:

-  Mr Dale Robinson, GVA Consultants

-  Mr Steve Speak, Deputy Planning Officer, City Development

-  Ms Lora Hughes, Principal Planning Officer, City Development

At the request of the Chair, Mr S Speak introduced the report of the Director of City Development. He explained the background of CIL and referred to the procurement process which had led to the appointment of GVA consultants who were carrying out a feasibility study to determine the viability of sites for development in the city. This study was required as part of the process for the introduction of the Community Infrastructure Levy in 2014. He confirmed the consultant’s fee for this work in response to a question from a Member of the Board.

A copy of GVA’s presentation slides were circulated at the meeting.

In his presentation, Mr D Robinson covered the following three specific issues:-

• Providing a brief overview of the Community Infrastructure Levy (CIL)
• Outlining the purpose of the Economic Viability Study (EVS)
• Outlining Emerging Results

In summary, specific reference was made to a number of issues including:

• Clarification of the membership of the LCC Steering Group and their remit

(The Deputy Chief Planning Officer responded that this was an officer group and would provide information to various groups on the Council including this Scrutiny Board)

• Concern that affordable housing was currently outside CIL and the Government was still deliberating on this issue
• The definition of “meaningful” in the proportion of CIL that must be passed back to the neighbourhood in which the development took place
• The overall approach in testing representative samples of development typologies across a range of use classes

(The consultant advised the Board that this approach was based on guidance issued by the Royal Institute of Chartered Surveyors)

• The consultant’s range of assumptions based on their development scenarios that would determine a site value would in some circumstances be less than a developer had paid for that site

(The consultant responded that clearly in these circumstances the developer had paid too much for the land and this was not their concern in terms of testing current market value)

• It was recognised that future planning obligations would have an impact in reducing land values, but the RICS guidance was that these costs should not be set at a level which stops land coming forward for development
• The fact that landowners still have in their mind land values at 2007 prices and that it would take time for perceptions to change in the light of the current economic climate 
• Clarification as to whether developers would be able to challenge the Community Infrastructure Levy charging schedule once it had been established

(The consultant responded that it would be a fixed cost per metre and could not be changed once adopted, although the Council could choose to undertake the whole process again if monitoring showed it was necessary, e.g. an improvement or decline in the economy. The Deputy Planning Officer stated that clearly the report that would come forward to the Council for consideration of a proposed CIL charging schedule would offer a range of options and it would be for Members to determine the rates to be set which balances the income to be achieved against ensuring that land continued to come forward for development. He also commented that before the final rates were adopted there were a further two rounds of consultation with developers and the public and an independent examination)

• The need for sensitivity testing to be undertaken in relation to anything which reduced site values by more than 25% which could render sites not being released for development, especially for green belt sites and where sites were already owned by developers

(The Deputy Planning Officer responded and informed the meeting that sensitivity testing would be undertaken on this 25% figure)

• The need for Board Members to be provided with an A3 coloured copy of the map showing boundaries of housing characteristic areas

(The Board’s Principal Scrutiny Adviser agreed to circulate this to Members of the Board)

• Clarification as to whether the CIL zones boundaries for residential have to be the same as those of the housing characteristic areas

(The Deputy Planning Officer responded that broadly they would be the same but there would be the opportunity to modify boundary anomalies and in particular to base them on physical attributes)

• Reference to the fact that the Council could opt for differential rates based on uses and geographical location rather than single rates but all differential rates would have to be based on viability evidence not policy objectives
• Clarification of the impact of Section 278 in relation to highway issues

(The Deputy Planning Officer responded and informed the meeting that under the new arrangements the Community Infrastructure Levy would work alongside the current mechanisms of S278s and S106s for necessary mitigation measures directly relating to a specific site)

• The Board noted that it was important to keep spending local to benefit local communities
• Setting the CIL rates had to consider the impact on affordable housing as the CIL would be fixed which would leave S106 amounts of affordable housing open to negotiation
• Clarification regarding the residual valuation approach and how land values differ across Leeds based on differing sales prices
• It was noted that the Council would have to publish a list (known as the  Regulation 123 list) outlining the infrastructure projects or types that it intends to fund through CIL. It was made clear that Section 106 funds cannot then be charged for the same infrastructure projects. It was reported that the LCC Steering Group was working on this issue and was a separate workstream to the current process of setting the CIL rates
• Clarification regarding the provision of schools and it was explained that if school provision in general terms was included on the Regulation 123 list you cannot then seek Section 106 funding. Schools may be required to be provided on site as part of the essential infrastructure of larger sites

RESOLVED –

a)  To note the report of the Director of City Development on the Leeds Infrastructure Levy and the commissioning of the Leeds Economic Viability Study.

b)  To note the presentation from GVA Consultants who were carrying out the Leeds Economic Viability Study which would determine the viability of sites for development in the city.

c)  That further progress reports be submitted to this Board in order to 

  monitor the development of the Community Infrastructure Levy.