Planners & Development Economists

Roger Tym & Partners
Roger Tym & Partners

The impact of Conservative policy on infrastructure planning

March 2010
Our infrastructure experts summarise the key issues and share their thoughts on these recent developments.

Infrastructure planning and developer contributions are once again in the spotlight.  The Government published its final regulations for the Community Infrastructure Levy (CIL) on 19 February.  This was promptly followed by the Conservatives’ long-awaited Planning Green Paper (22 February) proposing to abolish CIL and replace it with a single unified local tariff (SULT).  In September 2009, the Planning Inspectorate provided some much needed guidance for local authorities on what infrastructure issues need to be addressed in Core Strategies. 

The end of the road for CIL?

Conservative Planning Green Paper, February 2010The final regulations for the Community Infrastructure Levy (CIL) are expected to come into effect on 6 April.  This follows a long and controversial process to reform planning obligations and the delivery of infrastructure through CIL.  Despite some key changes to alleviate concerns from the development industry, such as the allowance of exceptions, issues of practicality and implementation remain unanswered.  However, CIL could be short lived if the Conservative Party wins the general election.  Although currently lacking in detail, the Conservatives’ proposed reforms of local infrastructure planning and planning obligations include:
  • a single unified local tariff (SULT) - each local planning authority will set its own rates related to the size of development rather than the viability of different areas envisaged under CIL
  • a proportion of tariff revenue handed to the community in which the development takes place
  • planning obligations limited to site-specific adaptation and remediation.  
  • county councils and unitary authorities encouraged to take the lead in preparing infrastructure plans
  • in preparing local plans, local authorities will need to provide relevant development information, such as plans by service providers and bordering authorities, in an “open source” format
How do the Conservatives’ proposals differ?
Although the Conservatives’ Green Paper included some potentially fundamental planning reforms, in terms of infrastructure planning and funding there are fundamental similarities with Labour’s approach.  Both parties seem to be in agreement that:
  • a tariff-based approach to infrastructure funding is preferable
  • the tariff rate needs to be variable to reflect differences in development
  • the use of other obligations should be limited to site-specific issues
  • affordable housing should be exempt from a tariff
  • service providers and local authorities need to work closer together in preparing infrastructure plans  
However, the key difference could be how the two systems would operate.  The government has tried to produce a prescriptive tariff based system to reforming planning obligations and infrastructure delivery through CIL, but has hit issues of practicality (such as payments in kind) and implementation (such as the need for exceptions), leaving major questions over whether it will work.  There are also uncertainties over the ability of authorities to secure required levels of contribution in the interim period before they can adopt a CIL charge.  Conversely, the Conservatives’ planning ethos to hand decision making powers back to the local level is likely to mean local authorities would have more flexibility with a SULT, which would also require much less examination.  This could lead to more straightforward tariff systems in line with existing arrangements, such as in Milton Keynes and Kent Thameside, being rolled out across the country.

Keep calm and carry on?

In reality, there is still potentially a long way to go for either CIL or SULT.  In the meantime, the need to plan and deliver infrastructure continues, particularly for authorities still wishing to have their Core Strategies examined.  The Planning Inspectorate (PINS) produced a much needed second ‘Learning from Experience’ document in September 2009, which recommended local authorities should:
  • identify critical dependencies between infrastructure provision and key policies
  • prioritise to avoid the “wish list” approach
  • consider “what if” questions where there is uncertainty (such as in market conditions over the plan period)
The fundamentals for effective infrastructure planning remain and still need to be addressed.  In terms of using developer contributions to help fund infrastructure, whether we end up with CIL, SULT or something different (such as Tax Increment Funding), local authorities will need to consider their particular requirements, which include:
  • the extent to which infrastructure needs are cross boundary
  • whether pooled contributions, in conjunction with mainstream funding, will be sufficient to fund necessary infrastructure
  • differences in viability in an area - not just between uses and locations, but also the types of sites in terms of issues such as abnormal costs and existing use values  
The planning system will also need to adapt to the growing challenges presented by effective infrastructure planning and funding, in particular the viability of development.  For example, PINS is already requiring viability evidence where developer contributions will be used to fund key infrastructure requirements.  Our recent study into how training in this area should be improved, undertaken for a commissioning body of private and public sector stakeholders led by the British Property Federation (BPF), is to be followed up by guidance from the RICS on how to test financial viability in planning. These measures show that help is on its way.

Philip Wallbridge, Associate, London
With input from Chris Bowden, Andrew Clarke and Shilpa Rasaiah