Agenda item

JDoe addressed the committee and introduced colleagues accompanying him this evening; Pennie Rayner from the Strategic Planning Team and Elizabeth Griffiths who is the new S106 Officer.

JDoe took members through the report and apologised for the late circulation of the appendices which were circulated to committee by email earlier that evening; 2 single page documents breaking down S106 receipts and a listing of  CIL receipts collected in the last year.

Cllr Silwal referred to the administration costs in 2018-19 of £105k and those in 2019-20 of £140k, asking; why there is such a difference. 

JDoe responded that the figures represent 5% of the total funds received in that year, adding that the same applies to neighbourhood  funds. They are allocated as a percentage of the total received. JDoe advised that the Council has a total staff of 3 working on CIL and S106 and those staff are paid directly from these funds.

Cllr Silwall asked; how CIL is calculated.

JDoe responded that it is set out in the CIL charging schedules and it is calculated on floor area.  The base fee, as an example, for residential is set at £100 per sqm of floor space developed.  A typical 3 bed house might be approx. 100sqm so you would make a contribution of approx. £10k based on that indexed figure.  Rates vary across the Borough where we have 3 levels, the highest being in Berkhamsted where development opportunities and viability are higher.  There are different rates for different uses.  There are some exemptions, such as affordable housing.  It is only the net floor space gain that CIL is paid on.  CIL charging schedule is something that is kept under constant review.

Cllr Birnie asked if it is the case that instead of cash, developers can offer land against CIL.

JDoe agreed that there is a benefit in kind option.

Cllr Stevens returned to pg 11/12 and referred to the table regarding issuing funds, asking; if this allocation is taken only from CIL raised in Hemel Hempstead.

JDoe responded that the table shows the allocations agreed in 2016 based on the priorities the Council had at the time.  It is for the Council to revise that over time if deemed necessary.  CIL is entirely un-ringfenced, the Council can decide how it divides up payments across the Borough. 

Cllr Timmis referred to the 5% & 15% allocations and asked whether these are fixed. She commented that CIL would suggest that this is a levy to benefit the local area but in fact it is a tax that the Council can use wherever they wish and asked, as it ringfenced for infrastructure, whether that is something Members can scrutinise.

JDoe responded that the percentages are fixed in law.  We are required to hand out the 15% to the specific Town or Parish Council.  Otherwise, the Borough Council is the determining authority on how CIL is spent.  The Council agreed a protocol that it would engage with service providers to determine where CIL is spent and it does have to demonstrate that it is being allocated to infrastructure.

Cllr Riddick referred to CIL and the fact that it goes to parishes with the exception of unparished areas where it goes to the Ward.  As the Ward Councillor for Bourne End, he doesn’t know anything about that allocation, asking how he would find that information.

JDoe responded that the allocation goes out to Members in a newsletter.  Any individual queries are responded to on an ad hoc basis.

Cllr Riddick referred to the risk implications in item 2.4 commenting that it is quite clear whatever we do get from CIL will be short of providing the infrastructure that is required and asked how difficult is it to fill the gap in what is needed.

JDoe responded this will be a challenge and this is a pressing question as the Local Plan moves forward.  The Infrastructure Delivery Plan is the first draft of the infrastructure spend.  The developer will be advised of the specific infrastructure needs generated by each development and the Council would be looking for the S106 to meet those needs.  Some bigger developments might require external support so we are looking at all opportunities for government funding and also liaising with public sector organisations that provide the infrastructure, such as NHS, which helps them with their own capital expenditure planning. 

Cllr Riddick followed up by commenting that the combination of CIL and S106 demands may make it is no longer viable for developers to continue.

JDoe responded to say that is why CIL is set at a level where it is tested against viability.  It is checked at the application stage to ensure viability.

Cllr Birnie referred to 2.4 and asked about the funding shortfall between CIL charges and the cost of infrastructure.

JDoe clarified that CIL contributes only 10-20% towards the shortfall, not that it is the overall shortfall. 

Cllr Birnie asked whether the Draft Infrastructure Plan that was one of the supporting reports for the Local Plan draft has now been published.

JDoe confirmed it is one of the supporting reports and is published on the Council’s website.

Cllr Rogers asked; what the is difference between CIL and S106.

JDoe responded that CIL is reasonably new, having been around for approx. 10 years. CIL is a levy charged proportionate to the size of the development. S106 is a negotiated agreement with developers and ringfenced to that development..  S106 requirements usually refers to specific things that  the agreement sets out the developer should do.  CIL gives us more flexibility on how it is spent.

Cllr Rogers followed up by commenting that CIL has gone up since 2015 from £52k to £104k, asking how the requirement was funded before the introduction of CIL.

JDoe responded that prior to this there was only S106.  When CIL was introduced, Government included rules that you cannot charge twice e.g. you cannot levy a charge for open space through CIL and S106 as well.  Neither CIL nor S106 payments will happen if it makes the development unviable. 

Cllr Rogers referred to CIL monies to parishes and wards and asked; are there any controls on expenditure imposed by Dacorum on how that is spent?

JDoe referred to advice published online which is intended to guide parishes on how the money is spent.  It is their decision, but adequate and proper record keeping and accounting is required to show how the money has been spent. 

Cllr Birnie expressed his surprise at how high the figure is for self-build relief and queried whether £2.169m was the correct figure.

JDoe confirmed those are the recorded figures. 

Cllr Birnie asked; are any alterations to an existing home classed as self-build?

JDoe responded no, they are classified as extensions.

Cllr Birnie observed that there are a huge number of houses being put up by individuals and expressed his interest in seeing those figures.

Action: JDoe to provide figures on self-build in the Borough.

Cllr Birnie referred to Joint Strategic Plan commenting that this could be critical as far as CIL is concerned, noting a lack of development in neighbouring authorities as compared with Dacorum.  In addition, referring to the refurbishment of the SW Herts Hospital, he asked; how much of this expenditure would count toward a CIL requirement, observing that these are potentially dangerous factors so far as our Borough is concerned.

JDoe responded that this is a topic to come back to the committee for scrutiny when progress has been made on the joint plan. 

Cllr Rogers commented on the difference between Table 3 and Table 4 are pennies. Throughout the report we are talking about millions and he asked if we could standardise reports to remove pennies to make it easier to take in the data.

JDoe thanked the Cllr for the comments and responded that they will look to simplify tables infuture.

Action: JDoe & team to look at simplifying reporting of monies.

Cllr Timmis commented that in Table 6 there is a sum allocated to dog waste bin improvements but it was her understanding that DBC were no longer providing dog waste bins and commented that she has constantly asked over years for more bins where we have lots of dog walkers.  £2k is a considerable sum of money, in comparison to provision for trees, which is half that and she asked if we are now providing dog bins.

Cllr Birnie commented thatthis figure may be for removing old dog bins and in any case, this query would be better directed to CThorpe in Clean, Safe & Green.

Cllr Beauchamp referred to the appendices regarding CIL levels and asked; is the 10-20% in addition to the sum reported in November or is it cumulative?

JDoe confirmed that the Members Newsletter circulated in November had the figure for total volume held, but the table in this report is just for the year.

Cllr Birnie requested that the most up to date figures are circulated to committee.

Action: PRayner to circulate figures.

Cllr Stevens commented around trying to pin down S106 and CIL in the Local Plan and asked; in the consultation carried from August onward there was a hint that government is contemplating merging S106 & CIL, will the Local Plan be overtaken by events?

JDoe clarified that this is the White Paper Consultation from Central Government on the future of planning system.  Government is suggesting there should be a single Infrastructure Levy.  At this time there is no simple answer and we are still awaiting feedback from Government to the consultation.  DBC pointed out that it is not always possible to do it on a simple levy basis.  The main issue is how you set a single levy because the viability levels differ across the country; indeed they differ across the Borough.  JDoe commented that there would be a long lead in time and transition to any new systems.  But Government are encouraging all local authorities to progress their Local Plans in the mean time.

Cllr Riddick expressed intrigue regarding self-build and his surprise at the proportion we appear to have within the Borough.  He asked; with our new Local Plan, what if any developers came forward with a proposal for something that wasn’t an allocated site within the plan but tried to give weight to it being considered by saying they are going to put forward a self-build scheme and if they do, is there a limit to the scale of self build they could put forward?

JDoe responded that the intention is we have a plan led system. It is up to us how we define scale.  The starting point with a new development is, does it comply with the Local Plan?  There would be no justification for not allowing a development that fitted with the Local Plan because it was self-build.

Cllr Birnie asked how, if a developer is developing an area and a person wants to build himself a house on a self-build basis, would that individual  have to pay for the portion of the land he is using, with the only advantage being that he wouldn’t have to pay CIL on it.

JDoe confirmed yes, there would have to be a market transaction on that basis.

Cllr Riddick commented that it could only be progressed if the person developing the land puts in the infrastructure as part of the package before allowing individuals to create self-build units.

JDoe confirmed there would be a lead developer responsible for the infrastructure. 

Cllr Birnie asked; if someone wants to knock his house down and build 2 houses, would one or 2 count toward self-build?

JDoe responded that they would only pay CIL on net floor space gained. PRayner added that the rules are quite complex and offered to check that information and provide a response to the committee.

Action: PRayner to circulate rules on CIL as per example above.

Cllr Birnie asked if S106 money is difficult to collect.

EGriffihs advised that if it comes to the point where a developer cannot meet a payment we try to come to some arrangement such as monthly instalments to ensure we do collect the money eventually.

Cllr Riddick suggested that we have a certain amount of strength in that we can refuse to sign off a development until all monies have been received.  However, he asked what happens if the developer goes bust or deliberately winds itself up?

JDoe responded that you cannot withhold permission before you receive monies.  There are various trigger points within the agreement for developers to either pay money or deliver specific things by certain points within the development.  The trigger points also require that they are not entitled to build the development out further unless the works required are completed or the money paid.  On occasions we will request a bond is put in place, on a case by case agreement. 

Cllr Riddick asked; with interim payments, how is that paid? 

JDoe responded they are received by general accounting and earmarked for their intended purposes.

Cllr Birnie asked when CIL is actually paid.

JDoe advised it is not payable until works start on site.  Developers can arrange a payment plan with us. 

Cllr Ransley referred to item 7.2 in the report commenting that this goes with the Core Strategy and asked; are you saying some of it could be delayed and not materialise until after the life time of the Core Strategy?

JDoe advised that the key safeguard here is about when developments come forward and planning applications are made and put before DMC.  It cannot proceed until those arrangements are in place for the funding of the infrastructure. Unless the funding is put together the developments might be delayed.

Questions concluded and the report was noted.