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The Cabinet received report ES/0935 of both Councillor David Ritchie, the Cabinet Member with responsibility for Planning and Coastal Management and Councillor Maurice Cook, the Cabinet Member with responsibility for Resources, which sought authorisation to consult on the draft East Suffolk Community Infrastructure Levy (CIL) Charging Schedule, alongside the draft CIL Instalment Policy, and then, after having considered representations, to submit the Charging Schedule for independent examination.
The report was introduced by Councillor Ritchie, who explained that the Council currently had two existing CIL Charging Schedules, one adopted by the former Waveney District Council in 2013 and another adopted by the former Suffolk Coastal District Council in 2015. Councillor Ritchie confirmed that the charging schedules had been updated annually, with construction industry inflation, but did not reflect the recently adopted Waveney and Suffolk Coastal Local Plans. Councillor Ritchie added that it was also desirable to have a single Charging Schedule for East Suffolk.
Councillor Ritchie noted that the Council had been advised by its viability consultants, Aspinall Verdi, when creating the draft Charging Schedule and had taken all the necessary elements into account when doing so. Councillor Ritchie explained that there were many sites within the district which would also be required to deliver infrastructure through Section 106 agreements in addition to paying CIL. Aspinall Verdi had completed viability assessments on a range of development types and the information and recommendations in the report highlighted that not all development types could viably support CIL charge.
Councillor Ritchie noted that when determining CIL rates a buffer needed to be included to allow for negative viability changes such as a drop in house prices and/or a rise in construction material costs, with the national buffer averages typically being about 30% upwards. Councillor Ritchie cited the recent rise in construction materials costs and noted that a bigger buffer than normal was recommended by Aspinall Verdi and would be necessary, particularly for strategic sites.
The Cabinet was advised that it had been concluded that Lowestoft and parts of Oulton Broad could not viably support CIL on residential developments, but the rest of the district could support residential CIL at a variety of different rates. Councillor Ritchie noted that strategic sites across the district, considered individually, would generate CIL at a range of rates per square metre. It had also been concluded and recommended by Aspinall Verdi that CIL could not viably be applied to holiday accommodation, all types of specialist retirement accommodation and employment space such as offices and industrial buildings, as well as 'comparison' shops (such as clothes and furniture shops); Councillor Ritchie highlighted that some 'convenience' retail employment sites (food and drink shops) were recommended for CIL at £70 per square metre.
Councillor Ritchie explained that Planning officers had liaised with Aspinall Verdi throughout the process and that a robust draft Charging Schedule had been created. The Cabinet was made aware that representatives from Aspinall Verdi had also given presentations at meetings of the Local Plan Working Group. Councillor Ritchie considered that the recommendations struck the correct balance between charging the maximum level of CIL without threatening the viability of sites as a whole in the district.
Councillor Ritchie outlined that the next stage was to open a consultation on the draft Charging Schedule for six weeks, which was intended to run from 11 November 2021 to 23 December 2021. Councillor Ritchie was of the view that, notwithstanding that the proposed rates were considered appropriate, the Council would very likely receive responses from developers that the proposed CIL rates were too high, particularly citing the recent increase in construction costs.
Councillor Ritchie assured the Cabinet that all representations received during the consultation will be carefully considered prior to the draft Charging Schedule being submitted for independent examination in early 2022, with or without modifications. Councillor Ritchie highlighted that the recommendations also sought to delegate authority to the Head of Planning and Coastal Management, in consultation with Councillor Ritchie, to make minor changes to the consultation in order to allow a smooth process. Councillor Ritchie thanked the Planners for their hard work on the report and the work on the draft Charging Schedule.
The Leader invited comments and questions from the Cabinet.
Councillor Rivett thanked Councillor Ritchie and the officers for the report; he highlighted the disparity between the proposed CIL rates for the North Lowestoft Garden Neighbourhood, Carlton Colville and the Beccles and Worlingham Garden Neighbourhood and queried why this was, given the relative proximity of the sites. Councillor Ritchie noted that each site was considered independently and although some notional values were similar across all three sites other values, such as size, the proposed number and density of dwellings and the number of affordable homes required all differed and this resulted in different CIL rates for each site.
Councillor Rivett asked why the development profit levels for the sites appeared similar when the CIL rates were so different. Councillor Ritchie explained that the predicted profit on each site was based on the number of houses on a site, noting that the CIL rate for each site took into account multiple factors when estimating the buffer required to ensure a site's viability.
In response to a further question from Councillor Rivett on costs specific to the Beccles and Worlingham Garden Neighbourhood site, Councillor Ritchie advised that the relevant policy in the Waveney Local Plan required that a cycle path be included on the boundary with Ellough Road. Councillor Ritchie stated that consultation responses on other sites would ikely provide a more up-to-date picture on their specific infrastructure requirements, which would be carefully considered and could result in refinements being made to the draft Charging Schedule if judged appropriate.
Councillor Brooks said that he could not support the paper; he supported the principle of CIL but was concerned at the varying rates across sites in the north of the district, citing the increase in both the price of and demand for housing in the Beccles and Worlingham area since 2013. Councillor Brooks considered that the CIL rates proposed for the North Lowestoft Garden Neighbourhood, Carlton Colville and the Beccles and Worlingham Garden Neighbourhood equated to a reduction in real terms and saw no reason why the three sites were proposed for different CIL rates.
Councillor Ritchie acknowledged the rise in house prices and said that once adopted, the CIL Charging Schedule would be reviewed on a regular basis. Councillor Ritchie reiterated that each strategic site had been considered independently and that the different housing requirements on each strategic site had resulted in differing CIL rates for each site. Councillor Ritchie highlighted the rate of CIL that was paid to towns and parishes, 15% or 25% if a Neighbourhood Plan was in place and reiterated his earlier comments about strategic sites having Section 106 requirements in addition to CIL requirements. Councillor Ritchie considered that a robust process had been followed to create the draft Charging Schedule which provided the best possible proposals and welcomed Councillor Brooks' participation in the consultation and examination process.
Councillor Brooks noted that at the last meeting of the Local Plan Working Group officers had offered to speak to town and parish representatives and asked if this offer remained in place. Councillor Ritchie highlighted that officers regularly engaged with town and parish representatives and referenced two workshops held in spring 2021, which Councillor Ritchie had considered to be successful.
Councillor Kerry referred to neighbouring sites in his Ward which had not been defined as a strategic site and therefore had differing proposed CIL rates and queried the rationale behind this decision. Councillor Ritchie invited the Principal Planner to address this question.
The Principal Planner noted that the formation of a CIL Charging Schedule was not an exact science and was reliant on professional judgement and opinion, particularly when allocating strategic and non-strategic sites, this process being based on a variety of factors including scale. The Principal Planner noted that the Felixstowe and Trimleys area was a complex one given the number of allocated sites in the area and stated that officers had been working with Suffolk County Council to ensure that infrastructure was, and would be, delivered in a timely way. The Principal Planner considered that the CIL rates proposed were appropriate and would maximise CIL generation whilst recognising uncertainty on sites and giving a degree of flexibility to ensure they remain viable.
The Principal Planner explained that allocated sites were considered separately along with their policy requirements in the Local Plans and highlighted that in the example given by Councillor Kerry, a primary school was required on one site which reduced the number of dwellings on the site overall. The Principal Planner appreciated that a single rate for a wider area would be simpler but stated that there was a need to ensure that all sites had the required infrastructure to meet the totality of the needs of the wider area.
Councillor Ritchie asked the Principal Planner if the proposed CIL rates threatened the viability of sites. The Principal Planner said that they did not and considered that the buffers built into the CIL rates meant that allocated sites should be delivered viably with all policy requirements met.
Councillor Gallant queried if the consultation would result in any changes to the draft Charging Schedule prior to its examination. The Principal Planner said that, pending Cabinet approval, there would be a six-week period of consultation following which all consultation responses would be carefully considered by officers; officers would then need to reach a decision on whether, in light of these consultation responses and associated evidence, modifications to the draft Charging Schedule needed to be made before it is submitted for examination.
The Principal Planner confirmed it was not uncommon for modifications to be made following a period of consultation and if any more significant changes were required a full consultation period would be required for the revised document. The Principal Planner advised that if minor changes were made then the document would be submitted for examination, but with a four-week period for consultees to comment on the changes to the Examiner. All consultation information would be considered by the Examiner.
Councillor Ritchie emphasised that consultations were always taken very seriously by the Council and every response would be analysed and the outcomes of this shared with the Local Plan Working Group.
The Leader invited comments and questions from Ward Members.
Councillor Ashdown pointed out that Members had been encouraged to promote creating Neighbourhood Plans to towns and parishes in their Wards, due to the higher rate of CIL that towns and parishes with such a plan receive. Councillor Ashdown noted that one area in his Ward was proposed to have a zero rate for CIL and said this would not be well received.
Councillor Ritchie sympathised with Councillor Ashdown's concerns and considered that the government had not recognised there would be a need to set a zero rate for CIL in some areas. Councillor Ritchie reiterated that the analysis had shown that Lowestoft and parts of Oulton Broad would have to be zero rated for CIL.
Councillor Deacon congratulated officers for producing a detailed and well-crafted report; he sought additional information on the response to the initial consultation and the impact of the Lowestoft Flood Barrier on calculations and queried the mention of the now defunct Ipswich Northern Route.
Councillor Ritchie stated that a large database of consultees, including statutory consultees and all towns and parishes, had been contacted for the initial consultation. Councillor Ritchie predicted that the response to the next consultation would be significantly higher.
The Principal Planner confirmed to Councillor Deacon that current land values had been used when calculating the CIL rates proposed. The Principal Planner acknowledged that the completion of the Lowestoft Flood Barrier would have a positive impact on land values in the Lowestoft area but said it would be difficult to predict exactly what this would be and noted that there would still be a legacy of low land values in the area, particularly in central Lowestoft.
The Principal Planner noted that the reference to the Ipswich Northern Route had been made prior to the shelving of the project and reflected the situation at the time of drafting rather than the current situation.
Councillor Topping was of the view that residents in Beccles would be disappointed with the proposed CIL rates for the area and asked for clarity on the Section 106 agreement requirements on allocated sites in relation to CIL. Councillor Ritchie confirmed that CIL rates would be payable in addition to required Section 106 payments.
In response to a further question from Councillor Topping, the Principal Planner confirmed that different CIL rates may sometimes be applied on a site depending on the timing of phases of development being brought forward, and the current CIL rate for the area, but that the situation could be complicated.
Councillor Byatt echoed the thanks to the officers for producing a substantial document; he expressed his disappointment that the Kirkley Waterfront site would not be liable for CIL and sought an update in future about the significant brownfield sites in the area. Councillor Byatt also asked about the impact of the potential Sizewell C development on European protected sites and the figure of 10 dwellings being the minimum on a development to ensure higher energy standards.
Councillor Ritchie acknowledged the Kirkley would be a difficult area to develop but considered that land prices would increase following the completion of the Lowestoft Flood Barrier. Councillor Ritchie noted, however, that the current situation resulted in CIL not being viable for the area at present. With regard to Sizewell C, Councillor Ritchie was unable to predict what the impact of that development would be should it go ahead.
The Principal Planner highlighted that 10 dwellings was the common threshold in national planning policy for higher energy standards; he said that officers sought high standards of sustainability at all levels of development but considered that the minimum level would not overburden smaller developments.
Councillors Rivett and Ritchie noted that the proposed consultation would allow all responders to be able to make representations to the Examiner. Councillor Gallant said it was important to acknowledge that the Cabinet was being asked to approve moving to the next consultation stage and was not approving the final draft CIL rates.
On the proposition of Councillor Ritchie, seconded by Councillor Cook it was by a majority vote
RESOLVED
1. That the Draft Community Infrastructure Levy (CIL) Charging Schedule, including the Draft East Suffolk CIL Instalment Policy, be approved for six weeks’ consultation.
2. That the Head of Planning and Coastal Management, in consultation with the Cabinet Member with responsibility for Planning and Coastal Management, be authorised to make any presentational, typographical and/or other minor (non-material) amendments prior to consultation.
3. That the Head of Planning and Coastal Management, in consultation with the Cabinet Member with responsibility for Planning and Coastal Management, be authorised to consider the representations made to the consultation, to make any relevant modifications, and then submit the draft CIL Charging Schedule (and supporting documents) for examination by an independent Examiner.
4. That the Head of Planning and Coastal Management, in consultation with the Cabinet Member with responsibility for Planning and Coastal Management, be authorised to agree any further work and/or appropriate changes to the draft CIL Charging Schedule (and Instalment Policy) during the examination as the need may arise.