Weekly Update 30/7/2012 – Executive Meeting – chapter three (Community Infrastructure Levy)

Community Infrastruture Levy

When major housing or retail developments are built, it often places a burden on Council’s to support the development with infrastructure. The classic example is extra classrooms in a school when a development increases the school age population.

Currently developers have been expected to make a Section 106 contribution to the council which is a national scheme.  The Government is changing this and largely allowing Councils to come up with their own schemes. Some council’s, mindful of the need to encourage growth, have decided not to impose any levy. Trafford feels it should and I do tend to agree with them.

I’m not hugely impressed with all aspects of the Government’s parameters they are setting for Councils. And whilst local schemes have merit, there is a cost due to the complexity of each individual scheme. The Govt ise being much more prescriptive in preventing the contributions developers make on each scheme to be pooled across the borough. The idaa of a central pot that the council can use to address priorities is gone. The contribution now has to be applied to the specific neighbourhood. So consultants have been brought to make sure the scheme is robust and to ensure it doesn’t deter developers.

Whilst it may seem attractive to stop contributions going to the other side of the borough, when you consider that affordable housing projects are exempt from the scheme, and as you see below, the contributions levied in places like Hale and Bowden will be much higher per development, it’s inevitably going to see more money going there than here.

Private market houses in:

Cold market sub-area £20 (e.g. Old Trafford, Partington)
Moderate market sub-area £40 (e.g Stretford, Urmston)
Hot market sub-area £80 (e.g. Hale, Bowdon)

The rates above are per square metre – so you can see that a large house in Hale will generate a considerable levy to stay in Hale. The argument is that Hale is a very much in demand place to build compared to Partington. Or as they put it – the market is hot rather than cold.  (perhaps they watch a lot of these home makeover shows on TV)

The consultation will now go ahead.