Community Infrastructure Levy - Cost Concern
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The Government encourages farmers to diversify and breathe new life into redundant farm buildings. But that may become prohibitively expensive following the introduction of a new planning levy, says Leo Hickish of the Country Land and Business Association
The Community Infrastructure Levy (CIL) is a new planning charge set by local authorities to meet the cost of infrastructure in their area. The CIL will replace complex legal agreements, known as Section 106 agreements, which are negotiated between developers and local authorities. This new charge is non-negotiable, payable on most new developments at a £rate/per m2, and the money raised is intended to support a range of infrastructure projects, such as education and health facilities, transport schemes and community facilities. The Country Land and Business Association (CLA) has a number of concerns about its implementation. We say that by adopting a “one size fits all” approach, several categories of development may simply become unaffordable.
Rural worker housing
The CLA’s main concern is that the CIL charge could render rural worker housing unviable. Dwellings which have, through the planning process, been justified as a requirement for a specific business will become too expense to build if they have this levy imposed upon them.
These buildings are already worth 30 per cent less than market housing because of their restrictions on use.
Land managers have long been encouraged by the Government to find alternative sources of income other than agriculture. This largely means finding new uses for redundant farm buildings and land which will require planning permission for change of use.
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Planning policies for rural areas positively promote new business activity in rural areas, and try to establish a culture of rewarding entrepreneurship.
The CLA is lobbying local authorities in Sussex for a CIL rate of nil to be set for a change of use for redundant farm buildings.
Another concern is that CIL could be charged on new farm buildings. If our farmers are to meet the challenge of counting real issues of food security they are going to have to invest in new buildings.
Most modern farm buildings have a large footprint. As the CIL charge is measured per metre square, a farm building would have a considerable CIL bill.
It is interesting to note that Newark and Sherwood District Council has calculated that instead of a charge, agricultural buildings should theoretically receive a subsidy of £300/sqm given the viability and profitability of farming businesses.
Unfortunately, CIL does not allow for subsidies. However, the CLA is pushing Councils to set a nil rate for farm buildings and has had success in other counties across the south east.
The underlying logic of CIL is quite simple. It is a way of capturing some of the monetary gain of development for use in much needed local infrastructure.
For developers, these CIL charges are seen as just another cost to be factored in to the underlying land value. However, the risk is that CIL charges will prevent rural diversification and the construction of new buildings for farms and workers - resulting in a negative impact on the rural economy.
Diversification should be supported to aid the rural economy and farmers wishing to expand their enterprise to remain competitive should not be penalised with charges that make innovative projects unviable.
The CLA will continue to monitor the CIL charging developments and will support its members by lobbying each and every council in Sussex to ensure that rural concerns are understood and acted upon. There is enough pressure on rural investment without the burden of more tax.