Angus Saunders Principal Project Officer at Brent Council highlights how CIL can be used for sustainable growth and development.
Brent recently introduced the Community Infrastructure Levy (CIL), being amongst one of the first London boroughs to do so. We have plans for extensive growth in both homes and jobs over the next 13 years and we recognised the opportunity CIL offered to us to deliver growth in a sustainable way, and to attract investment in the borough.
Before CIL, Brent operated a tariff levied on new residential and commercial development secured by a S106 agreement, and the money received could only be used to mitigate the impact of the development from which it was collected. Whilst the tariff gave developers a degree of certainty about the amount of money they would have to pay, the restrictions on S106 prevented the council from using the money strategically. CIL is a step-change from this old regime, a far more flexible tool that allows for pooling of large sums of money potentially to deliver large, strategic pieces of infrastructure. CIL also offers a chance to reshape the relationship between development and infrastructure investment and to combine other funding sources, giving Brent an opportunity to provide more of the new infrastructure that the borough needs to cope with new development, and to attract new investment.
Brent’s regeneration strategy is focussed on five parts of the borough, planned to deliver 22,000 homes and 14,000 jobs by 2026. Our approach to CIL has been focussed on how we can use CIL to attract development to these areas whilst also making sure both new and existing residents have the facilities they need for Brent to be an attractive place to live and work.
At an early stage, we decided that the purpose of CIL should be to support sustainable growth and regeneration and to help to pay for the infrastructure that is a priority for the borough. Before we started work on our CIL, we had a Core Strategy that is a plan for growth, and we drew up an Infrastructure and Investment Framework (IIF) that detailed the social and physical infrastructure requirements the borough needed to support that growth.
With significant regenerative change in parts of the borough like Wembley, considerable amounts of new infrastructure is required to support this level of growth. When it came to setting the rates we would charge, we sought to strike a balance between helping to fund new infrastructure and the potential effects on financial viability of development across the borough, using evidence such as local market information and comparables to inform a viability study. Whilst we did not want to deter investment through a high CIL charge, we equally did not want to deter inward investment by an inability to provide the physical and social infrastructure new residents, customers and businesses will require.
The evidence showed a clear variance in economic viability of different development types, with residential development being more viable than office development. In response, we opted to set different rates according to different uses, an approach we feel better reflects the reality of development in Brent.
We knew from the IIF what infrastructure was needed and we could demonstrate the extent of the funding gap that needed to be met over the coming years. We had to set the rates at such a level that we could fund a significant amount of that essential infrastructure, but that did not make it so expensive to develop in Brent that the plan would not be implemented.
Following the adoption of the charging schedule, we have been working on a Strategic Infrastructure Plan (SIP) that will help the council to both choose what pieces of infrastructure need to be provided, and what developments are most important to the borough. We began by looking at the development sites that are crucial to delivering our growth plans and then investigating those key sites to find out what barriers there are to their development, and what the council can do to help to overcome those barriers. As our strategy has progressed, we have started investigating how CIL can be used to bring about those developments that in turn generate the greatest benefit for the borough, in both financial and regenerative terms. There is a potential to tap into a virtuous cycle of infrastructure investment, development and more investment.
With our new civic centre at the heart of a regeneration area that already hosts Wembley national football stadium, and is soon to host the London Designer Outlet store, we are well aware of the role the council can play in helping to attract inward investment. We are looking at ways that new infrastructure, perhaps a new public space to make key sites attractive to future residents and businesses, can be provided by initial CIL payments; in turn the development of those sites will generate CIL receipts and also New Homes Bonus and business rates – money which the council can re-invest in other infrastructure in the area to help unlock the next wave of development sites.
We are also looking at how we can involve the community more in the way the council decides to invest money in their area; the flexibility of CIL and the ability to pool large sums of money means we can respond to infrastructure in a strategic rather than a piecemeal manner, and that demands a response that involves our councillors and listening to our communities.
CIL also presents challenges: under CIL, the council is likely to have to orchestrate the delivery of more infrastructure than under the old S106 regime, where developers could agree to build the infrastructure themselves, and it is a challenge for local authorities to build the capacity needed to deliver large pieces of infrastructure.
CIL is a significant change for developers and councils alike, presenting a number of challenges, but it is also a chance for local authorities to think and act strategically and unlock the potential for growth. It’s crucial to strike the balance between generating enough CIL revenue to pay for the infrastructure needed to support growth, but also to not deter investment by setting that rate too high. We believe we have rates that reflect the economic reality in Brent, and we believe we have a plan to invest that revenue in a way that will attract further investment into the area.
Angus Saunders
Principal Project Officer
Brent Council
