York developers face fresh levy to fund infrastructure

Developers face the introduction of a Community Infrastructure Levy, which in certain cases will add to their Section 106 contributions. <i>(Image: supplied)</i>
Developers face the introduction of a Community Infrastructure Levy, which in certain cases will add to their Section 106 contributions. (Image: supplied)

DEVELOPERS are set to face extra charges from the city council in a proposed Community Infrastructure Levy (CIL).

The city council Executive meeting on Thursday is recommended to approve the levy before placing its proposed charging structure out to public examination.

City of York Council is introducing the levy, based on the land area of a project, to help fund infrastructure projects.

The city council estimates as part of its emerging Local Plan, it needs to spend £270.7m on infrastructure, such as schools or roads, to deal with the impact of future growth.

However, the council estimates just £20.7m of such funding is available, leaving a £249m shortfall.

Already, developers on scheme above a certain size must make Section 106 payments to mitigate any ‘harms’ a development may bring, such as funding extra school or medical facilities. They must also make a certain number of homes ‘affordable.’

After researching the issue over recent years, the council looks set to join other councils in operating a Community Infrastructure Levy (CIL) to collect much more money.

The council’s Annual Infrastructure Funding Statement says it received £2.2m in 2021/22 from Section 106 agreements. But council planners say £73m could come from CIL payments over the next 15 years from 5,347 new dwellings.

A report prepared for the meeting also says a CIL is more flexible. A CIL  payment can go into a pot and be used to fund schemes across the entire district as determined by the council, rather than S106 money which must be linked to the schemes it came from.

CILs also give developers more certainly, since as a fixed charge on land size, it is non-negotiable, so development costs can be more readily calculated, as opposed to Section 106 payments which are open to negotiation.

Certain schemes, however, such as housing, may face both CIL and Section 106 charges.

However, the city council says it is mindful of how much to charge, saying it follows government guidelines on affordability and the need for consultation before introducing the levy.

However, reflecting York’s higher land values, its proposed CIL is higher than of neighbouring councils.

Cllr Nigel Ayre, Executive Member for Finance and Major Projects, said: “With the Local Plan now entering its final stage, it’s crucial we create the right approach to delivering the homes and business space set out in the plan. The Community Infrastructure Levy will enable us to deliver the right infrastructure for the local community alongside the new homes that York needs to support our city growing in a sustainable way.

If approved by the executive, its CIL schedule will go to public consultation in the coming weeks. After a successful examination, this would come back to Executive to request approval to adopt.

The proposed charges and details can be found in the agenda of Thursday’s Executive Meeting.