Examiner backs Mayor of London's Community Infrastructure Levy

Independent examiner Keith Holland undertook an Examination In Public of Johnson's plans to raise £300 million for Crossrail through CIL. Though Holland gave the plan his approval he did criticise it.

Holland examined the Mayor's draft CIL Charging Schedule which sets out levies to be charged on property developments in all London boroughs. It split the boroughs into three groups according to viability and the ability of areas to accommodate additional development costs.. The charge will be on top of London boroughs’ own CIL tariffs.

Planning law expert Marcus Bate of Pinsent Masons, the law firm behind Out-Law.com, said that Holland's approval of the Charging Schedule should not be read as a full backing for the plans.

“The examiner’s recommendation provides a procedural tick in the box for the Mayor’s charging schedule, but the report provides a far from glowing endorsement for the Crossrail CIL," said Bate. "The Mayor’s approach is considered to be 'relatively basic' and in some cases the data justification is 'not convincing'..  However, the use of a simple broad-brush approach is considered good enough to meet the narrow legal tests and is consistent with the Department for Communities and Local Government's guidance." 

Holland criticised the inflexibility of the scheme in not making available 'discretionary relief for exceptional circumstances, which would allow schemes to avoid paying the levy if that charge would make the scheme unviable, subject to satisfying various legal pre-conditions.

"The refusal to make exceptional circumstances relief available comes under particular criticism for being dogmatic, inflexible and reactive, although the examiner notes that the legal rules prevent him from ruling on the soundness of this decision," said Bate.

Some representations were made against the 'Existing Use Value' (EUV) method of valuation for calculating viable CIL rates. This method values land according to its current lawful use only, disregarding the prospect of more valuable redevelopment for different uses Those who made representations argued that the 'Market Value' method should be used, which estimates the full open market value of the land which a willing buyer would pay to a willing seller.

"The examiner's report contains lessons for local authorities, developers and those seeking to oppose CIL, said Bate. "The EUV+ methodology remains sound, in the eyes of examiners, and State Aid issues are likely to be glossed over briefly as long as authorities steer clear of proposing multiple differential rates/zones.”

Bate said that there are a number of practical consequences of the examiner's recommendation. 

“Borough Councils have lost the argument about the Mayor’s entitlement to the ‘top slice’ of CIL and they may need to charge lower local rates as a result," he said. " Developers will need to keep up the pace and pressure to secure planning permissions before 1 April, where programmes allow, to take advantage of a shrinking window of opportunity to avoid paying Mayoral CIL."

"Interested parties should note that they face an uphill challenge when trying to overturn Draft Charging Schedules," he said. "To be effective, representations will need to be supported by much more detailed evidence than has been seen to-date and they will need to consider borough-wide viability conditions rather than focusing on individual sites and zones."