The Council has proposed to charge differential rates for retail development, dependent on its size. Development that is over 280 square metres will attract a levy of £250 per sq m and retail development that is under 280 square metres would attract a levy of £50 per sq m.
The Council's PDCS (4-pages / 395KB PDF) also proposed a charge of £125 per sq m for all residential development. All other development would be subject to a nil rate per sq m levy.
"In setting the CIL rates contained within this schedule, the Charging Authority has aimed to strike what appears to it to be an appropriate balance between the desirability of funding infrastructure from CIL, and the potential effects (taken as a whole) of the imposition of CIL on the economic viability of development across its area," the Council said.
The Council found that all the residential schemes tested in mid to high value areas were able to support a CIL charge of £100 to £150 per square metre and maintain strong confidence of viability, the Viability Assessment said (61-pages / 1.57MB PDF).
"For most low value schemes, a charge at this level would require some degree of negotiation in the level/tenure mix of affordable housing provision or contributions to ensure sufficient confidence of viability; however, this would not significantly impinge on the Council’s overall ability to secure affordable housing," it said.
The Council has proposed differential retail rates, despite a recent examination on Poole Borough Council's CIL Charging Schedule, which recommended the removal of differential retail rates due to a lack of "fine grained" evidence.
Poole Borough Council's CIL Draft Charging Schedule had proposed a levy of £200 per square metre for superstores over 3,000 square metres, but the Examiner's report said (9-Pages / 170 KB PDF) that, in order for the schedule to meet statutory requirements and be approved, the Borough must "delete [the] CIL rate of £200 per sq m for superstores".
"The Council’s proposed £200 per sq m CIL rate flows directly from this [viability] evidence," the Examiner said. "There is nothing in the CIL regulations to prevent differential rates for retail development of different scales. However guidance states that where a charging authority is proposing to set differential rates, it may want to undertake more fine-grained sampling to identify a few data points in estimating the zonal boundaries or 'different categories of intended use'," the Examiner said.
"In this case the viability assessment has identified a marked difference between the capability of a small retail development and that of a large retail superstore built on low-grade industrial land to support a CIL charge," he said. "However based on just two examples, with additional testing showing a complex picture, the Council accepts that there is insufficient fine grained evidence to support the use of the proposed threshold to differentiate between the different scales of retail use."
Reigate and Banstead Borough Council's viability assessment concluded that "retail uses demonstrate a varied scope to support a CIL charge."
"Generally, most non-food retail and small scale convenience scenarios were able to support a CIL charge of £50 per square metre with a comfortable level of confidence in viability," it said. "However, large scale (over 3,000sqm) predominantly non-food supermarkets/superstores are concluded as being able to support CIL charges above this level and exceeding £200 per square metre with a strong degree of confidence in viability."
Consultation on the PDCS is open for comments until 26 October.
