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Planning minister Nick Boles announced what he described as the ‘Boles Bung’ with a fanfare earlier this month. During his all-out media assault, including appearances on BBC Newsnight, a high-profile speech at think-tank Policy Exchange and a press briefing, Boles revealed his ‘neighbourhood funding’ plans. This would allow communities to keep 15 per cent of the Community Infrastructure Levy (CIL) charged on development in their area, capped at £100 per home liable to pay council tax. In areas with neighbourhood plans, this would rise to a quarter.
As the ‘Boles Bung’ name suggests, the key idea is making development attractive to those communities that accept it. In his speech to the Policy Exchange think-tank where he outlined the policy, Boles said: “We need incentives … that are even more local – so that the people who have to live with new housing developments get a direct benefit from them. And because I believe … that neighbourhood plans are the key to unlocking more house-building, those communities that draw up a neighbourhood plan and have it approved by local people in a referendum will receive 25 per cent of these revenues with no upper limit.”
But will neighbourhood funding actually work in encouraging communities to accept development? Experts aren’t so sure.
Tom Woof is chairman of the Upper Eden neighbourhood plan group – the first place in the country to have its draft plan approved by an examiner and where Boles chose to reveal his new policy. Woof described the announcement as “half-baked”, pointing out that in sparsely-populated Eden district, there is no CIL charge. He said: “I don’t think it will work in Eden, because the council doesn’t have a CIL charge and I think it’s unlikely to have one because it would make development unviable. There will be other areas of the country, like Eden, where CIL won’t be viable. Only in areas with the highest CIL would it make the biggest difference.”
Adrian Kerrison, project manager of consultancy the Nationwide CIL Service, said: “I don’t think it will make much difference. Local people are unlikely to be persuaded to accept development ‘in their back yard’ on the promise of funds under control of a few individuals in a parish council, with no firm idea of how the funds will be spent. I suspect most neighbourhood plans will be pursued to restrict rather than encourage development.”
Nigel Hewitson, head of planning at law firm Norton Rose, said he disagrees with the government’s reasoning that people will accept development if there is something in if for them. He said: “30 years’ experience in planning tells me that’s not the case. I think for most people, they don’t want change in the broader sense. Most people are happy with their little corner of England’s green and pleasant land. I have difficulty in believing it’s just a case of giving communities some money and people won’t object.”
But Steve Woolley, former CIL team leader at the DCLG and now a consultant with Peter Brett Associates, said: “At the least, it may prove an incentive to draw up a neighbourhood plan, particularly in areas where housing growth is likely.” Woolley said that the government was “slightly changing the purpose” of CIL – as well as an instrument to deliver infrastructure, also instrument to help encourage local people to accept that growth.
Woolley made the broader point that CIL cannot deliver infrastructure and growth on its own, but, to be effective “needs to be tied into ‘real’ growth-focused infrastructure planning based on good local governance”. He called for local authorities to work with business-led local enterprise partnerships and developers and for a “ruthless focus” on infrastructure priorities and funding. “At the moment we don’t have that” he added. “We must see infrastructure delivery as enabling growth.”
The high level of CIL revenue earmarked for communities also seemed to catch some by surprise. Kerrison said that a 5 per cent slice “was anticipated”. He anticipates that, where neighbourhood funding takes effect, those areas would mostly receive the 15 per cent proportion rather than the higher amount. Kerrison said he did not think that many areas would adopt neighbourhood plans and those that that did would receive “limited” development anyway.
A DCLG spokesman said draft regulations on neighbourhood funding would be published next month before being debated in Parliament. The measures are due to come into force in the spring, so expect the Boles Bung debate to rumble on over the next couple of months.