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June Draft

Well, despite the reported uncertainty due to the election and the continuing concern about the In/Out Referendum, life goes on.  To that extent the West Yorkshire market, heart of George Osborne’s Northern Powerhouse hasn’t blinked.  It is as though we let the children play and we get on with it regardless of the noise they make.  We are, after all, used to noise in the beer garden.

True, we all want to know whether our future lies within or without Europe but Halifax and Huddersfield will still be here regardless of the result.

Industrial development has been steady through the recession with supply of property equalling demand.  However, a general lack of supply due to successive Government’s policy of charging 100% business rates on all types of empty industrial and commercial property, with very few exceptions and after only a brief respite, has caused a shortfall now in supply as demand has increased following the end of the recession.

Firms can only wait so long and if the correct supply is not available, we will lose out to other parts of the country and even other countries where planning policies are set up in favour of industry.  Housing supply and house prices get the headlines but without the correct supply of industrial land and buildings, there will not be the jobs to provide the finance for mortgages.

I attended a lunch recently and very positive words were spoken by senior members of Kirklees Council in support of industry and development but the shortly to be introduced CIL (Community Infrastructure Levy) could seriously forestall development.

More will be written about CIL, but essentially it is a development land tax but raised by individual local authorities rather than central government, to be set at a level by each authority for assisting in raising funds for local infrastructure.  It is essentially a locally raised hypothecated tax.  This is already achieved by Section 106 Agreements; legally binding but negotiated conditions on planning permissions whereby developers generally pay for dedicated elements of Council expenditure; typically low cost housing provision, education contribution, road improvements in the vicinity of the development etc.  However, S106 Agreements are both negotiated and subject to a Viability Test.  As each development has different characteristics and costs, so too does each S106 Agreement.

CIL, by contrast, is a scale charge set down by a local authority and non-negotiable.  It is set before all costs are known and, so far as we yet know, will not be subject to a Viability Test.

CIL is not supposed to replace S106 but augment it.  It is another tool in the box, but like all development control tools (the clue is in the word “control”) it is a negative influence/effect on all types of development.

All planning and development control, by its very nature, is a negative process but it needn’t be.  Planning is part of the democratic process but there needs to be real leadership and a continuing positive rather than negative attitude towards development.

Care will need to be taken, therefore, in establishing a correct level for this levy if development and therefore industry is not to be frightened off.

There is enough noise in the beer garden.  We don’t want to give any reasons to our wealth creators and providers of jobs to find a more appealing place to drink.

 

Mark S Hanson BSc FRICS

Managing Director

Hanson Chartered Surveyors

 

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