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COMMENT 17


Even then, the White Paper simply said that the Government would examine options for reforming developer contributions and will respond at the 2017 Autumn Budget. In a nutshell, the CIL Review


recommended a new system in which general infrastructure needs are met through a low level ‘local infrastructure tariff’ (LIT) applied to all development with few, if any, exceptions. The Review suggests a square metre charge based on the calculation of between 1.75 per cent and 2.5 per cent of the sale price for a standardised 100 square metre three bedroom home, divided by 100. For sites above 10 units only, it recommended that local authorities be allowed to negotiate additional S106 agreements to fund infrastructure made necessary by that development. This is in line with the wishes of volume housebuilders that wanted greater flexibility around infrastructure provision on larger sites. The Government is now in the process of thinking through its response. The FMB is broadly supportive of the


recommendations of the CIL Review. We strongly support the retention of a threshold for S106 demands. If the tariff still payable on those smaller sites is set at a relatively low level, it should not


remove too many sites from viability. We are strongly urging the Government to make this tariff payable at the point of sale or at the point of completion to ease the cashflow problems that many smaller building firms face. The arguments made in favour of


S106-type arrangements for the largest sites make sense, but there are some tough questions to ask about those smaller sites still above the 10 unit threshold. Here, further standardisation and simplification of S106, as urged by the Review, would be


welcome, but we really need to concentrate on affordable housing contributions. Government needs to recognise the increasing difficulties (for both the developer and housing provider) of providing a very small number of affordable units on quite small sites and move towards a more rationalised system with greater use of commuted sums. While we accept that death and taxes


may be as inevitable as they ever were, development taxes shouldn’t be as dysfunctional as they are currently.


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