Theresa May has hinted that a scheme to spread the benefits of shale gas could be used as a model to rewrite the Community Infrastructure Levy, which is currently under review.
The Community Infrastructure Levy, a planning charge placed by councils on developments that have more than 100 square metres of floor space, is currently being reviewed by the Communities Department. If the scheme gets a similar overhaul to the Shale Wealth Fund, the money raised would be used to directly benefit the local community.
The Shale Wealth Fund, due to be formally consulted upon this week, was previously expected to share proceeds from shale revenues only with community trusts and local authorities. In a surprise move, May changed the consultation to include the option of money being paid directly to local residents in host areas.
“We’ll be looking at applying this approach to other government programmes in the future too, as we press on with the work of building a country that works for everyone,” said May.
According to a statement, the government will be looking at whether this approach can be a model for other community benefit schemes with the aim of putting more control and more resource in the hands of local households. “Examples of where the principle could be extended include the Community Infrastructure Levy,” it said.
A ‘government source’ quoted by The Telegraph suggested that rural homeowners could be given cash payments in compensation for unwanted developments.
However, the Campaign to Protect Rural England believes this is a radical interpretation of the text. “It is unlikely that the DCLG source quoted in The Telegraph is seriously – or even knowingly – proposing that Community Infrastructure Levy cash should simply be handed over to people living in areas affected by new housing development,” said Matt Thomson, head of planning at the Campaign to Protect Rural England.
“Rather the source is suggesting that development should benefit people living in the area through investment in infrastructure and services, instead of that investment being made somewhere else,” he added.
This is in fact a central tenet of the way that the Community Infrastructure Levy and section 106 funds are generally used, with at least 15% of CIL funds being allocated to local community priorities, rising to 25% where a neighbourhood plan is in place.
“If it really were the case that the Government planned to put cash directly into people’s pockets, the move would be almost impossible to administer,” said Thomson. “Among the problems would be a local infrastructure deficit, caused by cash for households being taken from funds earmarked for the provision of infrastructure necessary to support new development.”
According to Thomson, bypassing community engagement with pay-outs would not be a constructive approach. A move to pay households directly would signal that the government is giving up on making the planning process work for communities.
“The existing planning system does allow for some compensation to those harmed by developments under certain circumstances, and perhaps there is a case for being more generous about compensation,” said Thomson. “aBut the key factor must be that decisions are made in response to planning policies and other relevant factors, and compensation should only considered after a decision has objectively been made, not before.”