Policy GEN 4: Recovery of forward-funded infrastructure costs
- The council will recover the costs associated with forward funded infrastructure from applicants that rely on this infrastructure to mitigate the effects of their development and make it acceptable in planning terms where:
- the site and the forward funded scheme it contributes towards is identified in Table 3.1 'Breakdown of LPS and other sites expected to contribute to the recovery of forward funded infrastructure schemes' in the accompanying supporting information to this policy;
- the council has used the following mechanism for calculating the level of forward funding contribution required to be recovered:
- the overall amount to be recovered for each scheme is established by the council;
- the overall number of residential units and/or employment floorspace likely to be developed on the linked sites identified for each scheme in Table 3.1 is established by the council;
- a forward funding contribution cost per residential unit and/or employment floorspace measure is identified by the council for each scheme by dividing 1(ii)(a) by 1(ii)(b);
- the council undertakes individual legal agreement negotiations for planning applications relevant to the sites or areas identified in Table 3.1 to establish whether the cost per dwelling or employment floorspace figure identified at 1(ii)(c) can be viably delivered as part of the development. The applicant will be required to submit a viability assessment, prepared in accordance with guidance, to support any reduced cost per dwelling or employment floorspace figure to that proposed by the council;
- the council agrees a forward funding contribution cost per residential unit or employment floorspace with the applicant based on the applicant’s viability assessment, where the council is satisfied that the assessment has been properly prepared in accordance with guidance. If a reduced figure to that identified in 1(ii)(c) has been agreed, this will be subject to review in line with Policy GEN 7 'Recovery of planning obligations reduced on viability grounds' and form part of a legal agreement;
- the forward funding contribution and recovery of costs meets all the planning obligation tests set out in Regulation 122(2) of the Community Infrastructure Levy Regulations 2010 or as required by any subsequent amendment to these Regulations or to national planning guidance;
- the forward funding contribution and recovery of costs is secured through a Section 106 legal agreement. This will include flexibility to the developer to enable agreed forward funding contributions to be made as stage payments linked to the progress of development at a site. It will also include any administrative, legal and financing costs to the council associated with both providing the infrastructure and its subsequent recovery through the planning obligations process;
- the council will cease to require a forward funding contribution once all the costs associated with the forward funding element of a scheme have been recovered.
- The council will refuse planning applications where applicants seek to rely on forward funded infrastructure to make proposals acceptable in planning terms but are not prepared to make the required contribution towards refunding the cost of its provision through planning obligations.
Supporting information
3.17 This policy provides greater detail to assist in implementing LPS Policy IN 1 'Infrastructure' and LPS Policy IN 2 'Developer contributions'.
3.18 The policy is intended to help facilitate development in the borough. As a proactive authority, Cheshire East Council is seeking to assist developers in achieving agreed levels of growth in the borough as detailed in its local plan. For this reason, the council recognises that in certain circumstances, such as the provision of a road or a new school required as part of a strategic/comprehensive approach to development in an area, it is necessary or desirable for infrastructure to be provided in advance of planned development. This can be because a new road is needed to open up parcels of land to enable development to happen or because it enables the provision of important infrastructure at an earlier stage than would otherwise have been possible. This acts as an enabler and helps to bring forward individual schemes that would not otherwise be able to progress on their own.
3.19 This will benefit the residents or occupiers of early phases of a large scheme, particularly where this scheme may take a long time to reach completion, involve multiple developers or where the infrastructure can’t be provided in a phased way and is required early on but is not viable to provide at that time.
3.20 Policy GEN 4 'Recovery of forward-funded infrastructure costs' will apply only to infrastructure schemes funded by the council or its partners where the funding approval was made on the basis that all or part of the costs incurred will be subsequently recovered from developers benefiting from it i.e. where the council has borrowed; used its reserves; or diverted funding from other budgets in the short term to help bring forward development on the understanding that it will be repaid. These infrastructure schemes are derived from the council’s LPS, including its supporting Infrastructure Delivery Plan, and are identified in Table 3.1 'Breakdown of LPS and other sites expected to contribute to the recovery of forward funded infrastructure schemes' below.
3.21 The council will not seek the refunding of any grant monies it has received for the provision of a scheme from external sources, such as from the government, where there is no requirement for this element of the funds to be repaid or recovered.
3.22 Table 3.2 'Breakdown of costs associated with forward funded schemes as of February 2022' below provides information on the overall cost of these schemes and the extent of the forward funding it is seeking to recover as a guide, together with the status of each scheme, as of February 2022. Up to date costings from the council's latest published Medium Term Financial Strategy will be used for each scheme to calculate the level of forward funding contribution at the time an application is submitted. The council will cease to require the recovery of the identified forward funded element of each scheme once it has recovered all the related forward funded costs i.e. the council is seeking only to recover relevant costs rather than generate a surplus through the application of this policy.
Table 3.1 Breakdown of LPS and other sites expected to contribute to the recovery of forward funded infrastructure schemes
| Forward funded infrastructure scheme | LPS sites expected to contribute |
|---|
|
Congleton Link Road
|
|
| Poynton Relief Road |
|
| A500 dualling, Crewe |
|
| Flowerpot junction, Macclesfield (part of the Macclesfield Town Centre Movement Strategy) |
|
| Crewe Green roundabout |
|
| Sydney Road bridge, Crewe |
- Site LPS 7 ‘Sydney Road, Crewe’
- Other sites where transport assessments or modelling show a significant distribution of traffic to this infrastructure scheme
|
| North West Crewe Package |
|
| Middlewich Eastern Bypass |
|
Table 3.2 Breakdown of costs associated with forward funded schemes as of February 2022
| Forward funded infrastructure scheme | Total scheme estimate (£m) tablenote A | External public sector funding (£m) tablenote B | Council & received S106 contribution (£m) tablenote C | Underwritten forward funded element (£m) | Scheme status |
|---|
| Congleton Link Road |
89.6 |
45.8 |
17.1 |
26.7 |
Completed |
| Poynton Relief Road |
50.7 |
22.7 |
21.8 |
6.2 |
Under construction |
| A500 dualling, Crewe |
68.7 |
55.1 |
8.5 |
5.1 |
Not started |
| Flowerpot junction, Macclesfield |
10.0 |
3.5 |
4.5 |
2.0 |
Not started |
| Crewe Green roundabout |
7.6 |
5.3 |
0.2 |
2.1 |
Completed |
| Sydney Road bridge, Crewe |
11.0 |
6.0 |
0.5 |
4.5 |
Completed |
| North West Crewe Package |
40.3 |
15.0 |
11.0 |
14.3 |
Not started |
| Middlewich Eastern Bypass |
74.0 |
48.2 |
5.4 |
20.4 |
Not started |
| Total |
351.9 |
201.6 |
69.0 |
81.3 |
|
3.23 Recovery of costs will be calculated on a proportionate basis using the mechanism identified in the policy. For viability reasons it is likely that in most cases only the residential element of schemes will be used by the council to calculate forward funding contributions. However, where employment sites are shown to have sufficient economic viability, they will also be expected to contribute to the cost of forward funded infrastructure. Viability assessments will be prepared and funded by applicants for individual sites and used by the council as a basis for negotiations around forward funded contributions. As a principle the council will only require a level of contribution that it believes can be achieved without making a scheme unviable and thereby preventing its development. Policy GEN 7 'Recovery of planning obligations reduced on viability grounds' will be used to review and recover any reduced planning obligations, should a proposal deliver higher returns than the normal developer profit already accounted for in the agreed viability assessment.
3.24 The council will not require up-front payments of S106 contributions. Instead, stage payments will be agreed linked to on site housing or employment floorspace completions and included as part of the legal agreement. Recoverable costs for the council will include any administrative, legal and financing costs associated with both providing the infrastructure and its subsequent recovery through the planning obligations process.
3.25 The council will identify any agreed forward funded infrastructure schemes and monitor their repayment through planning obligations as part of its annual infrastructure funding statement.
Related documents
(Tablenote A) These costs represent the latest scheme forecast costs. The total scheme costs to be used in any calculation will be the latest scheme costs published in the council’s most recent Medium Term Financial Strategy.
(Tablenote B) External funding sources include the Department for Transport, Local Growth Fund and Local Transport Plan funding.
(Tablenote C) The council’s contribution to the total £69m identified in this column is £64m i.e. £5m has so far been received via S106 contributions to these strategic highway schemes (comprising some £1.8m Congleton Link Road, £1.6m A500 dualling, £0.2m Crewe Green roundabout, £0.4m Sydney Road bridge and £1m Middlewich Eastern Bypass).
Policy information
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