Millions of square feet of development across the Oxfordshire region could be under threat as councils seek to hike community infrastructure levy payments.
Cherwell District Council has become the latest local authority to rethink its financing mechanisms and is currently consulting on proposals to introduce CIL on new industrial and logistics development.
The process will close next week.
Cherwell follows Oxford City Council, which last month announced plans for a five-fold increase of its CIL on research and development facilities.
Developer concern
The planned increases have been lambasted by developers, which are questioning how this approach squares with the “national mission” for economic growth, and the draft of the new National Planning Policy Framework specifically encouraging logistics development.
In Cherwell, developers including Tritax, Albion Land and Bicester Motion, have raised concerns about “right sizing” the CIL charges so that new development remains financially viable.
Tritax Symmetry has enabled businesses like HelloFresh, Warburtons, Bentley Designs, Ocado and Prodrive to grow in the region. Most recently, it has agreed to develop a new 600,000 sq ft facility for Siemens Healthineers at its Symmetry Park, which will reflect a £250m investment in Cherwell.
However, the proposed CIL increases would have added more than £6m to the Siemens development, potentially rendering the project unviable. Similarly, the viability of YASA’s new UK headquarters at the 444-acre Bicester Motion could have been at risk under the current CIL proposals.
Simon Parsons, director at Albion Land, which has brought businesses including Tesla, Evolito, Origin, Collins Aerospace, Teknos and David Lloyd Leisure to Cherwell, said there had to be a balance between the need to raise money for local infrastructure and ensuring development was viable.
“We support in the principle that new industrial and logistics development should help fund necessary infrastructure improvements – that’s crucial to achieve sustainable economic growth,” he told EG. “But the essential thing is to get the right balance and to ensure high-quality commercial development remains viable. This is critical if the district’s economy is going to continue to grow for the benefit of the community as a whole.”
Cherwell District Council’s proposed new levy is a cost of £110 per sq m on logistics development and £70 per sq m on industrial development. The charge is not expected to be in place until April 2025, with any sites that will have gained planning permission or outline planning permission, prior to this date escaping the charge.
Supporting housing delivery
Jean Conway, portfolio holder for planning and development management at the council, said the proposed CIL charge is expected to become a flexible new way for the council to generate funding to provide the housing and places of work that communities need.
“It’s our role to make sure developers provide funding for the correct infrastructure to support schools, active travel, open spaces or connectivity,” she said.
When Oxford City Council announced its proposed hike in CIL last month, developers including Stanhope, L&G and Brookfield warned that the plans would put major development in and around the city at risk.
The council wants to increase CIL charges on office and R&D development from £33.74 per sq m to £168.74 per sq m.
Oxford North Ventures, a jv between Thomas White Oxford, the development company of St John’s College, Stanhope and Ontario Teachers’ Pension Plan, said the increase would be “fundamentally detrimental” to its £700m Oxford North scheme, impacting the potential deliverability of the remaining 350,000 sq ft of development at the 1m sq ft project.
Oxford University Development, a joint venture between Oxford University and Legal & General has also raised concerns around the deliverability of its 44-acre Osney Mead site.
Figures from Oxford City Council show that despite CIL payments being collected there are still millions of pounds unspent. In the 12 months ended 6 April 2023, the total amount of developer contributions collected by the council but not spent topped £16.8m.
Image © Tritax Symmetry
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