Brent's Community Infrastructure Levy funds at record levels but without government policy change unavailable to offset planned £16m cuts

 

SCIL: Strategic Infrastructure Levy NCIL: Neighbourhood Infrastrure Levy

The latest Brent Infrastructure Funding Statement showing how Brent Council has used the Community Infrastructure Levy (CIL)  in 2023-24 strengthenss the case for relaxation of the restrictions on spending of the funds raised. £143m of Strategic CIL remains unspent and £15.5m of Neighbourhood CIL. 

The Council's 2025-2026 proposes £16m of cuts to council services.

Strategic CIL cannot be used currently for the day to day running of the Council. The Lead Member for Finance in her Forward to the report states that the current shortage of funds for that provision can only be addressed by the Government increasing local government funding.

However, following a suggestion made by Liberal Democrat councillor, Anton Georgiou, Cllr Muhammed Butt and Cllr Shama Tatler have written to the Government LINK calling for more flexibility regarding CIL spending to relieve some of the pressure in the short term:

Easing restrictions does not mean abandoning fiscal responsibility, rather adapting to current realities and the challenges councils are facing. Councils can still practice sound financial management while using CIL more flexibly. Establishing clear guidelines and accountability for the use of CIL funds would ensure that the funds are used effectively and responsibly.

The figures speak for themselves:

 

CIL spending and allocation:

 

Neighbourhood CIL allocations and spend are reported in the Brent Infrastructure Funding Report and too detailed to include here but well worth reviewing. See LINK. 

Overview of area spending

 In addition to CIL Brent can also raise money through Section 106 agreements with developers and these have become significant particularly in housing. Again there is a significant amount of money unspent in the fund:

 

 

 

 

 301 'affordable units' were secured through Section 106 but only four were social rent:

Annual Report on spending of Brent Infrastructure Levy reveals large amount unspent

 

The amount of development in Brent generates Community Infrastructure Levy most of which goes to Brent, some to the GLA. 

The Borough Infrastrutcure Levy (this year £26m rounded) is split into Strategic expenditure and Neighbourhood projects expenditure.

 The amount collected in 2023-23 is on top of the amounts carried forward from previous years. This year, unallocated prior to 2022-23 was £61.5m.

There are restrictions around precisely what Strategic CIL can be spent on.  These are allocations for 2022-23 (actual spending of allocations may be in later years) amounting to £17m.

 

NEIGHBOURHOOD COMMUNITY INFRASTRUCTURE LEVY (NCIL)

£2m Neighbourhood CIL allocations were made in 2022-23 for 58 projects some which work across the borough though allocated to a particular NCIL neighbourhood. Note that the two Neighbourhood Forums that also have access to the NCIL made no successful bids this year:

Full details of the projects can be found in the statement embedded at the foot of this article. Note that not all projects allocated funding may actually come to fruition and unspent amounts are carried forward to next year.

SECTION 106 CONTRIBUTIONS

These are agreements made between the Council and developers that enable a development to go ahead by mitigating their impact. £10M was allocated in 2022-23 of which a significant amount went towards 'affordable' housing (Brent's definition). Only 21 of 462 units were at social rent.

CARBON OFFSET FUND

This is a much smaller pot and in 2022-23 £100,000 was distributed to 9 organisations working to reduce carbon emissions in Brent. It is well worth looking at these projects in detail in the full report below.

 

The full report is embedded below including details of Strategic CIL, Neighbourhood CIL, Section 106 projects and the Carbon Offset Fund projects.

Is this £85.6m flat purchase a 'Bargain for Brent'?

 

Developer's CGI

The two blocks ear-marked for Brent

There's an interesting article in the current New Statesman by  Will Dunn, entitled the 'The end of the housing delusion' that has many interesting insights, not least that the world's largest ratigs agency, S & P Global Ratings, has warned that property in London and the South East is over-valued by up to 50% and that there will be 'sticky, gradual decline' in prices.

The huge gap between almost static weekly pay and the value/price of homes has meant a financialised housing market creates more space for money than for people.  The decline in the value of state and private pensions means that houses are seen as retirement assets. With an expectation that the house will rise in value older people will hold on to them even when many of the rooms are empty. If prices plummet, a long over-due correction, they will hold on in the vain hope (and expectation) that that prices will rise again.

Dunn quotes Danny Dorling, 'it's such a large amount of money, that people are't in a position to accept that drop in their perceived wealth..We're just not ready for a fall that's a real fall, where it doesn't return again. And the more we don't accept the fall, the sharper we make the fall that actually occurs.'

Dorling remarks that we actually have more space than we have ever had before in the form of empty bedrooms.

So it is these potentially very difficult market conditions that Brent Council has been making acquisitions from private developers, either via Section 106 agreements or straight purchases. The latest is on the site of the former Euro-Car showrooms, bordered by Wealdstone Brook, Fifth Way and Fulton Road.  This to be approved at tomorrow's multi-agenda item Cabinet Meeting.

The aim is to buy a 999 year (less 3 days) lease on 294 of the 759 homes on the development. For this they will pay £85.6m (including fees but excluding Stamp Duty Land Tax and VAT) with expected completion in July 2026.

They say this works out at an average price of £290k per home.

The original Section106 proposal has been changed to remove Shared Ownership and change the tenure to London Affordable Rent and London Living Rent as below.

 The officers' report states:

From a housing demand perspective, whilst there is greater demand and longer
waiting times for larger family sized accommodation, the Council is always ableto allocate 1-bedroom homes. Additionally, the location of Fulton Road in
Wembley Park makes them more desirable. There are currently 799
households living in Temporary Accommodation that have a 1-bedroom need.

This is higher than 2-bedroom demand at 692 and 3-bedroom remains the
highest at 1,096. This highlights the benefit that Fulton Road as a development
will bring in meeting current housing demand.

London Living Rent (LLR) is an affordable housing product as an entry level
option to home ownership. Rents are set by the Greater London Authority (GLA) and are based on average incomes at a ward level. The intention for LLR is thatafter 10 years, the tenant would have benefited from paying a lower rent and build up savings to then purchase their home, possibly as a shared ownership product.

 

These are the latest LLR figures for Brent wards. The development is in Wembley Park ward:

 

See LINK for details on how these rents are worked out. Service charges will be in addition.
 

 The London Living Rent information for local authorities states:

Rents are below market rates so that the tenants are supported to make a regular monthly saving towards their deposit. At the end of the tenancy, they have the option to buy the accommodation they have been living in or to use their savings as a deposit on a different property of their choice.

However Brent wants to lift the commitment to enable  tenants to buy the LLR accommodation. Given what happned with 'Buy Your Own council homes this may be a good move, but may not appeal to potential tenants:

However, the GLA allows Local Authorities to request that LLR stays as rented accommodation in perpetuity meaning it would be classified as ‘Alternative Affordable Homes’. If the Council can secure permission for LLR in perpetuity, then the Council will be able to continue utilising these homes to deliver more accessible affordable housing. The Council’s intention is to lease Block D to a Council owned subsidiary to enable delivery of the 118 units as London Living Rent... The Council’s intention is to lease Block D to a Council owned subsidiary to enable delivery of the 118 units as London Living Rent.

The Council has submitted an application to the GLA for grant funding to complete the purchase of these homes. As this purchase is largely a S106 package and the overall percentage of affordable housing across the site is 40% (based on habitable rooms), then the grant available is capped at £28k per unit. Subject to GLA approval, this means that the total grant requested for this scheme is £8.2m.

 
In order to access this grant, the Council is required to enter a grant agreement with the GLA and delegated authority is bought sought for to the Corporate Director, Resident Services to enable this.

Given recent warning from the Council about some of its in-fill schmes, and proposed changes in Tenure to  meet increased costs there is reference in the report to a wider financial viability or financial risk assessment.

 

It appears ward councillors will only be consulted in the future and not before it was taken to Cabinet:

 

Consultation with Ward Members and Stakeholders

This paper will be circulated to all Ward Members.

 

 

Brent Community Infrastructure Levy & Section 106: what it has been spent on and the amount remaining

 

Last week the Brent Cabinet approved the annual Infrastructure Funding Statement with little discussion. Millions of pounds is involved so it is worth looking at it in some detail. To help readers I have extracted some of the tables. The full Statement with detailed commentary can be read HERE,

Brent Council introduces the Statement (extracts):

The Council has been collecting the borough’s Community Infrastructure Levy (CIL) since July 2013. CIL is a levy applied to most developments granted planning permission that commence, and is to help deliver the infrastructure needed to support the development of the area. CIL is also important in demonstrating to communities the benefits that new development can bring, including through key infrastructure projects, place-making and local improvements.

The borough CIL receipts can be broken down into three portions – the Strategic CIL, the Neighbourhood CIL and the Administration CIL. A Mayoral CIL of £60 per sqm is collected as well and passed on to TfL on a quarterly basis. The borough keeps 4% of this levy for administrative purposes. All London Boroughs are subject to this levy, with the money used to fund the Elizabeth Line and Crossrail 2

The Council also enters into Section 106 agreements with developers – a mechanism which makes a development proposal acceptable in planning terms. S106 agreements are focused on site-specific mitigation of the impact of development such as securing affordable housing or requiring improvements to an access road. CIL, on the other hand, is designed to raise funds for infrastructure needed generally as a result of an increase in development in an area, and is spent on community infrastructure projects across the borough.

 

Although the Council has had high CIL receipts compared to the majority of other London Boroughs, it is important to note that future years CIL receipts may not be as strong given the current financial and economic conditions in the UK which may affect the commencement of developments and subsequently, CIL receipts.

The  receipts from CIl and Section 106 and their use are one of the justifications that councillors use when challenged on the anount of development in the borough that is rapidly changing its face. Provision of housing during a housing crisis and the subsequent rise in Council Tax receipts are also quoted.

One of the controversial aspects is the amount of both Strategic CIL and Neighbourhood CIL that remains unspent or unallocated at the end of the financial year and is carried forward.

The actual amount spent in 2021-22 (rounded) was SCIL £7,058,222. NCIL £4,575,043 - TOTAL £11,635,265 of which CIL Admin was £681,441.

The amount collected in 2021-22 and the amount carried forward from previous years that has not been allocated (£60m) :

 STRATEGIC CIL

So what has the SCIL been spent on?:

South Kilburn

Wembley Park

There is a full description of the Olympic Way 'improvements' which follow the large expenditure on the replacement steps in previous years. The expenditure is justified in the Statement:

The improvements are a recognition that Wembley Park is an area of national and international importance. The high quality public realm supports the ongoing transformation of the area into a thriving, attractive environment where people want to live with access to shops and entertainment.

The North End Road/Bridge Road reconnection has yet to be signalised and buses are not yet using it avoid the stadium on event days to avoid delays and curtailment of services.

NEIGHBOURHOOD CIL

 

For the distribution of Neighbourhood CIL the borough is divided into NCIL areas including the two Neighbourhood Forums. Wembley continues to get a higher allocation on the basis that it is most impacted by new developments:

There is a description of many of the projects allocated funds in the Statement and a full list can be found HERE. I understand that not all projects progress to actually receiving the funds as there are various legal and financial hoops to get through.

 

SECTION 106 FUNDING

 

Section 106 is site specific and is funding that makes a development acceptable to Planning. It is sometimes a financial contribution but may also be an allocation of the housing approved as so-called 'affordable housing'. This returns to an argument familiar to readers about the precise meaning of affordable. As the Brent Poverty Commission said that only social housing was truly affordable to Brent residents, bear that in mind when looking at the figures for the housing contribution:

So just under 14% of the 'affordable' units (column 2)  are social rent and under 4% of the total units (column 3)  in the developments.

 Section 106 Financial Contributions

 What immediately struck me on looking at these figures was the amount, £3.5m,  spent on transportation  compared with the other areas.

Transportion includes: cycle parking, electric vehicle charging points, signage around Wembley Stadium, Roe Green/Kingsbury Road junction, hostile vehicle measures in Wembley Park around the stadium and 'Wembley Two Way Working'  including North End Road mentioned earlier under SCIL.

Full details of the projects funded can be found in the Statement.

 

 

 

 

Brent Community Infrastructure Levy spending 2020-21: Was distribution fair?

 

The Brent Infrastructure Fund Statement 2020-21 has now been published.  LINK It covers the Community Infrastructure Level (CIL) which includes Strategic and Neighbourhood elements, Section 106 and Section 278 Funding.

There are several headline items in the report. The first is the total amount of money in the CIL pot, money derived from the contribution of developers to the general infrastructure of the borough and second, the proportion of that which has not been allocated.

For Strategic CIL  (SCIL) -  out of £95m unspent more than half, £54m has not been allocated to any project. (Rounded figures)  £13m of Neighbourhood CIL (NCIL) was unspent of which £6.5m had not been allocated - slightly less than half.

 

STRATEGIC CIL

So what was SCIL spent on? Wembley got the majority of the funding and that is Wembley Park - Tokyngton Ward (Muhammed Butt's ward) rather than other parts of  Wembley.

Morland Gardens is the controversial redevelopment of the Adult Education Centre at 1 Morland Gardens, Stonebridge.

Details:

Wembley Two Way Working & Wembley North End Road - As identified in the Core Strategy and Wembley Area Action Plan, there is the need for new road connections and junction improvements to support the ongoing development of the  Wembley Growth area. These include two significant road improvement schemes which have been implemented to improve traffic flow and connectivity through the area.

The first phase of the Wembley Two Way working project was completed and operational on 22nd March 2020 and plans for the second phase and further improvements on First Way and South Way are being developed. The new North End Road connector to Bridge Road opened on 11th June 2021 ahead of the EURO 2020 tournament initially operating as a T junction. The Highways and Infrastructure Team are working with Transport for London on signalising the new junction by the end of the year.

Olympic Way Public Realm Improvements – The improvements are a recognition that Wembley Park is an area of national and international importance. The high quality public realm supports the ongoing transformation of the area into a thriving, attractive environment where people want to live with access to shops and entertainment.

Public and private investment for Olympic Way has involved a new treatment to the Bobby Moore Bridge, new hard and soft landscaping throughout, a new crossing at Fulton Road, new lighting, trees, street furniture, wayfinding, WIFI, a new public square, and replacement of the ‘pedway’ with steps, lifts and flexible covered space to form an iconic new entrance to the national stadium.

 

Morland Gardens Education Facility - Is an investment in skills and employability prospects for residents. Cabinet have agreed SCIL contribution towards the redevelopment of the existing adult education facility in Morland Gardens, Stonebridge. The new, mixed use redevelopment will provide an expanded and improved educational facility, along with workspace, a community space and 65 new council homes
 

NEIGHBOURHOOD CIL

 

The CIL Regulations 2010 stipulates that at least 15% of CIL receipts must be spent on neighbourhood project.  Of that 15% up to 25% may be spent on priorities identified by Neighbourhood Forums. Two are established in Harlesden and Sudbury Town and another is under consultation in Kilburn. Neither of the former were allocated anything and £1,5m of the total £2m went to Wembley. Brent Council points out that the projects are recorded in the originating borough but may be for services across the borough, Some of the projects are in initiatives of the Council itself.  

In line with the CIL Regulations, NCIL can be used to fund a very broad range of facilities such as play areas, parks and green spaces, public realm improvements, cultural and sports facilities, healthcare facilities, and other community facilities provided it is concerned with addressing the demands that development places on the area. The NCIL must be spent on priorities agreed in consultation with the local community. These priorities must be aligned with the needs of the local community. 

 
CIL funding has no immediate deadline and therefore is available on a rolling annual basis. It is important to recognise that CIL receipts can only be spent on capital projects, although associated revenue spending to maintain those capital items is also permissible

The discrepancy (often large) between the amount allocated and the actual spend in some one-year projects  is   likely due to the affect of Covid restrictions.  Other projects cober 2 - 3 years.

SECTION 106

Section 106 funds are secured through planning obligations and are site specific (rather than general) to mitigate the impact of development. Clearly the claim on 'affordable housing' needs to be broken down as 'affordable' is such a slippery concept in Brent usage.

 

SECTION 278 HIGHWAYS

 

Paid under the Highways Act where the development requires changes or improvements to the public highway.