As far as the former boss of Battersea Power Station’s redevelopment is concerned, the law is an ass.
In a letter to the government last year, ex-BPSDC chief executive Rob Tincknell makes his exasperation clear.
Phrases such as “not fit for purpose”, “comparing apples with pears” and “this cannot be right” abound as he offers his view on the Community Infrastructure Levy (CIL) costing his project £35m.
To be fair to Mr Tincknell, you can see his point.
Documents unearthed following a Freedom of Information request shed light on an apparent quirk in the law that meant, by definition, the developer could not claim back CIL payments if altered proposals had lower CIL commitments than had already been agreed.
So when Battersea decided to swap around some of its office and residential space between phases, it was landed with a bill for around £14m.
The problem arose as the residential space came at a higher premium than the office space, but that higher premium was subsequently applied to both areas.
Mr Tincknell’s letter points out that Battersea’s Malaysian owners were urged to follow through with the already-approved plans, the implication being that any minor changes (such as swapping space between phases) would not prove costly.
Imagine being urged to do something and then receiving a huge bill as a result.
Mr Tincknell adds in his letter that the paperwork relating to Battersea’s CIL payment had an extra “eight pages of algebra” to overcome what he describes as the two flaws in the regulations.
Rightly or wrongly, many developers have serious issues with the CIL.
Some describe it as a tax on development; others bemoan the costs of handling payments, or the inability to direct CIL payments to social improvements on their projects.
There are of course good counter-arguments to these points, and there is no shortage of press about housebuilders or developers reducing their affordable housing or CIL bill via viability assessments.
However, spending vast sums of money on consultants (at least £500,000 in Battersea’s case) just to work out what you have to pay next isn’t a good use of resources.
Those costs have to be passed on, and developers may begin to push down their initial CIL commitment in anticipation of that unexpected bill at a later date.
In response to our story this morning, the Ministry for Housing, Communities and Local Government told CN it was due to publish findings from a consultation on CIL regulations “in due course”.
Battersea’s woes suggest that any government review needs to consider how to make CIL easier to allocate, simpler to work out and more transparent for everyone.
That way, vast sums won’t be spent simply to pay consultants to do pages of sums for the sake of it.