DraftSupplementaryPlanningGuidance … Draft SPG CROSSRAIL 05... · 2010-03-10 ·...

May 2009

Draft Supplementary Planning GuidanceUse of planning obligations in the funding of Crossrail

Greater London AuthorityMay 2009

Published byGreater London AuthorityCity HallThe Queen's WalkMore LondonLondon SE1 2AA

www.london.gov.ukenquiries 020 7983 4100minicom 020 7983 4458

ISBN 978 1 84781 244 5

Cover photograph © Richard Linton, Greater London Authority

Copies of this report are available fromwww.london.gov.uk

4Preface

71 Introduction

112 Crossrail: Background and Policy Context

173 Funding Crossrail and Use of Planning Obligations

19Use of planning obligations

224 Crossrail contributions: formulae and standard charges

23What type of development, and in what locations?

28At what level should the charge be set?

32Indexation

355 The Community Infrastructure Levy

Contents

Published for public consultationThe London Plan February 2008 (consolidatedwith amendments since 2004)Spatial Development Strategy for London

How to give your viewsThis Draft Supplementary Planning Guidance hasbeen published for public consultation and yourcomments are invited.Please reference your comments to the relevantpolicy or paragraph of the document.All comments must be received by Monday 10August 2009. Please send your comments to:

By post:

Boris JohnsonMayor of London(London Plan Crossrail SPG)Greater London AuthorityCity HallMore LondonThe Queen’s WalkLondon SE1 2AA

By email:

Please send emailed comments to:[email protected] with ‘London Plan CrossrailSPG’ in the subject box.Please note, if you send in a response by email itis not necessary for you to also send in a hardcopy.

Any representations made in relation to the DraftCrossrail Alterations will be made available forpublic inspection.

Preface 4

Explanatory Note

This draft Supplementary Planning Guidance (SPG)has been prepared to accompany draft alterationsto the London Plan relating to the use of planningobligations (commonly known as Section 106agreements) to raise contributions towards thefunding of the Crossrail project.

These alterations are explained in detail in the textof the draft, but in short they:

Add a new Policy 3C.12A setting a policyframework consistent with the relevantGovernment guidance (Office of the DeputyPrime Minister Circular 5/2005) for the useof planning obligations to raise contributionstowards the funding of Crossrail, withsupplementary guidance to be provided ondetailed matters, including standard chargesand formulae to calculate the contributionthat might fairly and reasonably be soughtfor particular kinds of development;Clarify existing policies on priorities inplanning obligations, making clear inparticular the priority that should be givento the funding of Crossrail (Policies 6A.4 and6A.5); andLook ahead to the Government's introductionof the Community Infrastructure Levy (NewPolicy 6A.5A).

In its final form, this SPG will be the guidancereferred to in draft Policy 3C.12A. It is beingbrought forward in draft form now in order toinform consultation on these draft alterations, andit is likely that it will continue to be refined as thealteration process goes forward, to take accountof the comments made by consultees and ofchanging circumstances - development by centralGovernment of the proposed CommunityInfrastructure Levy (CIL), for example.

A number of changes have beenmade to the draftGuidance in the light of comments expressed inthe first, London Assembly and functional bodies,stage of consultation:

More information has been given about thecontribution that different uses make tocongestion in the busiest period on the railnetwork – themorning peak (paragraphs 4.10– 4.13)It has been made clear that the standardcharge should be calculated by reference tofloorspace based on a gross external areameasurement (para 4.20)The guidance on the circumstances in whichcontributions should be sought fromdevelopment in outer London has beenstrengthened (para 4.23)Further guidance is given on the need toensure that each development is consideredin the light of its individual circumstances(para 4.24)Guidance is given on how floorspace shouldbe measured (para 4.25)Guidance is given on the point at whichcontributions should be paid (para 4.29)The section on the Community InfrastructureLevy (Section 5) has been updated to takeaccount of developments since the draftguidance was first published.

There are two areas that affect the draft guidanceon which theMayor wishes to indicate that furtherconsideration is being given, and on which viewswould be particularly welcome:

First, a number of those commenting on theproposals have drawn attention to the needto consider whether some places at themargins of the central London charging areashould be exempted in whole or in part from

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the standard charge. Two arguments havebeen given for this: first, because thestandard charge would have a major impacton viability of development there; andsecondly, because there is an overriding needto fund another piece of strategic transportinfrastructure from any contributions fromthere.Second, representations have been madeabout the potential impact of a standardcharge on recovery from the currentdownturn in the development industry. Onepossible method of mitigating this impactcould be to set a reduced level of charge fora limited period from the date of formalintroduction of the charge.

On both of these points further work on this draftGuidance will be done by GLA officers during thepublic consultation period.

Please note that this Explanatory Note does notform part of the draft Supplementary Guidance.

6 Draft SPG - Use of planning obligations in the funding of Crossrail

1.1 The London Plan (published withconsolidated amendments since 2004 inFebruary 2008) is the Mayor of London'sstatutory spatial development strategy forLondon, providing the strategic frameworkfor London's sustainable development inorder to meet London's economic andpopulation growth to 2026. The policydirections underpinning the strategy are:

Accommodating London's growthwithin its boundaries withoutencroaching on open spaces;Making London a better city for peopleto live in;Making London a more prosperous citywith strong and diverse economicgrowth;Promoting social inclusion and tacklingdeprivation and discrimination;Improving London's accessibility; andMaking London a more attractive,well-designed and green city.

The London Plan makes clear theimportance of infrastructure, includingpublic transport, to ensuring realisation ofthese objectives. It particularly highlightsthe vital strategic role to be played byCrossrail. This consists of Crossrail 1, (whichwould link Heathrow airport, the West End,the City, Canary Wharf and the ThamesGateway), and Crossrail 2 (which wouldconnect Clapham Junction and Wimbledonwith Hackney). Funding is not currentlyavailable for Crossrail 2, and in what follows,“Crossrail” means Crossrail 1.

1.2 Against this background it sets out in policya framework for seeking contributionsthrough the planning system towardsfunding of the project:

Policy 3C.12A - Funding of Crossrail

In view of the strategic regional importanceof Crossrail to London's economicregeneration and development,developments which contribute to thetransport needs that the project will whollyor partly address will be required tocontribute towards its funding through theuse of planning obligations, in accordancewith relevant legislation and policy guidance.

The Mayor will provide guidance forboroughs and other partners for thenegotiation of planning obligationsrequiring, where appropriate, developers tocontribute towards the costs of fundingCrossrail having regard to:

The requirement for contributions fromdevelopment of up to £600 millionunder the arrangements for fundingCrossrail agreed with Government;Central government policy andguidance;Strategic and local considerations;The impacts of different types ofdevelopment in particular locations incontributing to transport needs; andEconomic viability of eachdevelopment concerned.

The guidance will include:

Criteria for identifying developmentsin respect of which Crossrail

1 Introduction 7

contributions should be required inaccordance with national policyguidance;Standard charges and formulae forcalculating fair and reasonablecontributions to be sought andguidance on how these should beapplied in specific localities anddifferent kinds of development; andThe period over which contributionswill be sought and arrangements forperiodic review.

The Mayor will, when considering relevantplanning applications of potential strategicimportance, take account of the existenceand content of planning obligationssupporting the funding of Crossrail amongother material planning considerations.

Policy 6A.4 Priorities in planning obligations

The Mayor will, and boroughs must, reflectthe policies of this plan (in particular Policy3C.12A), as well as local needs in theirpolicies for planning obligations (see ODPMCircular 5/2005).

Affordable housing; supporting the fundingof Crossrail where this is appropriate (seePolicy 3C.12A); and other public transportimprovements should be given the highestimportance. Where it is appropriate to seeka Crossrail contribution in accordance withPolicy 3C.12A, this should generally be givenhigher priority than other public transportimprovements.

Importance should also be given to tacklingclimate change, learning and skills, healthfacilities and services and childcareprovisions.

The Mayor will, when considering planningapplications of potential strategicimportance, take into account, among otherissues, the existence and content ofplanning obligations.

Policy 6A.5 Planning obligations

Boroughs must set out a clear frameworkfor negotiations on planning obligations inDPDs [Development Plan Documents]having regard to central government policyand guidance and local and strategicconsiderations (see Policy 6A.4) to theeffect that:

It will be a material considerationwhether a development makes anappropriate contribution or otherprovision (or some combinationthereof) towards meeting therequirements made necessary by, andrelated to, the proposed development;Negotiations should seek acontribution towards the full cost ofall such provision that is fairly andreasonably related in scale and kind tothe proposed development and itsimpact on a wider area; andBoroughs must refer to planningobligations that would be sought inthe relevant parts of the DPDs (suchas transport and housing policies).


The Mayor will provide guidance forboroughs and other partners on thepreparation of these frameworks. Inparticular, the Mayor wishes to develop withboroughs a voluntary system of poolingcontributions for the provision of facilitiesrelated to proposed developments.

Policy 6A.5A Community Infrastructure Levy

The Mayor will work with Government andother stakeholders to ensure the effectivedevelopment and implementation of theproposed Community Infrastructure Levy.

The Mayor will work with boroughs andother partners to establish a clear frameworkfor application of the CommunityInfrastructure Levy to ensure the costsincurred in providing the infrastructurewhich supports the policies in this plan(including public transport) can be fundedwholly or partly by those with an interest inland benefiting from grant of planningpermission.

1.3 This SPG is the guidance referred to inPolicy 3C.12A. It provides detailed guidanceon how these London Plan policies (3C.12A,6A.4, 6A.5 and 6A.5A) will be applied toensure the implementation of Crossrail.

1.4 Government has recognised that the deliveryof Crossrail is fundamental to the future ofLondon’s, and in turn the United Kingdom’s,economy. In order to ensure that Crossrailis fully funded, a funding package has beenagreed that involves securing resources fromthree main sources:

The taxpayer, via national government;

London businesses, including througha business rate supplement andthrough contributions by developers;andBorrowing against the fares to be paidby users of Crossrail, via Transport forLondon.

The focus of this document is on thedeveloper contributions referred to insecond element.

1.5 The impact, both individually andcumulatively, of development proposals willgive rise to additional pressures andcrowding on London’s transportinfrastructure. Crossrail is vital to alleviatethese pressures, and is national and regionalgovernment’s chosen method of improvingcapacity. Office of the Deputy PrimeMinister (ODPM) Circular 05/2005 makesit clear that contributions can be sought tomitigate the impact of a development (ParaB15) and that contributions can be pooled(Paras B21-B23). The circular (B25 and B26)requires that a policy requiring acontribution is set out in the DevelopmentPlan (in this case the London Plan) with thedetails left to supplementary planningguidance setting out likely levels ofcontribution. The Circular also provides forthe use of formula and standard charges(B33-B35) to ease understanding andtransparency.

1.6 The Government has made clear that itintends to introduce a CommunityInfrastructure Levy to help ensure thedelivery of large-scale infrastructure suchas Crossrail (see section 5 below). However,at the present time the exact form of the

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Community Infrastructure Levy is unclear.The guidance set out in this document willapply until such time as the Mayor issues arevision of this SPG on the implementationof these policies to accompany theintroduction of CIL.

1.7 Policy 6A.5 indicates that:

"Boroughs must set out a clear frameworkfor negotiations on planning obligations inDPDs having regard to central governmentpolicy and guidance and local and strategicconsiderations (see Policy 6A.4) … TheMayor will provide guidance for boroughsand other partners on the preparation ofthese frameworks. In particular, the Mayorwishes to develop with boroughs a voluntarysystem of pooling contributions for theprovision of facilities related to proposeddevelopments."

This SPG deals with use of planningobligations to secure contributions towardsthe funding of Crossrail (identified as apurpose for obligations in Policy 6A.4 of thehighest importance); it is likely that further,more general, guidance on use of planningobligations will be brought forward in duecourse.

1.8 This SPG sets out:

The background and policy context forCrossrail (section 2).The funding arrangements for Crossrail,and in particular the use of planningobligations to deliver the scheme interms of relevant legislation andGovernment guidance (section 3).

Details of the standard charges andformula that will be applied to workout the contribution to be made ineach case (section 4). This includeswhere the charge will apply, what typeof development will be covered, thelevel at which the charge will be set,and how it will be collected andmonitored.Information about the CommunityInfrastructure Levy (section 5).


2.1 Crossrail is a major cross-London rail linkproject developed to serve London and thesouth-east of England, providing fast,efficient and convenient rail access to theWest End, the City and Canary Wharf andlinking existing routes from Shenfield andAbbeyWood to the east to Maidenhead andHeathrow Airport to the west. It will ensureimproved services for rail users by relievingcrowding, ensuring faster journeys andproviding a range of new direct journeyoptions while also facilitating interchangebetween different public transport modes.It will also have wider social and economicbenefits for London, enabling the continuedgrowth of key economic sectors andlocations. It has three key objectives:

To support the development of Londonas a world city, and its role as thefinancial centre of Europe and theUnited Kingdom;To support the economic growth ofLondon and its regeneration areas bytackling congestion and the lack ofcapacity on the existing rail network;andTo improve rail access into and withinLondon. (1)

It will achieve these objectives by:

Addressing problems of inadequatecapacity on the National Rail andLondon Underground networks;

Improving accessibility to regenerationareas; andProviding transport capacity for thegrowth expected for London.

2.2 The project involves construction of sevencentral area stations (Paddington, BondStreet, Tottenham Court Road, Farringdon,Liverpool Street, Whitechapel and Isle ofDogs) providing interchange with LondonUnderground, National Rail, LondonOverground, the Docklands Light Railwayand London Bus services. It also involvesupgrading or renewal of existing stationsoutside central London. The route is shownin figure 1. From west to east, the route willconsist of:

Use of the existing Great WesternMainLine between Maidenhead andWestbourne Park, with a new flyoverstructure at Stockley to allow trains toaccess the existing tunnel to Heathrow,and a rail underpass west of ActonYard. A new line, within the existingrail corridor, will be provided betweenLangley and West Drayton.Enhancements will be made to stations,with the most significant works atEaling Broadway, Southall, Hayes andHarlington and West Drayton;A central section, largely through atwin-bore tunnel beneath centralLondon with portals at Royal Oak tothe west, Pudding Mill Lane to thenorth-east and a point just to the eastof Poplar Dock and the A1206Prestons Road in the Isle of Dogs inthe south east. New stations and

1 Crossrail Environmental Statement, Volume 1

2 Crossrail: Background and PolicyContext

11

associated structures, like ventilationshafts, will be provided along this partof the route;A northeast route section, using theexisting Great Eastern Main Linebetween Pudding Mill Lane andShenfield. This will include stationenhancements, with the mostsignificant at Ilford and Romford, andreinstatement of track betweenGoodmayes and Chadwell Heath; andA southeast route section, runningfrom a point east of the Isle of Dogsstation and the eastern terminus atAbbey Wood, where Crossrail will servea reconstructed station. It will runthrough a twin-bore tunnel to areconstructed station at CustomHouse, then follow the former NorthLondon Line alignment through the

Connaught Tunnel to Silvertown. AtNorth Woolwich a new twin-boretunnel will pass beneath the Thames.There will be a station at Woolwich,and two new tracks will run betweenPlumstead to a point east of AbbeyWood station to accommodate Crossrailservices on the North Kent corridor.

2.3 Powers to construct and maintain Crossrail,and the necessary planning and otherconsents and powers have been secured bythe Crossrail Act 2008. During its passagethrough Parliament, the Act was supportedby a comprehensive EnvironmentalStatement. Some enabling works for thescheme have already started; fullconstruction is expected to be underwayduring 2010, with services commencing in2017.

Figure 1 Cross Route


2.4 Crossrail is essential to delivery of thestrategic objectives of the London Plan,particularly accommodating London'sgrowth within its boundaries withoutencroaching on open spaces, makingLondon a more prosperous city with strongand diverse economic growth and improvingLondon's accessibility:

Demand for public transport into andwithin central London is nearingcapacity, with crowding on NetworkRail services and on LondonUnderground routes towards centralLondon (in particular, the West Endand the City) and the Isle of Dogs.Employment growth envisaged in theLondon Plan will further increasedemand, with employment in theWestEnd, the City of London and CanaryWharf projected to grow by about415,000 by 2026. The result is likelyto be a 40 per cent increase in demandfor peak hour public transport by 2025,particularly on radial routes into centralLondon. On certain limited areas of thenetwork, passenger flows are predictedto be higher than could be supportedin reality, with consequentialconstraints on demand arising.Increasing congestion on London's railnetwork therefore poses a threat toachieving the projected growth in jobsand economic activity envisaged in theLondon Plan;Crossrail will reduce current levels ofovercrowding on the Underground,particularly in the central area (allUnderground lines other than the

Northern Line should see a reductionin passengers following the opening ofCrossrail) and the Isle of Dogs. It willalso reduce crowding on some NationalRail services (particularly those usingLiverpool Street, Paddington,Fenchurch Street, Charing Cross andCannon Street);Addressing these capacity issues isessential to enabling the continuedgrowth in central and eastern Londonoutlined in the London Plan. Inparticular, Crossrail is critical tosupporting the growth of the financialand business services sectors in centralLondon and the Isle of Dogs, wherethere is market demand for additionaldevelopment capacity - providingincreases in rail capacity into each areaof 20 per cent and 50 per centrespectively. It will also providemuch-needed additional transportcapacity to the West End, supportingthe future development of that area asLondon's premier retail and leisurelocation envisaged in the London Plan.The scheme will also improve links toHeathrow, thereby supportingconnections for London's globalbusinesses. By linking these areas,Crossrail will help create a virtualunified economic and business core inLondon. It is also crucial to therealisation of regeneration andintensification opportunities aroundkey interchanges within the Central

Activities Zone (2) and to its east andwest;

2 Designated by Policy 5G.1 of the London Plan. See figure 2.

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Crossrail will also support delivery ofLondon Plan policies supporting thedevelopment and regeneration of eastLondon and the London ThamesGateway in particular. Crossrail willmake a vital contribution to improvingthe accessibility and attractiveness ofthe Thames Gateway to the east of theIsle of Dogs, through its cross-river linkto south-east London and its links tothe east including interchange with theDLR at Custom House;Crossrail will also help support growthin west London identified in the Plan.It will support developmentopportunities around Heathrow and atHayes/West Drayton/Southall, and willassist in supporting West London'snetwork of town centres; andCrossrail stations will lie within eightopportunity areas and areas forintensification identified in the LondonPlan. Together, these areas havespatial capacity for 216,000 new jobs- over half of which are planned for theIsle of Dogs - and 85,000 new homes(over one third in Stratford).

2.5 It is for these reasons that existing LondonPlan Policy 3C.12 (which deals with a rangeof new cross-London rail links within anenhanced London National rail network,including Crossrail) supports theimplementation of Crossrail:

“TheMayor will work with strategic partnersto improve the strategic public transportsystem in London, including cross-Londonrail links to support future development and

regeneration priority areas, and increasepublic transport capacity by: implementingCrossrail 1, a particularly high priority tosupport London’s core business areas…Thiswill help improve access to the CentralActivities Zone, town centres, majorOpportunity Areas and regeneration sitesand many parts of suburban London. DPDpolicies should identify development,intensification and regenerationopportunities that these new Cross-Londonlinks and national rail enhancements willsupport. They should identify and protectland used for rail purposes, and identifyproposals for major schemes.”

2.6 Crossrail is also strongly supported byplanning policy at national and regionallevels. Both in itself, and in the way itsupports creation of sustainablecommunities, it follows the generalprinciples of national planning policy set outin Planning Policy Statement 1 ("DeliveringSustainable Development"), particularly infacilitating and promoting:

Sustainable and inclusive patterns ofurban development by making suitableland available for development in linewith economic, social andenvironmental objectives to improvepeople’s quality of life, contributing tosustainable economic development

(see below); (3)

Delivery of sustainable developmentby addressing the causes and potentialimpacts of climate change, throughpolicies which reduce energy use andreduce emissions (for example, by

3 PPS1, para.5


encouraging patterns of developmentwhich reduce the need to travel by

private car); (4)

Social cohesion and inclusion, byaddressing accessibility (both in termsof location and physical access) for allmembers of the community to jobs,health, housing, education, shops,

leisure and community facilities; (5)

Sustainable economic development,through:

Helping ensure availability ofsuitable locations for industrial,commercial, retail, public sector,tourism and leisure developmentsso the economy can prosper;Providing for improvedproductivity, choice andcompetition;Actively promoting andfacilitating good qualitydevelopment;Ensuring the provision ofsufficient, good quality newhomes in suitable locations; andEnsuring that infrastructure andservices are provided to supportnew and existing economic

development and housing. (6)

2.7 Crossrail will also further the policyobjectives set out in Planning PolicyGuidance (PPG) 13 (“Transport”). This

emphasises the importance of integratedapproaches to transport infrastructure andland use planning, and to promoting:

More sustainable transport choices;Accessibility to jobs, shopping, leisurefacilities and services by publictransport; andReducing the need to travel,particularly by car. (7)

2.8 Crossrail will help enable management ofthe pattern of urban growth in London tomake the fullest use of public transport, andfocus major generators of travel demand incity, town and district centres and near topublic transport interchanges. By supportinga denser pattern of development, andenabling the accommodation of London’sgrowth within its existing boundaries, it willhelp reduce the need to travel. In providingsubstantial additional public transportcapacity it will help provide more sustainabletransport choices and reduce reliance on thecar.

2.9 At the regional level, Crossrail is stronglyendorsed in the London Plan. Policy 3C.12states that the Mayor will work withstrategic partners to improve the strategicpublic transport system in London, includingcross-London rail links to support futuredevelopment and regeneration priority areas,and increase public transport byimplementing Crossrail 1 and developingCrossrail 2 in the later period of the Plan,among other enhanced rail links. The

4 PPS1, para. 135 PPS1, para 166 PPS1, para. 237 PPG 13, para. 4

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importance of matching development totransport capacity is emphasised in Policy3C.2, which makes clear that the Mayor will,and boroughs should, consider proposals fordevelopment in terms of existing transportcapacity, both at a corridor and a local level.It states that where existing transportcapacity is not sufficient to allow for travelgenerated by proposed developments, andno firm plans exist for a sufficient increasein capacity to cater for this, developmentproposals should be appropriately phaseduntil it is known that these requirements canbe met.

2.10 It is also endorsed in the regional spatialstrategy for the South-East (8), whichidentifies inter-regional connectionsaround/through London as an overallpriority for transport investment, withCrossrail identified as one of the regionallysignificant schemes supporting this objective(Policy T7 and Annex 2) and helping deliveryof policies on management and investment(Policy T1), support and development ofregional hubs (Policy T4) and of regionalspokes (Policy T5), airports (Policy T6) andfostering an improved and integratednetwork of public transport services (PolicyT9).

2.11 In this document setting out the approachhe intends to take in carrying out hisplanning functions, “Planning for a BetterLondon” (July 2008), the Mayor reaffirmedthe importance of Crossrail, pointing out(page 20) that achievement of widerdevelopment priorities depends on ensuringthe necessary transport and other

infrastructure is in place. The documentwent on to say that it is for this reason thatCrossrail is so important, linkingeconomically critical places like HeathrowAirport, the West End, the City and CanaryWharf together, and also to places wherethere will be major housing developmentand new communities in the ThamesGateway. This point has been reinforced in" A new plan for London" (April 2009) wherethe Mayor reaffirms his commitment toCrossrail.

8 Regional Planning Guidance for the South-East (RPG9)


3.1 The funding arrangements for Crossrail wereannounced by the Government in October2007 and confirmed through the Crossrailfunding and governance agreement signedby the Department of Transport andTransport for London in December 2008.The project is expected to cost £15.9 billion(including contingency and provision forinflation), and agreement was reachedbetween the Government, the then Mayorand London businesses on a fundingpackage under which each contributesapproximately one third of the expectedcost:

The Government will provide a grantof over £5 billion through theDepartment for Transport duringCrossrail's construction;Crossrail farepayers will ultimatelycontribute around another third of thecost, with revenue servicing debt raisedduring construction by Transport forLondon and by Network Rail in respectof works on the national rail network;andLondon businesses will contributethrough a variety of mechanisms:

Direct contributions have beenagreed with some of the project'skey beneficiaries along its route.Canary Wharf Group has agreedto make a significant contributionto the project and will in additionbe responsible for delivering theIsle of Dogs station. The City ofLondon Corporation will make anadditional contribution from theirown funds, and will assist in

delivering additional voluntarycontributions from the largestLondon businesses. BAA has alsoagreed to make a contribution;The Government has introducedlegislation (before Parliament attime of writing) to enable top tierlocal authorities to raise businessrate supplements to fundeconomic development. Thisfollows theWhite Paper published

in October 2007. (9) Followingdiscussions with the Government,the Mayor indicated that, subjectto appropriate consultation, heenvisaged using these powers tolevy a supplement of two penceper pound of rateable valueacross London from April 2010,with relief for businesses with arateable value below £50,000,which will be used to service £3.5billion of debt raised by themayor during construction;The Mayor also indicated that heenvisaged securing contributionsfrom developers , both throughuse of planning obligations and,once it is implemented, theproposed CommunityInfrastructure Levy. This LondonPlan alteration and supplementaryguidance sets the frameworkunder which these contributionswill be sought.

3.2 The heads of terms between the Secretaryof State for Transport and Transport forLondon setting these arrangements out in

9 Business Rate Supplements: A White Paper (October 2007)

3 Funding Crossrail and Use ofPlanning Obligations

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detail have been published, and are availableon the Department for Transport website.(10)

3.3 The then Mayor set out his proposals forsecuring contributions from developers in aletter to the Secretary of State for Transportdated 4 October 2007:

"In addition, I anticipate securingcontributions from property developers whodevelop in the vicinity of the Crossrailstations on the following basis:

i. Subject to any appropriate obligationsand responsibilities (includingconsultations and examinations inpublic), I expect to bring forwardLondon Plan alterations with the aimof securing contributions under section106 of the Town and Country PlanningAct 1990 (or any other appropriatepowers that might come forward, suchas those proposed in the Government'sHousing Green Paper of July 2007, onwhich I would expect to be fullyconsulted) [a sentence follows that isredacted for reasons of commercialconfidentiality];

ii. This is on the assumption that anychanges that the Government makesto policy, guidance or legislationgoverning developer contributions willat least not diminish (apart from anyminor transitional disruption) theability of the GLA and Mayor (and TfLas a functional body) to secure such

contributions relative to the currentbody of policy, guidance or legislation;

iii. I will endeavour to ensure suchdeveloper contributions for Crossrailwill be consistent with Circular 5/05and other relevant Governmentguidance." (11)

3.4 The funding heads of terms indicate that£300 million will be raised in contributionsfrom development. Part of this sum will beraised in respect of certain specificdevelopments. It is expected that this willleave some £200 million to be raised by useof planning obligations through the policiesand arrangements outlined in this guidance.

3.5 In “Planning for a Better London”, theMayor indicated (page 30) that he would,as a priority, look at ways of using theplanning system to seek contributionstowards the cost of Crossrail fromdevelopment. He also stated that an earlyalteration would be made to the LondonPlan to enable use of the planning systemin this way.

3.6 The heads of terms also refer to a secondsum of £300 million to be raised from a"Statutory Planning Charge" (now referredto as the "Community Infrastructure Levy").The CIL is being introduced throughregulations to be made later in 2009 underthe Planning Act 2008. These are expectedto enable the Mayor to levy a charge on alldevelopment above a de minimis thresholdto help fund infrastructure needed tosupport growth identified in the London

10 Full text available on the DfT website.11 Full text available on the DfT website


Plan. The Government will provide additionalgrant to make good any shortfall if a CILcannot be raised by 2010.

Use of planning obligations3.7 PPG 13 makes clear that “planning

obligations may be used to achieveimprovements to public transport, walkingand cycling, where such measures would belikely to influence travel patterns to the siteinvolved, either on their own or as part of apackage of measures.” (12)It also states thatplanning obligations “appropriate in relationto transport should be based aroundsecuring improved accessibility to sites byall modes, with the emphasis on achievingthe greatest degree of access by publictransport, walking and cycling,” (13)and thatwhen entering into a planning obligationconsideration should be given to the usualstatutory and policy tests. By relievingcongestion and providing significantadditional public transport capacity in keyareas of London, Crossrail clearly meetsthese tests for the appropriate use ofplanning obligations.

3.8 PPG 13 also states that the developmentplan “should indicate the likely nature andscope of contributions which will be soughttowards transport improvements as part ofdevelopment in particular areas or on keysites. This will give greater certainty todevelopers as to what will be expected aspart of development proposals and alsoprovide a firmer basis for investment

decisions in the plan area.” (14)In this case,the London Plan policies set out earlierindicate the nature and scope of thecontributions that will be sought, while thisguidance gives detailed information abouthow these policies will be applied.

3.9 The Government has given guidance on theuse of planning obligations under section106 of the Town and Country Planning Act1990 (as amended) in Office of the DeputyPrime Minister Circular 5/2005. This setsout policy tests that should be taken intoaccount by authorities in the use of planningobligations. It states (15) that a planningobligation must be:

Relevant to planning;Necessary to make the proposeddevelopment acceptable in planningterms - in order to bring a developmentin line with the objectives ofsustainable development as articulatedthrough the relevant local, regional or

national planning policies; (16)

Directly related to the proposeddevelopment – obligations must be sodirectly related to proposeddevelopments that the developmentought not be permitted without them;for example, there should be afunctional or geographical link betweenthe development and the item beingprovided as part of the developer’s

contribution; (17)

12 PPG 13, para 8413 PPG 13, para 8514 PPG 13, para 8315 ODPM Circular 5/05, para B516 ODPM Circular 5/05, para B817 ibid

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Fairly and reasonably related in scaleand kind to the proposed development;andReasonable in all other respects.

3.10 The Circular expands upon the last two ofthese tests in paragraph B9: “For example,developers may reasonably be expected topay for or contribute to the cost of all, orthat part of, additional infrastructure whichwould not have been necessary but for theirdevelopment. The effect of theinfrastructure investment may be to confersome wider benefit on the community butpayment should be directly related in scaleto the impact the development will make.”Later in the Circular, general examples ofwhat might reasonably be achieved throughuse of planning obligations are given. (18)

These include mitigating the impact of adevelopment, where “a proposeddevelopment would, if implemented, createa need for a particular facility that is relevantto planning but cannot be required throughthe use of planning conditions…it willusually be reasonable for planningobligations to be secured to meet thisneed.” (19)

3.11 The Circular makes clear that where thecombined impact of a number ofdevelopments create the need forinfrastructure, it may be reasonable for theassociated developers’ contributions to bepooled in order to allow the infrastructureto be secured in a fair and equitable way. It

states that local authorities should set outin advance the need for this joint supportinginfrastructure and the likelihood of acontribution being required, demonstratingboth the direct relationship between thedevelopment and the infrastructure and thefair and reasonable scale of the contributionbeing sought. (20)

3.12 On procedural matters, the Circular statesthat where there are issues of strategic orregional importance that need to beaddressed through planning obligations, itmay be appropriate for these to be referredto in regional spatial strategies, which willset a strategic framework to be interpretedat the local level through the LocalDevelopment Framework. (21)The Circularalso emphasises the importance ofdevelopment plan policies in deciding whencontributions towards infrastructure are“necessary to make the proposeddevelopment acceptable in planning terms.”(22)

3.13 Finally, the Circular encourages the use offormulae and standard charges –quantitative indications of the level ofcontribution likely to be sought by a localplanning authority through a planningobligation towards the provision ofinfrastructure that is necessitated by a newdevelopment, noting that these can helpspeed up negotiations, ensure predictabilityand promote transparency. (23)It states thatwhere an authority proposes to rely upon

18 Circular 5/05, para B11 et seq19 Circular 5/05, para B1520 Circular 5/05, para B2121 Circular 5/05, para B2922 Circular 5/05, para B823 Circular 5/05, para B33


formulae and standard charges, they shouldbe published in advance in a publicdocument (paragraph B26 indicates thatmore detailed policies applying the principlesin the development plan ought to beincluded in Supplementary PlanningDocuments). (24)Standard charges andformulae should reflect the actual impactsof the development, and should comply withthe general policy tests outlined inparagraph 3.9 of this document. Theyshould not be applied in a blanket formregardless of actual impacts, but there needsto be a consistent approach to theirapplication. (25)

3.14 As shown in sections 1 and 2 of thisdocument, the London Plan recognises howcritical Crossrail is to London’s continuedsustainable development and economicsuccess, and how in its absence, thedevelopment capacity of some of London’smost important locations for commercialand residential development will beconstrained. For this reason, the Plan makesdelivery of the project a key strategicpriority.

3.15 Against this background, seekingcontributions towards the cost of theconstruction of Crossrail is relevant toplanning and a reasonable use of planningobligations. It is also an appropriate case forpooling contributions, and for use of theformulae/standard charge approach as setout in the Circular. Accordingly, London PlanPolicy 3C.12A states that:

"In view of the strategic regional importanceof Crossrail to London's economicregeneration and development,developments which contribute to thetransport needs that the project will whollyor partly address will be required to makecontributions towards its funding throughthe use of planning obligations, inaccordance with relevant legislation andpolicy guidance."

3.16 The London Plan further emphasises theimportance of Crossrail in indicating that itis among the purposes to which the highestpriority should generally be given in the useof planning obligations (see Policy 6A.4).

3.17 Section 4 of this document sets out andapplies a methodology that addresses theother Circular 5/05 tests are met, inparticular for identifying types ofdevelopment in particular locations inLondon for which it would be reasonable toseek a contribution, and a methodology forcalculating the amount of contribution tobe paid in each case.

24 Circular 5/05, para B3425 Circular 5/05, para B35

21

4.1 Policy 6A.4 of the London Plan sets outpriorities to be applied in the use of planningobligations, identifying public transport (andthe funding of Crossrail in particular) asbeing of the highest importance – withaffordable housing – in negotiating planningobligations:

"TheMayor will, and boroughs must, reflectthe policies of this plan (in particular Policy3C.12A), as well as local needs in theirpolicies for planning obligations (see ODPMCircular 5/2005).

Affordable housing; supporting the fundingof Crossrail where this is appropriate (seePolicy 3C.12A); and other public transportimprovements should be given the highestimportance. Where it is appropriate to seeka Crossrail contribution in accordance withPolicy 3C.12A, this should generally be givenhigher priority than other public transportimprovements.

Importance should also be given to tacklingclimate change, learning and skills, healthfacilities and services and childcareprovisions.

The Mayor will, when considering planningapplications of potential strategicimportance, take into account, among otherissues, the existence and content ofplanning obligations.”

4.2 Policy 3C.12A of the London Plan statesthat the Mayor:

Will provide guidance for boroughs andother partners for the negotiation ofplanning obligations requiring, where

appropriate, developers to contributetowards the costs of funding Crossrail havingregard to:

The requirement for contributions fromdevelopment of up to £600 millionunder the arrangements for fundingCrossrail agreed with Government;Central government policy andguidance;Strategic and local considerations;The impacts of different types ofdevelopment in particular locations incontributing to transport needs; andEconomic viability of eachdevelopment concerned.

The guidance will include:

Criteria for identifying developmentsin respect of which Crossrailcontributions should be required inaccordance with national policyguidance;Standard charges and formulae forcalculating fair and reasonablecontributions to be sought andguidance on how these should beapplied in specific localities anddifferent kinds of development; andThe period over which contributionswill be sought and arrangements forperiodic review.

This section sets out this detailed guidance.

4.3 In order to meet the tests set out in Circular5/05, the methodology used to assess whenit is appropriate to seek a contribution

4 Crossrail contributions: formulaeand standard charges

22

towards the construction cost of Crossrail,and the amount to be sought, must becapable of:

Demonstrating a functional orgeographic link between adevelopment and Crossrail that makesseeking a contribution reasonable inthe terms of the Circular;Providing a basis to demonstrate thatthe scale of contribution sought fairlyand reasonably relates to the proposeddevelopment concerned; andDemonstrating that the amount of thecontribution sought is directly relatedto the scale of the impact that thedevelopment concerned will have.

For the arrangements to work effectively,the broad levels of contribution set out inparagraphs 4.20 and 4.22 are necessary andappropriate in these terms.

What type of development, and in whatlocations?4.4 The first step on this methodology has been

used to identify the impact of development.It looks at patterns of crowding on railservices (National Rail and LondonUnderground) in London. Crowding costs,and changes in the level of passengercrowding, are key elements used in assessingthe costs and benefits of rail schemes, andare an established and well-understood wayof assessing the effects on transportnetworks of changing patterns ofdevelopment and assessing the impact thesehave. The methodology uses these to assessthe extent to which developments of

particular types, sizes and locations eithercontribute to, or exacerbate crowding. Itdoes this by considering three things:

How many trips are generated bydifferent land uses in different areasof London, and when. This has beenestablished using data from EnglishPartnerships (now Homes andCommunities Agency) on employmentdensities, standard databases of triprates by development types, surveysof trip rates by tourists and differenttypes of housing and occupancies byarea;The share of these trips likely to bemade by rail. This is based on analysisof the 2001 Census, which includesinformation about rail mode share byarea of residence and workplace bylocal output area; andHow rail crowding costs vary accordingto different trip patterns, lookingparticularly at different tripdestinations and time periods (“cost”here being worked out by applying a“crowding factor” - which takesaccount of passenger demand and acombination of seating and standingcapacity - to actual journey times oneach part of the network). These arebased on Select Link Analysisundertaken by consultants ColinBuchanan and Partners for Crossrail in2004, which assesses the proportionof time trips to Central London spendunder particular levels of crowding.

23

4.5 The methodology is set out in more detailin background reports from TfL’sconsultants Jones Lang LaSalle and ColinBuchanan. These will be placed on the GLA’swebsite.

This methodology has been used to workout which types of developmentcontributions should be sought for, andwhere, looking at:

Central London (an area based uponthe Central Activities Zone (CAZ)designated by Policy 5G.1 of theLondon Plan - shown in figure 2);The main business area of the Isle ofDogs (IoD) centred on the northernparts of Millwall and Blackwall wardsof the London Borough of Tower

Hamlets – the area designated by theLondon Borough of Tower Hamlets asthe “Northern Sub-Area” in theirformer Isle of Dogs Area Action Plan -see figure 3 below);Areas in outer London within 960m ofproposed Crossrail stations (zoneschosen because they represent a 12minute walk from stations; the areawithin which rail use is likely to be

highest); (26)andDifferent types of land use -commercial (ie office), retail, hotelsand residential development.

Figure 2 The Central Activities Zone

26 Paragraph 4.22 uses a figure of 960 metres as per PTAL guidance, but it is not thought that this makes an appreciable difference.


Figure 3 The main business area of the Isle of Dogs

4.8 Using this methodology, it has been foundthat:

Congestion on rail is predominantly apeak period issue, and the approachtaken here – consistent with the policytests in Circular 5/05 - is to focus onthe time of day when developments ofdifferent kinds make the mostsignificant contribution to crowding.The impact of development in termsof increased congestion and costs ofcrowding differs according to the useand location involved. The relativeimpact (where office uses in centralLondon – which have the highestimpact – are shown as 100) is shownin Table 1:

25

Outer London800m zones

Central London(CAZ/IoD)

Type of Development

22100Commercial

1264Retail

-44Hotels

106Residential

Table 1 Impact on the rail network in the AM peak (07:00-10:00) by location and land use

4.9 In summary, commercial development hasthe most impact, with residential having theleast. For commercial and retail uses,impacts are higher in central London thanouter areas, while for residential uses thepattern is reversed, reflecting differentchoices of transport modes for thecomparatively shorter trips from morecentrally-located homes. In central Londoncommercial development has an impact justover 50% higher than the next highest formof development, retail. Development incentral London has a significantly higherimpact than that in outer London. Forcommercial development, impact in outerLondon is about a fifth of that in the centre.

4.10 Circular 5/05 requires that standard chargesand formulae should reflect the actualimpacts of development and should complywith the general tests it sets out. Ofparticular relevance in deciding what typeof development and location the chargeshould apply to are the need to ensurecontributions are directly related toproposed development, fairly and reasonablyrelated in scale and kind, and reasonable in

all respects. In this case this has been doneby focussing on those places and uses wherea particularly clear link can be shownbetween the impact of additionaldevelopment and rail network crowding.This approach also meets the requirementin the Circular to show a functional orgeographic link between development andthe item being provided as part ofdevelopers’ contributions. (27)

4.11 Taking this approach and the informationprovided by consultants, it has been decidedthat contributions should be sought inrespect of office development, in the CentralActivities Zone and the northern part of theIsle of Dogs, which involves a net increasein office floorspace of more than 500 squaremetres. This is the form of development thatgives rise to the most substantial “impact”that Crossrail will mitigate:

The impact of development in outerLondon is comparatively low and it isunlikely to be cost-effective to seek toapply a standard charge;

27 Paragraph B8, Circular 5/05


The de minimis threshold excludingdevelopment that would result inadditional office floorspace of 500square metres or less has been set toreflect that developments below thissize are unlikely to have crowdingimpacts sufficient to meet the tests ofproportionality and reasonableness inCircular 5/05, the benefits of seekingcontributions from smallerdevelopments of this scale are likely tobe outweighed by the costs of enteringinto obligations and collectingcontributions and the large number ofsmaller developments would makeapplication of a policy of this kinduneconomic to administer.

4.12 Congestion pressure on the network is at itsworst during the morning peak period (7 -10am), and most of this pressure is due topeople travelling to their place of work. It isthese movements which require themaximum enhancement of capacity whichwill be provided by Crossrail, and without itfuture development for employment useswill be increasingly unsustainable. The threehour morning peak period can be brokendown into two shoulder hours (7 - 8am, 9-10am) and one peak hour (8 - 9 am), whichhas the highest daily level of congestion.The additional capacity from Crossrail, whichis necessary for office development will alsosupport sectors like retail and hotels, whichlargely generate their peak demand on thetransport network at less congested times.

4.13 The original analysis assumed thedistribution of trips by all land uses withinthe morning peak were the same. Moredetailed analysis suggests that this is not

the case with trips related to retail, forexample, being more heavily concentratedin the shoulders of the morning peak. Majorretail centres and stores within the CAZcommonly open between 9.30 and10.00 and trading generally builds up in themorning peaking around lunchtime. Staffingarrangements match these opening timesand build up in demand. Other shops andcatering outlets in central London do openearlier, but these are often serving acommuter market and thus open before themost congested times (7 - 8 am or earlier),meaning workers travel either before thepeak begins, or in its earlier less crowdedshoulder. This is borne out by the patternsof exits from Underground stations, whichshow that those stations serving areas whereoffice employment predominates (such asBank and Monument, Canary Wharf orChancery Lane), a high proportion occur atthe height of the morning peak - with up to8 per cent of all passenger exits during theday occurring in the peak 15 minutes around9 am. For stations in the West End with afar higher proportion of retail and leisureemployment, the proportion of passengersarriving in the peak 15 minutes does notexceed 5 per cent of the days passengers,and the proportions of exiting passengersdoes not fall off to the same extent as thoseserving predominantly office-basedlocations.

4.14 A similar issue applies to hotels. Shiftworking is more common, with relatively fewstaff working 9am - 5pm; shifts commonlystart at 5,6 or 7 am for catering, receptionand concierge staff. Housekeeping stafftend to work diverse shifts starting frombetween 5.30am - 9am. Hotel tourist guests

27

tend to avoid travelling in the peak period,while business guests are more likely to usetaxis, being less familiar with the city.

4.15 As the impact of development is at its mostacute at the busiest part of the am peak,this is the point at which it can be shownmost clearly that development is creatingthe need for a particular facility – Crossrail– that it is reasonable to use planningobligations to help fund the infrastructurerequired. At this point, there is clearevidence that office development is themost substantial contributor to congestion,and it is therefore reasonable to seekcontributions from them.

4.16 This approach focuses on destinations.Consideration has been given to whether itis reasonable to seek contributions fromother uses (predominantly residential inouter London). Table 1 above shows thatoutside of the central London area the‘harm’ caused to the network bydevelopment is much less and as such itwould be more difficult to require localauthorities to seek a contribution from broadclasses of development along the linesenvisaged in this SPG. Congestion is causedby concentrations of development to whichpeople need to travel at peak hours, and itis because of this impact that it is reasonableto seek planning obligations from themunder the tests set out in Circular 5/05. Itwould be likely to be unreasonable as wellas uneconomic to try to seek contributionsfrom residential developments in outerLondon, and many centres of employmentin outer London have jobs substantially filledby people living nearby who cause very littlecongestion on rail links to central London

(in those that have a wider impact it maywell be legitimate to seek contributions –see paragraph 4.23).

4.17 In short, the approach taken has been tofocus on the type of development havingthe most direct impact on rail capacity –office development in the area of centralLondon shown in Annex 1 and the northernpart of the Isle of Dogs. This also restrictsthe number of applications in respect ofwhich a contribution will have to be sought,minimising the administrative and costburden on planning authorities and also theimpact on other planning obligations. Thisapproach is in compliance with the guidancein Circular 5/05.

At what level should the charge be set?4.18 The second step is to use this information

as the basis for apportioning contributionsacross the different uses and locations. Todo this, assumptions have beenmade aboutthe likely patterns and amount ofdevelopment between 2008 and 2026 (theperiod covered by the current London Plan).Given the focus on offices in centralLondon/IoD, these have been based oninformation about historical and futureoffice (Use Class B1) completions held byconsultants Jones Lang LaSalle (JLL), testedagainst data held by the Greater LondonAuthority. A de minimis threshold of 500 sqm has been applied.

4.19 Using these data, it is possible to makeassumptions about the likely average levelsof additional office development in centralLondon/IoD. A prudent approach has beentaken to this, based on:


Taking an upper case based on aprojection of historic development data2000-2008;Taking a lower case, assuming a lowerlevel of development, removingexceptional years from the data; andSetting a central case – the median ofthe upper and lower cases.

This approach is prudent because it looksover a complete development cycle(2000-2008), over which there have beenvarying levels of development activity.

4.20 On this basis, it is assumed that there will,in an average year across the developmentcycle, be 371,609 square metres (netinternal area) of office development eachyear gross. As it will usually only beappropriate to seek contributions in respectof increases in office floorspace and theadditional impact it will have on thetransport network, a 50% net increase-to-gross development area ratio (based onhistoric precedent) is assumed, giving anincrease in office floorspace figure of185,804 square metres (net internal area)per year. Further adjustments have beenmade to:

Account for “leakage” due to schemesinvolving changes of use or ownersdeciding to retain existing buildingrather than redevelop;Allow for development taking place inthe first two years followingimplementation of this policy, underplanning permissions granted in

advance without provision for aCrossrail contribution; andEnable a cautious view to be taken ofthe likely yield of a standard charge ofthe kind proposed here in 2010 and2011, during a period of likely recoveryfrom particularly difficult marketconditions.

These result in an average figure of 137,848square metres of net additional officefloorspace in reasonably benign economicconditions.

4.21 It is important to bear in mind that thesefigures are based on a medium to long-termview. There will be years in which the levelof development will be more or less thanthe figures given here. They are, however,based on experience of two property marketcycles, including the relatively severeconditions of the early 1990s.

4.22 The £200 million to be raised towards thecost of Crossrail under the funding heads ofterms (see paragraph 3.4 above) has beenapplied to this figure to arrive at a standardcharge per square metre on increases inoffice floorspace (net internal area). In orderto simplify calculation of the charge bydevelopers and planning authorities thischarge rate based on net internal area hasbeen converted to one based upon grossexternal area measurements (see paragraph4.25 below). This is because gross externalarea (GEA) is more commonly used in theplanning and development processes. Forthe purposes of this conversion it is assumedthat, on average, the net internal area of adevelopment will equal 75 per cent of theGEA. This results in a charge of £160 per

29

square metre GEA of net additional officefloorspace (or £14.90 per square foot GEA)(28) for all office development involving anet increase of more than 500 square metresGEA in the central London area shown inAnnex 1.

4.23 The circumstances that exist in thedesignated part of the Isle of Dogs justify adifferent approach. Growth in this area isparticularly dependent upon the provisionof additional transport capacity and ensuringtransport resilience. The acceptability inplanning terms of further substantialdevelopment on the Isle of Dogs will beparticularly dependent upon the additionalpublic transport capacity provided byCrossrail, in terms of transporting additionalemployees into the area, and providing bothfurther choice and ensuring greaterresilience through provision of someredundancy should one of the existing railservices in the area (the Jubilee Line andthe Docklands Light Railway) fail or have torun at reduced capacity. Canary Wharf is thebusiest station on the London Undergroundnetwork served by only one UndergroundLine, and this level of dependency on analready high volume line is a key constrainton further development in the area,presently and into the future. These impactsare likely to become particularly acute in theperiod after 2016 as total employment inthe area increases above 145,000. By 2026if Crossrail is not built, the problems ofcongestion on rail links into the IoD wouldbe substantially higher than those in theCAZ to the extent that there would belimitations on the ability to grant planning

consent in ways consistent with national andregional planning policy (and in particular,London Plan Policy 3C.2 on matchingdevelopment to transport capacity).

4.24 In view of this, in accordance with the policytests in Circular 5/05 (and in particularconsidering what is needed to bringdevelopment here in line with the objectivesof sustainable development) and theguidance in PPG 13, a contribution at ahigher level than that sought in centralLondon will be sought in respect of all officedevelopment involving a net increase ofmore than 500 square metres in the part ofthe Isle of Dogs shown in figure 3. Recentagreements for Crossrail contributions inrespect of sites in the area have been on thebasis of £218.30 per square metre GEA , andthis will be used as a benchmark fornegotiation in this area.

4.25 Paragraphs 2.1 – 2.4 of this guidancedescribe the Crossrail route through London,and the planning needs it will fulfil acrossthe capital. Outside the CAZ and the Isle ofDogs contributions should be sought wherethe nature of what is proposed, its locationand circumstances make it appropriate underCircular 5/05 and development plan policiesin the London Plan (particularly policies 3C.2and 6A.4) and borough local developmentframeworks to seek a Crossrail contribution.This is likely to be particularly the case:

In relation to applications fordevelopment in the vicinity of Crossrailstations. Account should be taken ofthe fact that rail use is generally likely

28 At April 2010 prices – see para 4.19 for indexation


to be highest within a 960m radius ofa station (representing a 12 minutewalk), but circumstances of a particularapplication may mean it is reasonableto seek a contribution from adevelopment further away;In locations where the impact of adevelopment in terms of additionalcongestion will be mitigated by theadditional public transport capacity andcongestion relief Crossrail will bring; orIn other circumstances in whichCrossrail may be necessary in order toenable development to proceed in linewith the objectives of sustainabledevelopment.

In these circumstances, the standard chargefor central London should be the startingpoint for negotiation.

4.26 Circular 5/05 is clear that where a standardcharge and formula approach is taken, itshould not be applied in a blanket formregardless of actual impacts, but that thereneeds to be a consistent approach to theirapplication. Although the charge has beenset at a level that should not affect viability,the Mayor will consider carefully any casein which it can be demonstrated that makinga contribution under this guidance wouldhave an effect on the economic viability ofa development, or would otherwise beunreasonable or disproportionate. In caseswhere applicants consider the viability of adevelopment could be undermined byapplication of the standard charge, financialappraisals should be submitted to justify thisposition.

Measurement of floorspace

4.27 For the purposes of calculating the chargein each case, floorspace should be measuredto include the overall dimensions of thebuilding on each floor both above and belowground, including the thickness of allinternal walls, half the thickness of partywalls and the full thickness of external walls.If a site covers more than one property,party walls should be measured as internalwalls except for those party walls toproperties not falling within the site. Grossfloorspace should include the following:

Stairs and lift shafts (for each floor);Lobbies, corridor, reception areas;Cloakrooms and toilets;Storage and roofed plant areas (seebelow);Kitchens and cafeterias etc;Operational voids, e.g. for airconditioning ducting (to be measuredfor each floor); andVaults.

And exclude:

Voids in atria (ground floor onlymeasured);Internal lightwells; andScreened but unroofed plant area orplant areas and other operational voidswhich are not reasonably capable ofcommercial or residential use.

Double/triple height areas should bemeasured once (e.g. conference halls,theatres etc).

31

Indexation4.28 The figures quoted above for central London

and the Isle of Dogs are at April 2010 prices.Indexation – using the Consumer Price Index(CPI) – will be applied from April 2011forwards.The rate which will apply will becalculated at the point that the Section 106payment becomes due (see paragraph 4.29below), not when the planning permissionis granted.

Reporting, monitoring and review

4.29 Transport for London will publish regularmonitoring reports on the construction ofCrossrail, and on the collection andapplication of the sums raised under Policy3C.12 of the London Plan and thissupplementary guidance. This guidancecovers the period between the date ofpublication and 2026 - the end date of thecurrent London Plan. The Mayor intends tokeep the position regarding the funding ofCrossrail, the appropriate contribution to bemade by development, the impact of thispolicy on wider regional and local policieson planning obligations and progress withimplementation of the CommunityInfrastructure Levy (see section 5) underreview, and may publish further guidance indue course covering this and further periods.This approach will enable account to betaken of periods when there is more or lessdevelopment taking place over the periodduring which this policy will apply.

Collection

4.30 The Mayor will seek to agree payment ofthis standard charge through planningobligations in respect of applications he

determines himself, and will take accountof the inclusion of such a provision whenconsidering applications referred to him anddeciding whether to direct refusal. For otherapplications, boroughs should include theCrossrail standard charge in planningobligations they negotiate with developers.In cases where no such provision is made,the Mayor may make representations toministers asking them to call such cases infor their determination.

4.31 Contributions will be payable at the pointat which development commences, unlessother arrangements for payment are agreed.In particular, where it can be demonstratedthat the development would otherwise beunviable or that the size or nature of thedevelopment makes it appropriate,payments may be related to occupation ofa phase or of the completed development.

4.32 The Mayor is keen to ensure that inclusionof provision for contributions towards thecosts of Crossrail in planning obligationsdoes not cause unnecessary delays to theplanning process. He intends to agree aprotocol with boroughs regarding issues likejoint approaches to negotiation andcollection and the arrangements for reviewset out in the previous paragraph. Inparticular, he will work with the boroughs,developers and other stakeholders todevelop model clauses for inclusion inagreements. The protocol will also providemore detailed advice on payment triggers.


Consistency with Government policy testsand viability

4.33 In developing this guidance, the Mayor hasbeen particularly mindful of the need not toseek contributions at such a level thatdevelopment will not be financially viable,or that the patterns of development acrossdifferent parts of London are likely to bedistorted. Care has been taken to ensure theamounts set out in paragraphs 4.20 and 4.22accord with the tests set out in Circular 5/05and, in particular, those of proportionalityand reasonableness and the likely impactson development. Independent professionaladvice has been taken from Jones LangLaSalle about the likely impact of a policyseeking contributions of the order suggestedhere. Their advice is set out below:

Any policy of this kind will affecteconomic decision-making to somedegree. However, a low, predictableand easy-to-calculate standard chargewill be more easily accepted by theproperty industry;Leakage due to refurbishment (asdistinct from redevelopment) orchange of use is likely at the margin.However, a combination of planningpolicy (reinforcing, as the London Plandoes, the role of the CAZ), the historicpull of Central London and basing astandard charge on net floorspaceincreases should keep this to aminimum;Developer acceptability will also beimproved by a standard charge onlybeing payable on the implementationof consents;

A standard charge based on netincreases in floorspace will impactparticularly on locations with little orno pre-existing development – such asthe northern part of the Isle of Dogs.However, given the low values ofalternative uses in such areas and theclearly defined commercial locations,this should not be a significantdisincentive;There will be periods during thecurrency of this policy when there willbe less development, and those wherethere will be more. It is, for instance,being put forward at a time when thereis low occupational demand togetherwith a lack of bank lending capacityand most informed commentators arepredicting at least two years forconditions to stabilise. With this inmind, a cautious view should be takenabout the yield of any standard chargein 2010 and 2011;Taking all these factors into account,a standard charge of up to £15 persquare foot (GEA) on net additionalfloorspace (equivalent across CentralLondon of £7.50 psf on consentedspace) should be capable of beingabsorbed into development costsduring most of the economic cycle incentral London, as should thebenchmark figure suggested inparagraph 4.22 in respect of the Isleof Dogs; andIn the same way, there is likely to besome impact on planning authorities’ability to use planning obligations forlocal priorities (both the Corporationof the City of London andWestminster

33

City Council have standardcharge-based approaches). However,this is mitigated by restricting thescope of this policy to officedevelopment.


5.1 London Plan Policy 6A.5A states that:

"The Mayor will work with Government andother stakeholders to ensure the effectivedevelopment and implementation of theproposed Community Infrastructure Levy.

The Mayor will work with boroughs andother partners to establish a clear frameworkfor application of the CommunityInfrastructure Levy to ensure the costsincurred in providing the infrastructurewhich supports the policies in this plan(including public transport) can be fundedwholly or partly by those with an interest inland benefiting from grant of planningpermission."

5.2 This section explains what the CommunityInfrastructure Levy is, and the process thatis being followed to develop and implementit. It also explains in more detail theapproach that will be taken by the Mayorregarding its application in London.

5.3 The Government has announced that itintends to introduce a CommunityInfrastructure Levy. It is proposed that thiswill be a standard charge decided bydesignated charging authorities and leviedby them on new development; it is intendedto raise resources to help fund delivery ofinfrastructure from the private sector, whichbenefits from it. The Planning Act 2008contains powers for ministers to implementthe CIL by regulation, and these areexpected to be consulted on later this yearand come into force by April 2010.

5.4 Although the details of the new system –and how it would be implemented in Londongiven the Capital’s unique circumstancesand institutional arrangements for planning– are still being developed, it is likely thatthe CIL will operate as follows. (29)

The 2008 Act sets out whichauthorities will be empowered to raisethe CIL (“charging authorities”). Theseinclude the Mayor and the Londonboroughs;Each charging authority will identifyand cost the infrastructure needed tosupport the development of their area.It is likely that there will be a list of thekinds of infrastructure that may befunded through the CIL; theGovernment has made clear that‘things usually thought of asinfrastructure – such as transport andflood defences’ will be covered by thedefinition;Charging authorities will then preparea ‘charging schedule’ setting out therate and/or the formula determininghow the CIL will be calculated in theirarea;These charging schedules will be testedthrough an examination in public;The amount of CIL to be paid by adevelopment will be calculated at thetime planning consent is granted, andwill be payable at the time whendevelopment starts. Failure to paycould result in a legal requirement tostop development.

29 Department for Communities and Local Government, “The Community Infrastructure Levy”, August 2008

5 The Community InfrastructureLevy

35

5.5 The Government is considering whetherthere is a case to restrict the use of planningobligations following the introduction of theCIL. While use of the CIL by authorities willnot be mandatory, one option underconsideration is that contributions towardsstrategic infrastructure currently collectedby means of the kind of standard chargeand formula approach outlined in thisdocument should be collected solely throughCIL by restricting the scope of planningobligations. Other options include reducingthe scope of planning obligations througha narrower set of criteria than thosecurrently set out in Circular 5/05. TheGovernment has also indicated that it willbe considering how authorities should movefrom one system to the other, and theconsequences this will have for development– in particular for areas with tariff typepolicies which may need revision. They havestated their belief that existing tariffschemes should, over time, be migrated toCIL, but they are also considering how bestto phase any reduction in scope to minimisetransitional issues and over what timescalethat reduction should take place. (30)

5.6 The Government has stated that the LondonPlan should incorporate the spatial elementsof transport, economic development,environmental and other strategic policiesfor London, adopting an integratedapproach embracing all aspects of physicalplanning, infrastructure development andother policies affecting or affected by thedistribution of activities. To further this role,the Government proposes that the Mayorshould have the power to set a CIL chargeto deliver key infrastructure needed tosupport implementation of the London Plan.

5.7 The details of the CIL regime and of how itwill be applied in London are still beingdeveloped. As the details of the new systememerge, the Mayor will work with boroughsand other partners to develop an effectiveand cooperative framework for applicationof the CIL, particularly to ensure it is appliedboth to support the policies set out in theLondon Plan and more local priorities. It islikely that this will include arrangements formoving from the approach outlined in thisdocument with regard to planningobligations to the CIL.

30 DCLG, “The Community Infrastructure Levy”, August 2008, Para.5.4-5.11


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DraftSupplementaryPlanningGuidance … Draft SPG CROSSRAIL 05... · 2010-03-10 ·...

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Transcript of DraftSupplementaryPlanningGuidance … Draft SPG CROSSRAIL 05... · 2010-03-10 ·...