Greenwich Council is planning to formally review the sums it charges developers to build in the borough, amid concerns that the borough has missed out on millions of pounds that could help it improve facilities for residents.
Developers in many London boroughs are charged a Community Infrastructure Levy (CIL) to ensure that they contribute to services in the local area. But Greenwich has collected far less than other authorities, despite the huge amount of redevelopment going on in the north of the borough.
Greenwich’s situation is made worse by a 2013 agreement to give half of the CIL money it receives to TfL to help pay for Woolwich Crossrail station, after both Labour and Conservative governments declined to include it in the main funding package.
Because the sums are so low, Greenwich faces having to dip into the other half of its CIL kitty to pay off the £15m bill.
The amount Greenwich charges developers is lower than other boroughs – as low as £40 per square metre for residential schemes in Plumstead, Abbey Wood and Thamesmead, and £70 elsewhere. The lower rate for the northeast of the borough was set by a planning inspector after a public hearing.
A viability assessment conducted for the public hearing into Greenwich’s rate in 2015 found that different parts of the borough could withstand rates of between £60 and £230 – but Greenwich pushed for a £70 rate.
Lewisham’s equivalent rates are between £70 and £100, while across the capital, Brent charges £200 – leading to that borough collecting a £16m payout.
The council’s cabinet member for finance, Linda Perks, said Greenwich was now beginning the process of reviewing its rates, which were determined and introduced its previous leaders Chris Roberts and Denise Hyland.
“The CIL rate adopted in 2015 was the best rate that could be secured at the time but is lower than other London boroughs,” she said in a written response to Conservative councillor Spencer Drury.
“We are currently seeking expert advice to undertake the review of the CIL rate, with the process likely taking up to 18 months to adopt an updated charging schedule.
“The level of collection is being monitored closely and over the previous two financial years has been lower than would have been expected. CIL receipts are driven by commencement of development and so additional resources were secured mid-way through 2021/22 to increase capacity to monitor development and identify schemes that may have commenced without informing the council.”
CIL was introduced in England in 2010, but Greenwich only began using it in 2015 – after many of its biggest developments, such as Kidbrooke Village, had already been given planning permission. These are covered through the older Section 106 system, which is meant to mitigate a development’s impact on a neighbourhood.
Amounts fluctuate and the CIL system was introduced in different boroughs at different times, so comparisons can be difficult. Many boroughs have also missed a legal deadline to publish figures for last year.
However, just £1.01m was collected from Greenwich’s developers in 2020/21, adding up to £9.7m since the system was introduced in 2015.
But in Brent, the council collected £16.1m in 2020/21 alone. The northwest London borough has seen major redevelopment in the area around Wembley Stadium and introduced CIL two years before Greenwich, helping it capture more cash from developers.
Brent’s yearly windfall meant it could allocate £2 million to community projects including a new community centre, training projects for young people, sports schemes, street art and help for local blind people. It was also able to spend £12.1m on bigger schemes, including traffic and public realm projects.
Perks said that so far this financial year, £2m in total had been collected in Greenwich.
Revising rates from 2023 would mean Greenwich could still gain more from developments at Thamesmead Waterfront or Charlton Riverside, but it may be too late for areas such as the Royal Arsenal and Greenwich Peninsula, which are largely built out or already have planning agreements in place.
In addition, Perks said she was confident the low sums obtained from developers would not affect the council’s ability to pay for the Woolwich Crossrail station.
In 2015, the planning inspector found that a £70 rate would not be viable in Thamesmead, Plumstead or Abbey Wood because of low land values – adding that the council could review that rate in three years.
Berkeley Homes pushed back against a £70 rate for Woolwich and Kidbrooke, but its representation was rejected because of rising land values.
The inspector also agreed to put a zero rate on car parks for retail developments after representations from Ikea, which was to open its “eco-friendly” Greenwich store four years later.
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