A long awaited consultation on increasing rates on developers via the Community Infrastructure Levy to improve services and infrastructure across Greenwich borough is now underway.
We’ve been waiting some time. In 2015 the council committed to review rates in 2018. That never happened.
I covered much about the new proposals in a post a few days ago here. The consultation gets off to a poor start by including the wrong year current rates were approved.
It then claims that rates “cannot be compared to other London boroughs with any degree of accuracy”.
Of course Greenwich is not central London and cannot expect to see similar rates as boroughs such as Westminster or Kensington and Chelsea.
On the flip side, it’s also not wise to expect similar rates with outer London borough like Barking and Dagenham or Havering. Greenwich sits in between (in various ways) and now has superb transport links particularly in areas such as Woolwich with the Elizabeth line and Greenwich with the DLR and tube. It is possible to look at boroughs that share characteristics in terms of transport, land values and demand.
Yet Greenwich seem content to keep certain rates lower than boroughs such as Newham and Tower Hamlets, to give just town examples. In some cases substantially so. Greenwich are not seeking to alter low rates for hotels and student accommodation despite the area’s increasing popularity.
For student accommodation, Greenwich seek to keep the existing rate which is £89.09 per square metre in 2023 compared to £189 per square metre in Newham and £447.31 in Tower Hamlets. Hotels show a similar gulf with many boroughs with good transport links and located between Zones 2-4.
With a World Heritage Zone in the borough, large tourist and hotel demand alongside a university and quick links to various world famous universities, is retaining low rates wise? Will it not see millions more in potential income lost?
Errors and missed opportunity
There’s a long history of mistakes being made when it comes to this crucial source of funding. Previously we’ve seen council reports before the Planning Committee include an incorrect rate. Then when a report by council officers on income was given to Greenwich councillors they compared with neighbouring boroughs – but didn’t include like for like numbers which flattered Greenwich.
By 2018 Greenwich were falling millions short of their own target but failed to review rates. By 2021 they were bottom in all of London.
In total their expectations of more than £20 million in CIL income between 2015 and 2021 was missed substantially, securing only £9.7 million.
Work belatedly begun in 2022 but plans to consult this spring were again missed. Now adoption is likely in mid 2024.
For every delay, developments are passed which see potentially large sums of lost revenue as Greenwich set rates below what was possible in 2015 according to a Viability Report at the time.
If they again adopt low rates for certain developments, there’s the risk of again missing their target (which is hardly ambitious to begin with under revised plans) and the borough will yet again miss out on improvements for years to come.
You can view the consultation and comment here.