Key information
Executive summary
This MD seeks agreement for TfL to pay £59,414 for officer support during 2017/18 on implementing the Mayor’s Community Infrastructure Levy (MCIL). There are no direct costs to the Mayor arising from this recommendation – TfL can recover these costs from the administrative charge which it is allowed to apply from MCIL monies collected by the boroughs and the Mayoral Development Corporations on the Mayor’s behalf.
Decision
That the Mayor:
1. Agrees to Transport for London’s transfer of £59,414 income to the Greater London Authority (from the administrative charge TfL is allowed to take from Mayor’s Community Infrastructure Levy (MCIL) monies) and the GLA’s use to fund the support the GLA give TfL in connection with MCIL.
Part 1: Non-confidential facts and advice
Under the Community Infrastructure Levy (CIL) Regulations (2010) (as amended) the Mayor is entitled to impose CIL charges on development across Greater London. The regulations (59 (2)) restrict the Mayor to funding roads or other transport facilities including Crossrail (the Elizabeth Line). The current Mayors Community Infrastructure Levy (MCIL) is used to contribute to the funding of Crossrail (the Elizabeth Line). Officers are currently working on amending MCIL rates to contribute towards the funding of Crossrail 2.
1.2 Implementing a new charging schedule, which sets out the rates the Mayor can charge on development, requires two rounds of public consultation and an examination in public led by an independent examiner. It requires attendance at consultation events, meetings with boroughs and developers and regular meetings with the borough MCIL collection officers to ensure the MCIL is collected efficiently. It also requires dealing with ad hoc CIL enquiries. Officers from the GLA London Plan Team support TfL colleagues in this work but this diverts them from other activity.
1.3 Under the CIL Regulations, TfL are entitled to take a fee of up to 1% of total MCIL revenues to cover their administrative expenses. MCIL is currently raising more than £100m per annum, and TfL has been applying around half of the allowable 1% in recent years. GLA officers have estimated the amount of time they spend on MCIL and believe a figure of £60,000 p.a. is a realistic sum for the amount of time GLA dedicate to MCIL. This represents 10% of the total administrative expenses TfL will claim for 2017/18.
1.4 The 35 CIL authorities across London act as collecting authorities for Mayoral CIL and can each apply up to 4% in respect of their administrative costs. During the last financial year (2016/17) the sum retained collectively by the 35 authorities in respect of Mayoral CIL collection was £6 million.
1.5 On the 12th December 2017, the Mayor signed MD2199 to undertake the second round of public consultation on the proposed MCIL2 to contribute towards funding Crossrail 2. The MD highlighted in paragraph 5.1 that the GLA’s costs of working on MCIL could be covered from the administrative fee TfL is able to claim from MCIL receipts.
2.1 As this MD seeks the Mayor’s approval of an intra-group financial transfer for an existing project, there are no new objectives or expected outcomes.
3.1 As this MD is seeking a financial transfer for an existing project, this does not raise any new equalities issues.
Links to Mayoral strategies and priorities
4.1 As this MD is seeking a financial transfer for an existing project, delivery of Crossrail 2, there are no new links to other Mayoral strategies or priorities.
Impact assessment
4.2 As this MD is seeking a financial transfer for an existing project, there are no new impacts to assess.
Key risks
4.3 MCIL is analogous to a tax on development. Total levels of MCIL received will vary in response to changes in the development cycle. TfL is confident that it will be able to afford future GLA costs around this level of funding, with these costs to be established on an annual basis to reflect work undertaken in any particular year.
5.1 Mayoral approval is requested for TfL’s transfer of £59,414(revenue funding) to the GLA from the administrative charge TfL is allowed to take from collected CIL monies. The GLA propose to use this to fund the support the GLA Planning team give TfL on the Mayoral CIL.
5.2 The transfer of the £59k identified above is in respect of 2017/18 activity undertaken by the GLA. TfL has confirmed that revenue funding is available from the administration charge allowed under the CIL regulations. Currently MCIL is raising more than £100 million per annum, so the £60,000 transfer represents a small proportion of the 1% administrative costs that can be applied.
5.3 This income from TfL will be placed into Planning Smoothing Reserve and will be used to fund the Planning team’s costs towards work on MCIL as and when required.
6.1 Transfers of funding between TfL and the GLA are governed by ss.121 (revenue) of the GLA Act 1999. Those sections provide that transfers from a functional body (such as TfL) to the GLA require mayoral approval and the only limitation that may be placed upon the use of such transferred funds is that revenue funding may be used only for revenue expenditure.
7.1 As this MD is seeking a financial transfer for an existing project, there is no new planned delivery.
Signed decision document
MD2248 MCIL (signed)