Commuted sums to be an ineligible cost in Infrastructure Scheme

Minster of Enterprise, Tim Johnston MHK said in the House of Keys yesterday (January 30) that commuted sums will not be considered an eligible cost in relation to the Island Infrastructure Scheme.

The Member for Douglas North (Mr David Ashford MHK) asked the Minister for Enterprise, “how commuted sums for affordable housing are dealt with in relation to applications to the Island Infrastructure Scheme; and whether such sums are excluded from grant applications.”

Mr Johnston said that a “clear policy direction going forward should the Scheme open for further funding rounds, that it will be made explicitly clear in guidance that commuted sums will not be considered an eligible cost”.

Commuted sums

DfE Minister said a key objective in bringing forward the Island Infrastructure Scheme was to fully understand the feasibility and viability of developments on unoccupied urban sites and, in doing so, understand where support may be able to increase such viability and therefore accelerate development.

He said the Scheme does not seek to interfere with any established planning or building control process, therefore, any requirement for agreements on affordable housing provision, or resultant negotiation around commuted sums, remain entirely the responsibility of the relevant Government Department and developer under existing policies.

Adding, that to date, successful applicants to the Scheme have only been issued ‘Agreements in Principle’ subject to progression through to Planning Approval.

The reasons for such an approach is that it is only at this stage that the full forecast development costs, and wider obligations in respect of affordable housing or commuted sums, will be known to the developer.

Scheme and Guidance

Mr Johnston said: “The Scheme and Guidance are silent on commuted sums specifically, although Government fees and charges, which can often be significant and therefore impact development viability, are listed as potentially eligible costs when considering an application for support.

“Honourable Members, I am able to confirm that on the Agreements in Principle offered to date and based on the latest information available to the Department, there will not be any support issued towards commuted sums, should they ultimately be required as determined through the Planning process.

Minster of Enterprise, Tim Johnston MHK

“Furthermore, I am happy to confirm a clear policy direction going forward should the Scheme open for further funding rounds, that it will be made explicitly clear in guidance that commuted sums will not be considered an eligible cost.”