Councillors in Penryn have debated whether plans to make developers pay towards local infrastructure would provide a fair division of cash between builders and the community.

The Community Infrastructure Levy (CIL) is a charge which will apply to all new building, at different rates depending on site use and location, which would be collected by Cornwall Council to pay for new infrastructure such as roads and schools, with a percentage returned to local councils.

In Penryn, which falls into zone three, any residential development from one house to a new estate will pay £100 per square metre for free-market housing or £60 for affordable housing, while large or out-of-town retail outlets and restaurants or edge of town businesses will all pay £100.

Strategic sites set out in Cornwall Council's Allocations Development Plan Document, or in a local neighbourhood plan such as Penryn is producing, would not be subject to CIL but to section 106 agreements tying the contribution to specific infrastructure projects related to the development. A neighbourhood plan would also increase the amount of CIL from any development that would be given to the local council.

Councillor Rich Mitchell questioned why the calculations for CIL payment rates included an assumption that developers should get a guaranteed 20 per cent profit on what they build, thereby driving down the amount that councils would receive.

But Councillor John Langan replied: "They're giving them a 20 per cent margin, which is pretty normal."

Councillor Mark Snowdon said: "The average is 17 per cent. If the development isn't making 20 per cent profit then it would cut down on the contribution. Cornwall Council want to see a builder making 20 per cent."

He added: "You wouldn't make a million pound scheme just to make £100,000 [profit]."

Mr Langan asked if that was "pure profit" and was told by Mr Snowdon and Councillor Chris Smith that it was "usual for the industry," although Mr Smith added that the 20 per cent would include costs and profit for the builder.

Mr Mitchell also said he felt the calculations for the CIL should be based on the value of a property once sold so "if the developers make more, they give more."

But Mr Smith said developers would not build if they had that level of uncertainty, and Mr Snowdon added that Cornwall Council officers were very rigorous in checking developers cost calculations.

However, Mr Mitchell said it was "the bane of us" getting developers building on slopes and then not paying anything towards infrastructure.

Mr Langan responded "you get houses," but Mr Mitchell pointed out these were often not affordable houses, and by writing off development costs the council was "subsidising" house builders.

Mr Langan said developers needed to make a profit, and Mr Mitchell asked if the council was prioritising "developers or the needs of the people."

Mr Smith said the council had to work with the land available that developers wanted to build on, adding: "It's undesirable but it's what happens in a free country not a planned economy."

It was also pointed out that the majority of the sites in Penryn are earmarked for strategic development, which meant they would not be affected by CIL. Councillor David Garwood noted a proposed student village at Treluswell - technically in St Gluvias Parish and not Penryn - would not pay anything to the town which would get "all the crud."

Mr Garwood also questioned why hotels were all exempt from the CIL, with no distinction between small local businesses and large chains.

And Mr Mitchell asked why calculations for supermarket contributions included a 20 per cent developer profit - again driving down council income - when there is no reason for such businesses to make a profit on building their own premises.

In response to a question from the Packet, Cornwall Council confirmed that the CIL allows 20 pure profit for developers, after all costs and outgoings.

A spokesperson said that is "pretty much standard for the CIL processes in an industry with not inconsiderable risks."

And Edwina Hannaford, portfolio holder for planning, added: "And this is set by government not us."