Major Projects and Community Benefits Agreements (CBAs)—Handle with Care

1. Major Projects and Community Benefits Agreements (CBAs)—Handle with Care Professor John Glasson*, Oxford Brookes University Planning Research Conference, Oxford----September 2014 *Personal views only

2. Structure of presentation • Context: major projects and new procedures—such as CBAs • Key issues: justification, nature, scale, and control • Practice: international variations • Recent UK experience of CBAs: projects, nature, scale, distribution and management • Next steps: handle with care

3. 1 Context: major projects and new procedures — such as CBAs • Major projects —natureof; types in UK; PINS /NI scale projects • Invariably controversial projects/LULUs (eg nuclear power stations; large windfarms; fracking; nuclear waste management; major transport projects (eg Crossrail; airports); major utilities (eg Thames Tideway) etc • With wide ranging impacts—bio-physical and socio-economic.

8. Leading to whole family of new procedures, processes and methods of assessment and managementPINS/NI procedures for major projects; PPAs to help local authorities participate more effectively; widening assessment family- EIA/SEA/SA/HIA/HRA/EqIA/WLAs IncludingCBAs (Community Benefits Agreements) Such agreements provide a range of benefits offered not to compensate for projected impacts, but in recognition of the community’s participation in an activity that is perceived as being ‘in the national interest’. And…for some large project there are always likely to be some indirect disturbance effects and changes in lifestyle which are less easy to address directly.They are becoming an increasing element in the assessment and development of major projects , especially energy projects, in the UK and internationally.

9. 2 Key CBA issues: justification, nature, scale, and control Justification for them at all --where philanthropy meets community or a bribe/buying consent? Compared with many other forms of development (eg new housing or retail facilities), the benefits of major energy projects tend to be less concentrated in the local area and may be contributing to national objectives (eg on security of supply, CO2 reductions/climate change policy). Also impact on local amenity/community cohesion—hard to compensate/mitigate directly. Good justification for CBAs in some cases —should not be seen as a bribe by developer or as buying planning permission.

10. What is their broad nature — and how are they different from designed in measures, and mitigation and enhancement measures already associated with a project? Danger of some confusion here. Planning decisions must be based on planning issues and material considerations; these exclude community benefits (ie: planning decisions cannot be bought). CBAs are also additional to S106 obligations.What constitutes a fair and reasonable scale of community benefits in relation to particular projects?What type of benefits are possible?How are benefits distributed --to whom and when?Who controls CBAs; how are they managed in practice?

11. 3 Practice: international variations However key differences of interpretation –- especially in US –which can muddy the water. Can be valuable in shifting traditional antagonistic relationship between developer and public towards a more deliberative relationship: Source: Gross et al (2003), Baxamusa (2008)

12. Have spread across US in last 10 years or so ---from initial pioneering LA examples (eg Lakers stadium/LA, LAX). But concern that CBAs are : substituting for measures which should be normal mitigation measures for major projects ( of $500m community benefits for LAX expansion, $230 m was for soundproofing local schools and homes) being used for wide range of projects – not all appropriate distorting planning system (‘CBA is a private agreement between a community coalition and the developer on multiple issues that may or may not be included in the regular planning process’ ) ( Baxamusa, 2008)

13. In France , the Grandes Chantiers programme has operated for several decades in support of major infrastructure developments, such as the EDF nuclear programme. Alleged level of CBA funding for local communities varies from 1% -10% of project value, for a wide range of projects—especially affordable housing.

14. 4. Recent UK experience of CBAs: projects, nature, scale, distribution and management • For which types and scales of projects? What is the (increasing) scale of project involved? Energy examples--from early SZB example to Scottish wind farms to new nuclear power to radioactive waste disposal and fracking. Other project types? • What is the (increasing) scale of funding involved? MW payments (eg £5000 per MW pa index linked for wind farms), lump sums etc. Very substantial for major nuclear related projects (HPC is 3.2 GW).

15. What is their specific nature -- what type of benefits are supported? -financial incentives: annual payment or lump sum or both-social benefit measures in kind (whole range including: transport improvements over and above those needed for development to proceed, affordable housing, training/apprenticeship schemes, village halls, sports facilities, improved telecoms etc) -community empowerment measures (eg: local participation in decision making/ongoing monitoring, local capacity building)-equity shareholding (eg: in a renewable energy project; gift shares into the ownership of a local community organisation)Some constraints may be imposed on type of benefits, eg:-gains for community as a whole -linked to sustainable energy

16. How are they managed in practice?--new vs existing organisations (Community Trust Funds or via existing local councils)--advantages of arms-length body --role of LA Developer Contributions Officer (should be separate from LA planning) How are benefits distributed/ on what criteria? --proximity, often with two tiers—local and regional (eg Dumfries and Galloway—50% to local community within15 km radius of outer boundary of windfarm; 50% to regional socio- economic fund—for affordable housing, community transport etc)-- population density; degree of received nuisance criteria?When are benefits distributed? -- staging of payments—sometimes related to project milestones.

17. UK RadWaste GDF example Community Investment ‘The UK government will provide significant additional investment to the community that hosts a GDF, to help to maximize the significant economic benefits that are inherent in hosting a nationally significant infrastructure project. These might include improved local education and skills investment, improved transport infrastructure, and improved recreational facilities… ..investment is additional to the investment and jobs that a major infrastructure project of this kind will bring to an area… ..it is also additional to any agreements between the developer and communities to mitigate impacts during construction (for example, under Section 106 of the TCPA 1990). ‘ Involves two stages – initial involvement payment (up to £2.5m, followed by main payment (significant) if GDF goes ahead in locality).

18. UK –new ‘rules’ to boost the exploitation of shale gas (fracking)-local councils to be allowed to keep all business rates paid by developers; and -energy firms could also make direct payments to local residents, and set up trust funds to be managed by local communities-energy industry also announced further ‘community benefits’ of £100,000 when a test well is drilled, and 1% of share of revenues if gas is found.-planning process context?

19. 5. Next steps: important but handle with care Important for delivery of some major national projects -- likely here to stay; likely to be more CBAs and bigger CBAs; involving more project types (for example---?) Learn from good practice (especially onshore wind farms); see guidance out there. Yet need to handle with care, especially re: • relationship with normal EIA mitigation and enhancement • relationship with planning system and Section 106 • rising local expectations (but less relevant to some projects) • importance of good management of CBAs

21. Thanks for your attention Questions please