Re: BCIS All-in tender price index - Public forum - Planning Advisory Service (PAS)

To the best of my knowledge the information is not provided for free. You need to obtain it from a member of the RICS or the RICS direct - I think the government anticipated that most local authorities would either employ surveyors directly or on contract. I will be interested if this is causing difficulties or if most authorities have access to the information.

It is a commonly used index in S106 agreements and cannot normally be obtained for free due to licence controls. Our authority decided to subscribe for a licence (about £1300/annum) for S106 purposes a couple of years ago, after issues when our then outsourced design group wished to charge for indexation advice, each time it was needed. Presumably under the CIL regime the subscription would be an allowable cost within the 5% admin fees.

Thank you Gilian and Alison I can confirm that neither of my councils have access to the index at the present time. I take Alison's point that the cost of the licence subscription may be an allowable cost but it will still be an additional admin cost for my councils, and more to the point, money that would be better spent on providing community infrastructure. This will of course accumulate over time - £1300pa for both councils over 10 years adds up to £26K, which is a sum not to be sneezed at! Surely SODC & VWHDC are not alone so may I encourage other councils to respond if we are not so that Gilian is made aware.

It's my understanding that the CIL regs allow charging authorities to claim back 5% of the levy for CIL set-up costs (e.g. viability work and examination). Couldn’t you do the same for the costs of the BCIS Index?

Has anyone got around this problem yet? Can anybody that subscribes to the index confirm that the subscription agreement includes an undertaking not to pass on the information to non-subscribers? As soon as we use the index figure in a CIL calculation the index figure will be out there because, if asked, we will have to show liable parties the calculation by which we arrived at the demanded figure and that calculation will include the index figures.

I quote.... The information supplied by BCIS is issued only to and for the use of the subscriber and members of the subscribers company at the subscription address.... Only one person can use each subscription at a time ..... Forwarding information obtained from the service to other addresses is not permitted unless the office receiving the information has a subscription to the service which entitles them to receive that information. I think this should be interpreted as meaning you should not download and forward whole index series - not that you cant advise someone the current index figure.

BCIS online terms and conditions can be found here http://www.bcis.co.uk/site/scripts/terms.aspx

BCIS will normally provide a helpful clarification of allowed usage in any situation if asked.

I have been in contact with BCIS and it has been confirmed that the only legitimate way to obtain the index figures is to pay the (curently) £970 + VAT subscription. I was also informed that this figure is likely to rise each year. I have now raised with BCIS the question of the non disclosure provision in the subscription terms given that the index figures will have to be revealed to liable parties as part of the CIL calculation. Also, as it is the Governments intention that land owners/developers should be able to calculate their potential CIL liability for themselves, it would be desirable for the index figures to be published on LPA web sites. I will post details of the BCIS response when I get it.

I have now had a couple of e-mail exchanges with BCIS. They are adamant that they will not consider marketing a reduced price product that would only provide the index figure for November each year. Despite me asking the question twice, Bcis have, so far, not given me any response on the matter of the 'passing on' of the index figure for any purposes relating to the administration of CIL. As the BCIS subscription Ts & Cs currently stand, we could not; A. pass the index figures to our software provider for embedding in the programme as they are not themselves a licence holder. B. publish the index figures on our web site to enable persons to calculate their liability. C. include the index figures in the CIL calculations that we will give liable parties (assuming that they are not licence holders themselves). This is a crazy situation which, presumably, the DCLG did not anticipate when the CIL Regs were being drawn up. Is there any interest in LPA's getting together to make a joint representation to DCLG on teh issue?

Hi Tony I am sure I can speak on behalf of my authority and say we would be happy to support a joint represenation to DCLG. Regards, Simon

Tony, I would suggest that any representation made to CLG suggests moving to the Retail Price Index. This is identified as the alternative to the BCIS All-in Tender Price Index within the CIL Regulations (2010) and is freely available to developers and the wider community, removing any issues with disclosing the indexation rates. I am confident Shropshire Council would support any representation to this effect.

You might regret adopting RPI. I would expect it to be lower than the BCIS index over the long term but the latter to vary more dramatically with the development cycle. And there are statistical flaws in the BCIS index. Some of the QS companies have their own measure which is freely available. For instance Gardiner & Theobald.

I think the crux of the issue here is the question over whether or not DCLG will accept the use of an 'equivalent' (and I'm not suggesting RPI/CPI is) index which doesn't cost a bomb and can be shared with a third party. One would have thought that BCIS sharing an annual 1-off index figure wouldn't interfere with their pay-for service which presumably relies on demand for more fine-grained (quarterly/weekly figures)?

As this has developed into quite an issue, I suggest that one way of resolving it is to explain the problem to Joe Martin, head honcho at BCIS, and see what he can do to make the information available to all at terms that most people find reasonable. I shall do so shortly and advise in due course.

We have now purchased the subscription and have access to the index online. The index figures are given for each quarter rather than for each month and therefore I contacted BCIS and spoke to a technician to ask how to get the required index figure for 1/11/2012. He expresed the view that the intention of the CIL Regs was that the figure should be the one that was published at the time (1/11/12) for the 4th quarter 2012 and guided me through the process of resetting the parameters to get that figure. The result was an index figure that is five points below the one that I know other authorities are using. Can some other subscribers say how they are using the index to obtain the 1/11 figure? Obviously we should all be using the same figure and so we need to take a uniform approach to teh use of the index.

Hi Tony Presumably this still doesn't resolve the issue of sharing the figure (once obtained) with a third party?

Hi Simon, No, I'm still no further forward with that question. I havve now spoken to three people at BCIS at increasing levels of seniority and have not been able to get a defintive statement of the position that BCIS would take if Charging Authorities published the index figure on their web sites or passed it to a liable party as part of the calculation of the chargeable amount.

I said on 15 March I would raise this with Joe Martin, BCIS Executive Director and received a reply from him the same day saying he would look through the comments on the forum in detail and consider how best to respond. I've also sent him a reminder today alerting him to Tony's comments earlier today. Whilst writing I would comment that I don't agree with the (alledgedly BCIS) view expressed by Tony on 28 April for the following reasons: Under CIL Regulation 40(7), there is no express requirement that BCIS indices be established from the index as published at 1 November for the years in question. Instead, there is a reference to the index 'published from time to time'. I suggest this implies that both 'Ip' and 'Ic' should be established from the index as published at the same point in time, and not from the index as published at different points in time. I have used BCIS indices for many years to update building tender prices from a historical point in time to a current or future point in time. In doing so, I cannot recollect a single case where I have ever had cause to ascertain the historical indici from the index as published at the historical point in time, and as far as I am aware I have always established all indices (i.e. historical, and current or future) from the index as most recently published. As I understand it, to establish indices from the index as published at two different points in time, would not be a correct use of BCIS indices. I appreciate that if I'm correct it will mean that indices will differ between authorities and also between individual cases in any one authority, depending in both instances on the most recently published index at the time a chargeable amount is calculated.

I don't really know much about the Regulations (or their interpretation/intentions) but wouldn't it be easier (for the sake of consistency across/between CAs) to use a single annual index figure for each year? If so, wouldn't it make sense to base the annual index figure on the last available figure in the year preceding the one in operation? That way it would be easier for people to calculate...perhaps PAS could even supply the index figure for the year in question for reference?

Doubtless it would, and something pretty close to this could be achieved if Regulation 40(7) was amended to add the words "as last published on or before 1st January of the given year", although I'd still maintain that, strictly speaking, this wouldn't be a correct use of indices because they would be derived from two different publications. However, until and unless an amendment clarifying the issue is made, were stuck with interpretation.

Regulation 40(7) does go on to say..."and the figure for a given year is the figure for 1st November of the preceding year"...or am missing something...or has this perhaps been amended by later (2011/12 Regs)?

The words I suggest could be added after the wording you quote in order to confirm the index publication dates to be used. I maintain it woudn't be a correct use of indices, but it probably could be done. I'm not advocating that it should be done though because as I see it it is not comparing like with like and would amount to the legalised misuse of data purely to make life easier for CAs. In respect of publication dates, currently Reg 40(7) just says 'published from time to time' . I could look at the index as currently published today and find the indices for 1 November (4th Quarter) 2011 and 2012, and I suggest that's exactly what I should be doing if I was calculating a chargeable amount where a charging schedule took effect in 2012 (Ic 4thQ 2011) and planning was granted in March 2013 (lp 4thQ 2012). It must be remembered that BCIS indices for the quarters at or around the current quarter are always forecast initially, so can (and probably will) change over the next 6 months or so as more cost data is gathered and they become firm. If I was to look at the index again in a few months, say as published at June 2013 relative to a project that had just obtained planning that month, although the 4thQ 2011 figure is unlikely to have changed, the 4Q 2012 figure probably will have changed. I don't think this has been amended by later Regs.

I can't understand why the Regs give a very specific date of 1 November when the index figures are only expressed as quarter to quarter. The view that I obtained from Lindsay Pullen at BCIS (he is a Technical Consultant) is logical to the extent that it gives a fixed figure for 4Q 2012. The current figure for 4Q 2012 is still only a forecast on a sample of 17 (I understand that the figure will be finalised when a sample size of 20 has been achieved) and has changed a number of times as the sample size has grown. It can't be right that the index figure for a given calendar year that PLAs have to use for the calculation of the chargeable amount can change throughout the year until it becomes finalised. It needs to be fixed/known/certain at the start of the year. If the finalised figure ends up lower that the forecast fgure used in a chargeable amount calculation does that mean that a revised demand notice must be issued? If the CIL has actually been paid does it mean that the difference must be refunded? The fact that we having this debate shows how unclear the Regulations are. It would be nice if we could get a response/opinion from DCLG on this.

Why can't idices change throughout a year? That's what they do. Sorry but I don't see that they've got to be fixed at the start of a year. As I've said previously, in updating tender costs I've always used the latest published indices and can't see why the same logic can't be applied to caculating CIL. Reg 65(1) requires the CA to issues a liability notice as soon as practical after a planning approval is given, so as I see it the CA use the latest published BCIS indices at the time they calculate CIL prior to issuing the liability notice. There is no provision under Reg 65 for a revised liability notice to be issued if the indices do change later, although they may if they wish to under Reg 65(5) (I would suggest that they don't). And if a revised liability notice has to be issued under Reg 65(4), the CA use the latest published indices at the time they recalculate the CIL.

Graham, It's my clear understanding (gained with the benefit of talking to someone who worked at DCLG on the drafting of the Regs) that the intention was that there should be a single index figure for each calendar year that should be used in all calculations made during that year. It can't be right for different index figures to be used for calculations made at different times in the same year depending on the state of the BCIS forecast. In my view the wording of Reg40(7) supports my view by the use of 'the figure' which implies that it is a single figure rather than a number of figures.

Tony, That may be the intention, but that's not what we've got otherwise there would be something along the lines of the additional words I suggested yesterday could be added to Reg 40(7). Your reference to 'the figure' in Reg 40(7) works equally well if applied to the latest publication of indices at the time the chargeable amount is calculated, as there will only ever be one figure for each 4thQ in question in any one publication of the index. I would also add that some people are writing software packages and web applications to calculate CIL based on the Regulations as they are written, not on the basis of how we might want them to be written.

Graham Stow has kindly brought this discussion to my attention. BCIS All-in Tender Price Index (BCIS TPI) and the Community Infrastructure Levy. The BCIS TPI was proposed as the appropriate index for adjusting CIL charges by DCLG as it reflects the market price (cost to client) of construction work and therefore, the cost included in the levy charge. The BCIS TPI is produced as an independent index by the Building Cost Information Service of the RICS, which is funded solely by subscriptions to its services. The index is widely used in the industry; the majority of local authorities have subscriptions to BCIS services that include the index, as do many consultants and developers. From our records it would appear that all the Local Authorities identifiable in this debate subscribe to a BCIS service containing the TPI. The index should not be re-published on subscribers’ public websites. However, we would expect the index to be included in the published calculation of the chargeable amounts on a development and in any supporting reports. Therefore RICS/BCIS will allow authorities to utilise the Tender Price Index in accordance with the Community Infrastructure Levy Regulations 2010 to calculate the necessary chargeable amounts and to include these calculations in supporting published reports and documentation. However RICS/BCIS expressly prohibits the publication of the Tender Price Index or any part thereof, on any internet or public facing website. We would also expect that all the parties would wish to check the indices used from the original source. On the issue of the application of the indices, it is our view that the indices used should be the latest available on the day the CIL is calculated on a particular development, and these should not subsequently be revised.

Jo, I hope that you are looking at this forum for responses to your post. Please could you say whether the view expressed in your final paragraph was informed by discussions held with the DCLG while the CIL Regs were being drafted or whether it is just an internal view of BCIS? In relation to your penultimate paragraph, whilst it is reasonable to assume that the major developers may already have a subscription to the index or be willing to purchese one, it is, in my view, unreasonable to expect small developers or indeed private individuals to purchase one just for the purposes of CIL.

Since I posted on 9th January above, BCIS have launched their revamped website and it appears to me that their terms and conditions are now only available to subscribers. I have therefore printed them to PDF and attach them here.

Tony My opinion on the application of the indices is certainly informed by the discussions we had with DCLG about the use of indices when the regulations were being drafted, but as expressed here it is only my opinion and I cannot give it anymore credence than that. With regard to the availability of the index to small developers, private individuals and their advisors. While I would expect that all the parties would wish to check the indices used from the original source in practice not everyone will, (even if it were the RPI) and the decision whether to do so or not clearly rests with the individual parties.

Reference throughout this debate has been to the BCIS All-in tender price index. My information is that there are 2 separate BCIS ALL-in tender price indices; one for "all new construction #940" and one for "all construction #944" My question is whether early adopters of CIL are using the 940 index or 944 index? Do we have a choice? What is the benefit of one over the other? Moira

I was checking the Index only this morning. As far as I am aware, there is only one version of the All-In TPI and I have never seen reference to #940 and #944. There are plenty of other problems with the use of the Index without there being two versions of it!

Actually, each BCIS index (there are many of them) has a number and the All-in Tender Price Index is #101 (see attached screengrab). Whatever indexes #940 and #944 are, I would suggest they are the wrong index.

Can anyone clarify which index code we should be using for calculating CIL; #101, #940 or #944?

My understanding now is that #101 is the correct index.

The trouble is that the relevant figure (in our case 4Q 2012) keeps changing, even after it is no longer stated as being a forecast, as the results from further samples are received. 

I sent  a long e-mail to DCLG explaining all the administrative difficulties relating to the use of theh index and received an acknowledgement but nothing further yet. I suspect that the problem is proving to be too difficult to resolve without further amendments to the CIL regs. It would be nice however if DCLG could at least acknowledge that there is a problem. 

Tony,

Have you made any further progress resolving administrative issues around the indexation?

Robert

Robert,

No, I've not had a response from DCLG and have just sent a reminder to Darren Wilding.

I've just sent another chase e-mail to DCLG have still not received a reply.

Now that we are in the second year of our adoption of CIL the indexation is a real issue for us. I have no option but to use the latest BCIS forecast figure for 4Q 2013. That figure is however a pure forecast with no actual sample results at all.

What have other LPAs that have adopted CIL done and what will they do as the figure for 4Q 2013 changes throught the year as the forecast and then the actual sample size changes?  

I've received a reply from DCLG saying that they are "currently considering what advice we can offer within the scope of the existing regulations" and "we intend to publish revised CIL guidance around the end of January which I hope will assist".

Watch this space!

 

I read this discussion with interest. We have in the past been able to obtain BCIS figures from various colleagues within different areas of the Council to enable the calculation of S106 contributions. However, there is now only 1 team that uses BCIS and they may be ceasing the subscription in the very near future which will cause us issues in trying to calculate S106 contributions and even more so as we progress towards implementing a CIL Charging Schedule. On the basis that the cost over 10 years for us to subscribe would be around £13k (as mentioned by Brian  Crooks and Alison  Stringfellow in an earlier post), even when taken from the 5% admin costs, this is a big sum that adds to already high set up costs and a relatively low return due to viability levels etc. In my view, the government should allow an alternative index to be used in these instances.

Although the cost (and the fact that the index figures can't be made public) is annoying, it is all the other issues surrounding the use of the All-in Tender Price Index that cause all the big problems.

The TPI is clearly not fit for purpose in the context of the current CIL Regulations. I would love to see a move to the use of the R.P.I or any other freely available and non-volitile index. The move would hoever require a formal amendment to the CIL Regs. and so it's not a short term possibility.  

Any information councils hold about the BCIS All-in tender price index (including the actual index figures) will be subject to the Freedom of Information Act 2000 or the Environmental Information Regulations 2004.  BCIS cannot override either the Act or the Regulations through its terms and conditions, nor does BCIS have a veto when a council comes to determine a request for such information.

I can't see how the BCIS could reasonably object to LPAs publishing on their web sites or otherwise making public the multiplication factor that is the result of dividing one TPI figure by another i.e. Ip/Ic. For example, if the result is 1.05 it would not be possible to work out what the two TPI figures were that gave it.  

I agree.  In the business, we often used to use figures of that sort in the contracts. I used the data in the RICS library. Anybody can. If the other party wanted to subscribe to BCIS to check the figures, that was up to them.

Michael Beaman 

 

Am I correct in thinking that the implications of the regulations will mean that all Charging Schedules adopted in 2013 should use the same index figure, based on what was published on the 1 st November 2012 for q4 2014?

If this is the case should all planning permissons from the 1st January use the index figure published on 1st November 2013 for q4 2013?

 

 

Sam/All, I had hoped that the recent changes in Governmental guidance would include some clarification/help with this problem. I am not aware of any detailed guidance that has been given to LPAs. The new consolidated CIL guidance at para 2:3:3A does not help at all and seems to be at variance with what (the revised) Reg 40 actually says about indexation.

Sam, I am sure that the intention was that a single indexation figure should apply for each calendar year and that the same figure should be used by all LPAs.  The new guidance seems to be suggesting that that is not happening and that that is OK. As you are probably aware, we can't even discuss amongst ourselves, on an open forum such as this, what figures we are all using as that would be contary to the BCIS T&Cs that we have signed up to.  We are all still in a very unsatisfactory situation with this.