122Contents of development contributions policy

1. A development contributions policy must, in relation to the purposes for which development contributions may be required,—

2. summarise and explain the total cost of capital expenditure (identified in the water organisation’s water services strategy (see section 230) or under section 126) that the water organisation expects to incur to meet the additional or increased demand for water services infrastructure resulting from growth; and
3. state the proportion of that total cost of capital expenditure that will be funded by—
   1. development contributions; and
   2. other sources of funding; and
4. explain, by reference to the considerations set out in section 101(3) of the LGA 2002 (as if each reference in that section to a local authority were a reference to a water organisation), why the water organisation has determined to use the funding sources referred to in paragraph (b) to meet the expected total cost of capital expenditure referred to in paragraph (a); and
5. identify separately each group of water services activities for which a development contribution will be required and, in relation to each group of water services activities, specify the total amount of funding to be sought by development contributions; and
6. if development contributions will be required,—
   1. contain a schedule of assets in accordance with section 123; and
   2. contain a schedule of development contributions in accordance with section 124; and
   3. include, in summary form,—
      1. an explanation of, and justification for, the way each development contribution in the schedule of development contributions is calculated; and
      2. the significant assumptions underlying the calculation of the schedule of development contributions, including an estimate of the potential effects, if there is a significant level of uncertainty as to the scope and nature of the effects; and
      3. the conditions and criteria (if any) that will apply in relation to the remission, postponement, or refund of development contributions, or the return of land.

7. Subject to subsection (3), a development contribution provided for in a development contributions policy may be increased without consultation, formality, or a review of the development contributions policy.

8. A development contribution may be increased under subsection (2) only if—

9. the increase does not exceed the result of multiplying together—
   1. the rate of increase (if any), in the Producers Price Index since the development contribution was last set or increased; and
   2. the proportion of the total costs of capital expenditure to which the development contribution will be applied that does not relate to interest and other financing costs; and
10. before any increase takes effect, the water organisation makes publicly available information setting out—
    1. the amount of the newly adjusted development contribution; and
    2. how the increase complies with the requirements of paragraph (a).

11. To avoid doubt,—

12. a development contributions policy may also relate to contributions transferred to the water organisation under section 129; and
13. this section does not prevent a water organisation from calculating development contributions based on capital expenditure that a territorial authority has incurred; and
14. this section does not prevent a water organisation from calculating development contributions over the capacity life of assets or groups of assets for which development contributions are required, so long as—
    1. the assets that have a capacity life extending beyond the period covered by the water organisation’s water services strategy are identified in the organisation’s development contributions policy; and
    2. development contributions per unit of demand do not exceed the maximum amount allowed by section 126.