The Planning Reform Bill, published in November 2007, was introduced with the aim of speeding up the planning process and is mainly concerned with the development consent procedure for nationally significant infrastructure projects. It also introduced proposals for a new community infrastructure levy (CIL) which will be a tariff system intended to help raise money towards infrastructure in a similar way to the existing Section 106 regime.
What is the Community Infrastructure Levy?
The CIL is a standard charge levied on new developments to fund local infrastructure, for example roads, flood defences, medical facilities, open spaces and schools. It has been developed as an alternative to the Planning Gain Supplement which was regarded as unworkable. CIL is intended to provide developers with more certainty of the financial amounts that they will be expected to contribute.
Guidance has been offered by the Department of Local Government and Communities (DLGC) which looks at the proposals in more detail and how the CIL will operate in practice. The draft regulations, governing the collection of the levy, will be published in the Autumn.
The key features of the CIL proposals are:
- Using national guidelines, local charging authorities will set local charges based on a fixed sum per home or per sqm of commercial development. Different levies may be imposed in different parts of a town/district depending on local conditions.
- Charging authorities will need to identify the need for, and associated costs of, infrastructure in their area in a detailed development plan.
- In order to ensure payments are proportionate, the charge will be levied against all types of development except household development by homeowners.
- CIL will be payable when development is started and the amount determined when planning permission becomes fully effective. The levy may be paid by either the developer or the current land owner.
- Charging authorities are expected to take into account uplifts in land values, funding from other sources and development viability. The latter is particularly important given the growing emphasis on carbon-neutral and brownfield re-use developments.
- The scheme is not compulsory. However, the British Property Federation wants the CIL to be compulsory across all local authorities to ensure a level playing field for costs between developers nationally.
- The levy is expected to complement, rather than replace, the current Section 106 regime, particularly for those authorities who choose not to implement the levy. Once the CIL is fully effective, it is expected that the use of planning obligations under Section 106 will probably reduce to three main areas:
- Affordable housing
- Non-financial and technical operation matters
- Site specific impact (e.g. protection of an endangered species or archaeological site)
- CIL regulations will require the charging authorities to apply the levy to funding infrastructure, but there does not need to be a link between the scheme paying the CIL and the infrastructure funded by it.
- Sanctions for failing to pay the levy when it falls due have been proposed. The DCLG has suggested that payment is enforced by halting development or imposing a land charge on the property to be developed, only to be removed when the fee is paid. It has also been mooted that failure to pay could constitute a criminal offence.
- Charging authorities must account for funds collected and their expenditure.
The Government will formally consult on the draft regulations in the Autumn with a view to the regulations being finalised in Spring 2009.
This article was first published in Newsbrief, Summer 2008
For more information or advice on the community infrastructure levy, please contact either Mark Miller or Jennie Cuthill.
