Community infrastructure levy CIL

Revision as of 16:35, 17 September 2013

Introduction

Section 206 of the Planning Act 2008 gives ‘charging authorities’ (generally the local planning authority) the power to charge the community infrastructure levy (CIL). It is a charge that local authorities can choose to impose on new developments to fund local infrastructure. This could include infrastructure such as:

• Transport schemes.
• Flood defences.
• Schools.
• Hospitals.
• Green spaces.
• Leisure centres.

Charging authorities must:

• prepare and publish a document known as the “charging schedule” which will set out the rates of Community Infrastructure Levy which will apply in the authority’s area.
• apply the levy revenue it receives to funding the provision, improvement, replacement, operation or maintenance of infrastructure to support the development of its area, and;
• report to the local community on the amount of levy revenue collected, spent and retained each year.

ref Department for Communities and Local Government (CLG): Community Infrastructure Levy guidance 14 December 2012.

The levy is charged by square metre of floor space of a development. It can be charged on any new dwelling or any other development that has 100 square metres or more gross internal floor space. The floor space of existing buildings that are going to be demolished can be deducted, as can the development of the interior of existing buildings. Charities and social housing schemes may be exempt from the levy.

Once planning permission is granted, collecting authorities will issue applicants with a levy liability notice which becomes due when development commences.

Relationship between the levy and planning obligations.

Planning obligations (also known as Section 106 Agreements) are obligations attached to land that is the subject of a planning permission. Planning obligations are used to mitigate or compensate for the negative impacts of a development or to prescribe the nature of a development. They are intended to make acceptable developments which would otherwise be unacceptable.

In 2010 measures within the Community Infrastructure Levy Regulations came into force clarifying the relationship between planning obligations and the community infrastructure levy and restricting the use of planning obligations.

Planning obligations must meet three new statutory tests from 6 April 2 010:

1. They must be necessary to make the development acceptable.
2. They must be directly related to the development.
3. They must be in scale to the development.

In December 2012, CLG published Community Infrastructure Levy guidance. Paragraphs 84 – 91 set out in detail the relationship between the levy and planning obligations. They suggest that when the levy is introduced, charging authorities should scale back Section 106 requirements ‘to those matters that are directly related to a specific site, and are not set out in a regulation 123 list'. A regulation 123 list sets out those projects or types of infrastructure that a charging authority intends to fund through they levy.

The guidance is intended to ensure that there is transparency about what the charging authority intends to fund through the levy and where Section 106 contributions may continue to be sought. This should ensure that there is no ‘double dipping’, where developers are asked to pay twice for infrastructure. Once an authority has introduced the levy in its local area, it must not use obligations to pay for infrastructure they intend to fund via the levy.

Planning obligations will no longer be the basis for a tariff. Once an authority introduces the levy in their area, it can no longer pool more than five contributions for infrastructure capable of being funded by the levy.

NB The Community Infrastructure Levy (Amendment) Regulations 2013 have now been amended several times, and further changes and clarifications are expected - particularly in relation to planning obligations.

Planning conditions

The National Planning Policy Framework states that when local authorities are deciding whether to impose planning conditions, they should consider the combined effect that those conditions and the levy will have on the proposed development.

Neighbourhood funding element

In January 2013, planning minister Nick Boles announced that where there is a neighbourhood plan in place that has been accepted in a referendum, communities (such as town or parish councils) will be given 25% of the levy when planning permission for a development is approved. This money will be available to spend on infrastructure from an approved list, including improvements such as ‘..to re-roof a village hall, refurbish a municipal pool or take over a community pub’.

Where there is no neighbourhood plan in place, communities will receive 15% of the levy, although this is capped at £100 per household per year

The funding will be passed to the community group in accordance with a timetable agreed with the local planning authority. The community group will be expected to work with the local planning authority in deciding how it should be spent. Where there is no town or parish council, the local planning authority will retain the funds and spend them ‘…in accordance with the wishes of the community’.

Government officials have suggested that awards to local communities could be between £236,500 and £652,500 depending on the location and nature of the development, although it is not clear how these figures have been calculated.

The proposals were announced alongside a warning that Britain needs to build 270,000 homes a year. This is double the number that was built each year between 2000 and 2010.

The government aims to have the neighbourhood funding element of the levy in place by Spring 2013.

NB The neighbourhood funding element does not apply in Wales. Instead, the charging authority passes 15% of the levy funds to community councils.

Find out more

Related articles on Designing Buildings Wiki

• Community right to bid.
• Community right to build.
• Detailed planning permission.
• Localism act.
• National Planning Policy Framework.
• Neighbourhood development order.
• Neighbourhood planning.
• Outline planning permission.
• Planning permission.
• Planning appeal.
• Planning fees.
• Planning conditions.
• Planning obligations.

External links

• Planning portal: About the Community Infrastructure Levy.
• Planning portal: Community Infrastructure Levy Summary.
• Planning portal: Community Infrastructure Levy Overview.
• Planning portal: Guidance on conditions and obligations.
• Community infrastructure levy regulations in full.
• Draft proposal for a mayoral community infrastructure levy for London.
• Department for Communities and Local Government (CLG): Community Infrastructure Levy guidance 14 December 2012.
• CLG: Communities to receive cash boost for choosing development. January 2013.
• The Planning Act 2008
• The Community Infrastructure Levy (Amendment) Regulations 2013.
• The Community Infrastructure Levy Regulations (2010)