Community Infrastructure Levy
The Current Position
Community Infrastructure Levy (CIL) is a new planning charge introduced by the Planning Act 2008. CIL is a method of securing contribution payments from developers to mitigate the impact of development.
As value of land with development permission rises, the Government has considered it justifiable to request contributions to financially lessen the effect of the development on the local community.
Contribution payments in themselves are not something new for developers. Section 106 of the Town and County Planning Act 1990 allows for customised agreements to be entered into between the developer and the Local Planning Authority (“Section 106 Agreements”). Although many Local Authorities do operate developer contributions on a calculated basis, there has been criticism about a lack of transparency and consistency between developments, and that major developments bear the costs disproportionately.
CIL is intended standardise developer contributions with published tariffs.
It will require most new developments to make a financial contribution towards the provision of communal infrastructure and as such it will be a significant new factor for developers to consider. In effect, this will result in more planning applications attracting contribution payments.
CIL will only be exempt in the following circumstances:
1. Minordevelopmentslessthan100m2ofgrossinternalfloorspace (unless it involves the creation of one dwelling);
2. A charity where the development is to be used for charitable purposes;
3. Thosepartsofadevelopmentintendedtobeusedforsocialhousing;
4. Exceptionalcircumstancesrelief,whichwillonlybepossiblewherethe Local Planning Authority has made it available in its area.
The liability to pay CIL on a development will not arise until the Local Planning Authority has implemented a charging schedule, which requires consultation before it can come into effect. Some Local Planning Authorities will choose not to implement CIL and will continue to use Section 106 Agreements, but it is thought that most will eventually use CIL as a new revenue stream.
Mid Devon District Council, which is thought to be one of the first, is intending to publicise its charging schedule for consultation in the Autumn. It is likely that some Local Planning Authorities in Devon will implement CIL as early as Spring 2012.
Whilst the charging schedules are yet to be published and therefore the level of CIL payable for projects remains uncertain, in all likelihood, payments will rise. The idea behind CIL is to raise additional revenue to support infrastructure (albeit in a more streamlined manner across all scales of development). Those wishing to avoid CIL should consider submitting a Planning Application without delay.
June 2011
Nadine Seymour is a Solicitor in the Development Land and Planning Team at Stones Solicitors LLP. More information is available by logging on at www.stones-solicitors.co.uk.