July 2, 2012

How will the introduction of the Community Infrastructure Levy impact on local development plans? Karen Cooksley explains all

The Community Infrastructure Levy (CIL) was introduced by the 2008 Planning Act and came into force via regulations issued in 2010 and 2011.  It is an optional tariff based system of collecting money to pay for all or part of the cost of providing infrastructure to support development.  Local authorities determine what infrastructure is required and can use the money to provide, improve or operate facilities.

WHY IS CIL BEING INTRODUCED?
For many years there have been criticisms of the system of obtaining contributions for infrastructure provision, or requiring facilities and services to be delivered by developers, by way of planning obligations under section 106 of the Planning Act.  That system has been seen to be inconsistent, not just between different local planning authorities but also from site to site.  It has often been very slow and there has been a perceived, if not always real, imbalance in the relative negotiating skills of developers and local authority officers.  Third parties often complain that the negotiation of section 106 planning agreements is not transparent and that the process lacks accountability.

CIL was intended as a faster, fairer and more transparent process because it is non-negotiable and the calculation will be made in accordance with a standard tariff.  However, CIL is not mandatory.  Authorities may choose to continue using the section 106 mechanism to secure contributions, works and services relating to the infrastructure required to mitigate the adverse effects of development or support new schemes.  In addition, site specific requirements and affordable housing will still be dealt with by way of a s106 deed – and affordable housing is often the most controversial element in any s106 negotiation.

WHAT DEVELOPMENT WILL BE LIABLE FOR CIL?
Where a local authority has decided to implement a CIL and has gone through the formal process of preparing and adopting the charging schedule for its area, the CIL will be payable in relation to qualifying development which receives planning permission after the date on which that charging schedule was adopted.  Planning permission includes consent granted locally or on appeal, permitted development and development which is granted consent by Parliament or the major planning unit.  It currently includes variations of planning permission pursuant to s73 of the planning act, although the government has listened to strenuous representations and intends to legislate later in the year so that CIL applies only to any increase in floorspace sought by the s73 application not the development as a whole.

Qualifying development for CIL comprises ‘buildings into which people normally go’, which are new buildings comprising at least 100m2 of gross internal floorspace, or where one or more dwellings is created.