Community Infrastructure Levy- Detailed proposals and draft
regulations for the introduction of the Community Infrastructure
Levy (July 2009).
Summary of the Community Infrastructure Levy Proposal
- A set of standard charges relating to proposed new development
in an area and contained in a charging schedule. Districts, Unitary
Authorities and London Boroughs are identified as 'charging
authorities'. LA's will be able to decide whether it uses CIL and
at what level.
- The charging schedule is intended to help deliver the proposals
in the Local Development Framework and should emerge from
systematic infrastructure planning in an area. Charging schedules
will be approved by charging authorities following an assessment of
infrastructure needs and an overall test of development viability
at area level.
- Charge to be set based on viability of a range of sites, with
emphasis on the inclusion of low value sites.
- CIL will be a tax on buildings; charges will be specified as £
per square metre of floor space for broad land use types. LA may
choose to vary charge within the local area, higher for green field
areas; lower for renewal areas?
- CIL may be spent on sub regional infrastructure provision.
- Charities will be exempt from the charge. No residential
development under 100m2 will be exempt.
- The charge is to be spent on infrastructure. Sport and
recreation are on the illustrative list of infrastructure given in
paragraph 216 of the Act. LA’s will be free to define what is
included as infrastructure. Infrastructure appears to be limited to
capital items.
- The scope of planning obligations (Section 106) are to be
limited to solely mitigate the impact of development.
Sport England View on the Consultation
Whilst we welcome and support one of the basic
aims of CIL, that of “making certain that the very things that
make quality of life good in a neighbourhood are provided,”
(Para 1.14) Sport England has serious concerns that the proposed
CIL system will not achieve this aim. Whilst the consultation
document provides clarity and certainty over the setting,
collection and enforcement of CIL, there is no such certainty over
how the infrastructure that is needed by communities will be
effectively delivered.
This uncertainty is exacerbated by breaking
the direct link between development providing for the increased
community infrastructure needs that it creates. Sport England
believes that without this direct link, the proposed CIL will not
be able to guarantee the provision of specific infrastructure to
meet newly generated sporting needs. As the proposal stands,
it will give no certainty in helping to deliver Sport England’s
objective of increasing the number of people taking part in
sport.
Listed below are Sport England’s main areas of
concern;
1. The CIL, as proposed, will not ensure
the delivery of specified sporting infrastructure.
2. The broad brush approach to infrastructure
planning outlined in the Consultation document conflicts with
guidance requiring a robust evidence base in PPS12, PPG 17 and the
current Sport England approach to facility planning.
3. A conservative approach to setting the
level of CIL is likely to reduce the amount spent on community
sports infrastructure locally.
4. Contributions currently paid by developers
towards the maintenance and revenue costs of sports facilities
under planning obligations will be lost.
5. The new tighter test proposed for planning
obligations could conflict with Sport England policy for the
protection of playing fields and other facilities, in particular to
ensure the provision of replacement facilities through Section106
agreements.
6. Without Sport England having consultation
status for draft charging schedules, Sport England’s role in
promoting the delivery of community sport will be significantly
reduced.
7. Community amateur sports clubs should be
exempt from CIL.
8. The Levy should be based on people
rather than development area (m2) as it is people who
generate the need for infrastructure, and not buildings.
Download Sport
England's response in full
The new Planning Act – (Approved November 2008)
The Planning Bill contains broad enabling powers to allow local
authorities, and other bodies approved by Government, to levy
charges to help pay for infrastructure associated with new
development. These powers are found in Part 11 of the Act
Click here to view the current text of the Act
The overall purpose of the CIL is to ensure that development
contributes fairly to the mitigation of the impact it creates. CIL
will be a standard charge, decided by designated ‘charging
authorities’ and levied by them on new development. The aim is to
set the level of CIL such that it does not deter new
development.
The basic provisions
An information paper consolidating the Government’s various
statements on CIL, The Community Infrastructure Levy, was published
by DCLG in August 2008. The paper states that:
‘…CIL will be a new charge which local authorities will be
empowered, but not required, to charge on most types of new
development. The charges will be based on simple formulae which
relate the size of the charge to the size and character of the
development paying it’.
The CIL will;
- cover new residential and commercial development, subject to a
low de minimus threshold;
- be based on a costed assessment of the infrastructure
requirements arising specifically out of the proposals in the
development plan for the area;
- cover refurbishment as well as new build infrastructure, and
may vary within local authority areas;
- include regional and sub regional infrastructure, as well as
local infrastructure;
- be tested through public participation as part of the
development plan preparation process;
- incorporate reserve powers for DCLG to limit the amounts
collected and to direct how the funds are allocated as between
strategic and local headings.
Definition of infrastructure
The Regulations are intended to define what is meant by
infrastructure, with the intention of including a wide definition
of infrastructure. Following discussions at the Committee stage,
the Government has included a preliminary definition in the Act.
This lists seven types of infrastructure, including:
- Sporting and recreational facilities; and
- Open spaces.
[Other categories include roads and transport, flood defences,
schools and education, medical facilities, and affordable
housing].
DCLG paper on the The Community Infrastructure Levy (August
2008)
The
August 2008 progress report, clarifies a number of points;
- CIL cannot be used to remedy existing infrastructure
deficiencies;
- Regional Development Agencies could provide forward funding for
infrastructure and then be re-imbursed from the local CIL income
stream;
- Districts, metropolitan and unitary authorities may be charging
authorities [This excludes Counties, and Regional Development
Agencies];
- Authorities will need an up-to-date development plan to support
the scheme;
- Authorities should develop a charging schedule to parallel the
development plan;
- The charging schedule is not formally part of the development
plan;
- However, the charging schedule should still be subject to
public consultation, public inquiry and binding report procedures
as with the remainder of the plan;
- Viability testing of charging schedules will be needed;
- The charging schedule should allocate the proposed amount to be
raised from CIL to each main class of development;
- The unit of development for charging purposes [e.g; per
dwelling, per bedroom, per square foot] remains the subject of
investigation;
- Consideration is being given to how far CIL charges may vary
within geographical areas, what forms of exception may be allowed
and what types of indices for inflation should be applied;
- CIL will be a local land charge.
Delay in Introduction and the process to adoption of CLG
Now that broad enabling powers have been approved within the
Planning Act; the intention was to formally consult on the detailed
regulations in 2009. The likely consultation for the draft
regulations is now late July 2009, with consultation concluding in
October/November, to enable the regulations to be made in April
2010. These regulations will determine the exact operation of the
CIL. As the scheme will run alongside a honed down section 106
system, there will also be a need for revised planning guidance on
planning obligations.
An announcment was made in the Budget papers in April 2009, that
introduction of the CIL is now scheduled for April 2010, having
been put back from the previously proposed date of October 2009.
However the Government suggest that, because of local
circumstances, for example the need for up-to-date development
plans, CIL take-up is likely only to occur ‘over an extended
period’.
Section 106 Agreements
Consideration is being given to restrictions on Section 106 use.
A transitional period would apply it this was done. The provision
of land for community facilities may remain within the scope of
section 106.
Advice to local authorities for the interim
Before the new system is introduced, the Government is
encouraging local authorities to continue the work of developing
standard charges, and ensuring there is a good evidence base for
both infrastructure needs and priorities.
[ The Community Infrastructure Levy, 5 August 2008, London,
DCLG. ISBN 978 1 4098 0313 3; Product Code 08 COMM 05443]
The CIL document can be found on www.communtiies.gov.uk/planning
act.
Community Infrastructure Levy Impact Assessment (November
2008)
The aim of the report is to give a reasonable view of the likely
cost, benefits and impacts of the leading options which will reform
the existing system of developer contributions. In reality this
focuses exclusively on the CIL, and gives October 2009 as a date
for introduction.
The report further advances the phasing out of the current
planning obligations, however it does state that affordable housing
will continue to be funded through these mechanism.
The report clarifies a number of points on the costs, benefits,
risks and potential revenues of the CIL
Costs
- It is expected that the incidence of CIL will fall on
landowners, because developers would negotiate a discounted land
value for land when they buy it, to offset their CIL
liability.
- Small developers will be asked to pay more towards
infrastructure than under planning obligations.
- Local authorities who choose to introduce a CIL will incur
initial set-up costs for consultation on the draft charging
schedule including a public examination (these will recur every
five years). Ongoing costs connecting to billing, collecting,
monitoring, reporting and enforcing CIL will then occur.
- The CIL is not expected to adversely affect competition, nor is
the growth and increased development perceived to have an adverse
effect on sustainable development.
Benefits
- CIL reduces risk for developers by providing them with up-front
certainty about their potential liability. Due to the absence of
available data however the benefits have not been quantified.
- Local Authorities will be able to forecast better the amount of
funding they expect from developer contributions. The CIL will be
able to provide them with a discretionary mechanism to help unlock
additional funding for infrastructure.
- Rural communities will equally benefit by the introduction of
the CIL as urban ones due to the discretionary nature of the tool
which enables it to reflect local needs and economic
circumstances.
Risks
- Setting a CIL at too low a level may lead to much needed
infrastructure projects being delayed or not going ahead.
- Setting a CIL at too high a level could risk some land not
coming forward for development, in particular brownfield sites that
require substantial remediation,
In order to overcome these risks the government will allow LA’s
to set different CIL rates and each charging schedules will need to
be subject to a public examination by an independent examiner.
Potential Revenues
- Assuming a take up range of CIL of between 36 and 52 per cent
of authorities, the range of payments to CIL by developers is
estimated as £470m -£680 million. This is assumed to unlock
additional growth of £150-£290 million per annum. The logic is that
if development bottlenecks are removed by new sewerage, road or
other schemes then projects that would otherwise have been delayed
will be brought forward.
The document can be found here.
Sport England's initial view on the CIL proposal can be
found here.