The Coalition Government in the Localism Bill which was introduced to Parliament on the 13th December 2010 decided to keep the much debated Community Infrastructure Levy (CIL) with some modifications.
What is CIL?
CIL is a new local levy that local authorities can chose to introduce to help fund infrastructure in their area. CIL was introduced by the previous Labour Government and the CIL Regulations came into force on 6th April 2010. There was much speculation as to whether or not the Coalition Government would retain the concept but the Localism Bill has now confirmed this.
How does the Bill change how CIL will operate?
The Bill introduced three principal modifications these being:-
- Clarification that CIL can be spent on the ongoing costs of infrastructure as well as the initial costs of infrastructure;
- Allowing CIL to be passed to neighbourhoods where the development has taken place;
- Local authorities have been given greater control over the setting of their charges. Independent examiners will still consider whether the charges in the charging schedule are reasonable but it will be up to the local authority to decide how to make it reasonable.
How will CIL affect developments?
Whilst CIL became effective from April 2010 it is by no means certain that all local authorities will decide to use CIL and could instead carry on with the current system of planning obligations. Even if local authorities do decide in principle to implement CIL, it may be sometime off.
What is the Charging Schedule?
- A local authority has to set out its proposed CIL rates in a charging schedule. The charging schedule will sit alongside the local development framework but it will not form part of the statutory development plan nor will it require inclusion within a local development scheme.
- CIL rates will be charged per square metre of net additional increase of floorspace. A new build or enlargement of less than 100 square metres (except where the development is one or more dwellings) is not within the CIL.
- To attract CIL there needs to be a charging schedule in place in the local authority’s area when planning permission is granted. A charging schedule needs to be subject to consultation and an independent examination.
- If a planning permission is granted and the development is commenced before 6 April 2013, then no CIL will be attached to that development.
What happens to Section 106 Agreements?
The CIL Regulations still expect planning obligations to be necessary, directly related to the development for which permission has been granted and fair and reasonable .
However once a CIL charging schedule is effective (or from 6 April 2014, if earlier) then a Section 106 Agreement cannot include any infrastructure which is to be wholly or partly funded by CIL. Therefore Section 106 Agreements for things which cant be funded by CIL such as affordable housing.
Summary
CIL is here to stay and so too are its complexities. Guidance on how CIL will operate in practice still falls short of the mark and it is hoped that this deficit will be plugged by the Government soon.
If you wish to discuss the contents of this article further, please contact Kate Butterfield on 0113 227 0340 or
e-mail kate.butterfield@gordonsllp.com.
Kate has specialised in planning and highways law for over 15 years and is recognised as a leader in her field. She has considerable experience in drafting and negotiating complex Section 106 Agreements and Infrastructure Agreements. In recent years Kate has secured planning permissions and consents for numerous large scale commercial and infrastructure projects nationwide including Bridgewater Place in Leeds.