UK: Community Infrastructure Levy – The Latest Consultation Paper

Last Updated: 14 August 2009
Article by Mark Heighton

On 30 July, the Government published its latest consultation paper relating to CIL entitled 'Detailed proposals and draft regulations for the introduction of the Community Infrastructure Levy'.

The paper is 161 pages long and, not surprisingly, contains the detailed proposals and regulations relating to CIL which is due to come into effect on 6 April 2010.

Key highlights of the proposals contained in the Consultation Paper include:

  • Although the Government sees CIL as an important source of funding for the provision of infrastructure, it still expects the main burden to be shouldered by core public funding.
  • Although CIL will potentially be able to come into effect from 6 April 2010, the Government is expecting a gradual introduction as each charging authority will be able to set its own rate in its own individual time frame. The imposition of CIL is not something which charging authorities are required to do. It is a power which they will have.
  • The charging authorities will basically be planning authorities and the Mayor of London.
  • The intention is that there will be no further expansion on the definition of 'infrastructure' which is contained in the existing legislation save that the Mayor of London's role will solely be in relation to transport infrastructure such as Crossrail. However, the paper makes it clear that definition is not meant to be exhaustive. For example, it mentions both police stations and district heating projects as possible examples of infrastructure.
  • The intention is that local authorities should work together to jointly fund sub regional infrastructure which is for the benefit of a group of authorities.
  • Although organisations like the HCA will not be charging authorities (they are not a planning authority) it is proposed that there may be an element of forward funding with HCA providing infrastructure and the costs subsequently being reimbursed by local authorities using CIL.
  • In relation to the setting of the level of CIL, each charging authority will be able to sets its own level. Each charging authority is to produce a draft charging schedule setting out the CIL charges in its own area. The proposal is that this schedule will not be legally part of the development plan but it will be tested in a similar way to development plans (for example, charging authority will have an obligation to consult).
  • Charging authorities will be able to set differential CIL rates in their areas either on a geographical basis or by reference to the intended use of the development (for example different rates for residential and commercial). However, the differences will need to be justified based upon the economic viability of development.
  • In terms of the calculation of CIL, it is proposed that should be charged on a pounds per sq m of gross internal floor space basis. The Government has decided not to proceed with alternative metrics such as on a per dwelling or per habitable room basis in the case of residential development. Also, the charge will be levied on the gross amount of the development permitted rather than the net amount. So for example, if a 50,000 sq m retail scheme is to be built but this involves the demolition of an existing 10,000 sq m scheme, the CIL would be based on 50,000 sq m and not the net additional sq footage of 40,000 sq m.
  • The charges set out in any charging schedule will be index linked on an annual basis to a national index of construction costs specified by the Government. The index will apply from the date the charging schedule takes effect to the year in which planning permission is granted (rather than the longer period of when CIL becomes payable).
  • CIL will be payable within a window (28 days suggested) of commencement of development (using the planning legislation definition). The amount of the CIL, will however, have been determined and notified at the time of the issue of the relevant planning consent (in this context the relevant planning consent will either be a full planning permission or a reserved matters approval).
  • The focus is on planning consents authorising the construction or changes to buildings or change of use. A planning consent which does not involve a building will not trigger CIL (for example, a wind turbine).
  • Although there is no specific proposal in the Consultation Paper, the Government invites views on whether there should be a reduced rate of CIL for affordable housing developments.
  • Similarly (although with great reluctance) views are invited on whether there should be a special procedure for developments that really are made unviable as a result of the advertised rate of CIL so as to exempt those developments or at least reduce the amount of CIL.
  • In terms of transitional arrangements the intention is that planning permissions which are granted prior to a CIL charging schedule coming into effect will not be liable for CIL.

These are just some of the highlights. There are many others. For a full copy of the paper please see the following link.

The consultation period runs from 30 July to 23 October.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was xx/xx/xxxx.

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