CIL Changes to Planning

November 5, 2014

Community Infrastructure Levy
 

CIL is a levy that local authorities can choose to charge on new developments in their area. The money should be used to support development by funding infrastructure that the council, local community and neighbourhoods want.

 

It was introduced in 2010, with a view to simplifying the rather protracted site by site (section 106) negotiations with a simple mandatory charge on all schemes. CIL is charged on net new development, calculated on a pounds-per-metre-squared basis (on the Gross Internal Area), set by local authorities and can be charged at different rates for different types of development.  

 

Following the implementation of CIL, a council can still raise additional s106 funds for infrastructure, provided this infrastructure can be directly linked to the site-specific needs associated with the scheme in question, and that it is not for infrastructure specifically identified to be funded by CIL.
 

Payments requested under the s106 regime (and s278 regime) must be (as set out in CIL Regulation 122):
 

a.  necessary to make the development acceptable in planning terms;
b.  directly related to the development; and
c.  fairly and reasonably related in scale and kind to the development.
 

From April 2015, there will be restrictions on pooling contributions from five or more sites where the obligation is a reason for granting planning permission.  It is important to note that the counting of the ‘five or more sites’ relates to the ‘provision of that project, or type of infrastructure’ and is from the date of the CIL Regulations, being April 2010. A council will need to consider whether the threshold has already been exceeded for some items of infrastructure.
 

The trigger for paying CIL is not the grant of planning consent, it is the start of development. Regardless of the progress of development on the ground the payments are due under a council’s instalment policy – over which there can be no flexibility. A local authority (at its discretion and subject to strict rules) can accept CIL ‘in kind’.  The CIL setting process has been somewhat protracted with councils moving slowly - just 55 councils have adopted CIL (17 in London).

In the North West on the whole councils are only charging CIL on residential and larger retail uses.  In the region residential rates vary from £85/m2 in parts of West Lancashire down to zero – although typical rates are in the £35/m2 to £65/m2 range. SLDC are in a second round consultation on a rate of £50/m2 (residential) and £150/sqm (rural retail) across most of the District. Lancaster City Council is not pursuing CIL for now, but expects to do so later this year or earlier next year.
 

CIL can be a very significant cost to a developer, even a modest rate of £50/m2 could result in a payment of £5,000 for a family house of 100m2 (1,075sqft) – very much more on larger houses. There are a number of exemptions, such as for affordable housing, and for self-builders. However once introduced, CIL is mandatory and not subject to negotiation.  It should be considered as a tax and will need to be budgeted for.  The limits for appealing CIL are very limited and subject to strict time limits – even where a mistake has been made by the planning authority. It is important that applicants check the council’s GIA information is correct at the time of the planning application, and then recheck promptly on the grant of planning consent.

Simon Drummond-Hay
Simon is a director of HDH Planning and Development Ltd.  HDH assists planning authorities in setting CIL and a wide range of other matters. The firm acts for developers across England and Wales promoting strategic development sites.

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