Community Infrastructure Levy 2011

The Community Infrastructure Levy Regulations 2010

The Community Infrastructure Levy came into force on 6 April 2010. It allows local authorities in England and Wales to raise funds from developers undertaking new building projects in their area. The money is intended to be used to fund infrastructure that may be required as a result of development such as new transport schemes, flood defences, schools, hospitals, health and social care facilities, parks and leisure centres.

The Community Infrastructure Levy will be charged and collected by the district and metropolitan district councils, London borough councils, unitary authorities and national park authorities. The new regulations rule out the application of the levy for the provision of affordable housing as the Government considers that existing planning obligations remain the best way of delivering affordable housing.

The Government believes that the new tariff-based approach "provides the best framework to fund new infrastructure to unlock land for growth. The Community Infrastructure Levy is fairer, faster and more certain and transparent than the system of planning obligations which causes delay as a result of lengthy negotiations." Levy rates will be set in consultation with local communities and developers and will provide developers with much more certainty ‘up front’ about how much money they will be expected to contribute.

Under the previous system of planning obligations, it is thought that only six per cent of all planning permissions brought any contribution to the cost of supporting infrastructure. There is a consensus that even small developments can create a need for new services. It is believed that the new levy will create a "fairer system", with "a degree of legal certainty."

Why should development pay for infrastructure?

Almost all development has some impact on the need for infrastructure, services and amenities - or benefits from it - so it is only fair that such development pays a share of the cost. It is also right that those who benefit financially when planning permission is obtained should share some of the gain with the community to help fund the infrastructure that is needed to make development acceptable and sustainable.

How much will the levy raise?

The introduction of the levy has the potential to raise an estimated additional £700 million pounds a year of funding for local infrastructure by 2016 (the Impact Assessment on the Community Infrastructure Levy published on 10 February 2010 sets out further details).

The levy will be charged on a pounds per square metre basis, on the net additional increase in floor area of any given development to encourage re development of brownfield sites. The levy will be charged on any new building or extension with a gross internal floor area over 100sqm or involves the creation of a new dwelling even if the size is less than 100sqm.  Any existing buildings on the site that are demolished will be deducted from the final levy liability.

The levy becomes due from the date the development is commenced. The liability for payment rests with the landowner. All Social Housing development is exempt form the levy.  Click For more on the Community Infrastructure Levy 2010

How will the charges based?

CIL charges should be based on simple formulae, which relate the amount of the charge to the size and character of the development paying it. The proceeds of the levy should be spent on local and sub-regional infrastructure to support the development of the area.

The Planning Act requires charging authorities to produce a draft-charging schedule setting out the CIL charges in their area. This will be tested in a similar way to documents in the development plan to ensure a thorough detailed examination during the consultative process.

In order to adopt a charging schedule a District Council is required to have an adopted core strategy and understand what specific infrastructure is required in the area. They are therefore required to prepare an infrastructure plan, which then forms the basis on the levy.

The Government’s policy in respect of planning obligations (as set out in Circular 05/2005) has been well established for some time.

From 6 April 2010 the Community Infrastructure Regulations give the policy tests legal force. Regulation 122 provides that “a planning obligation may only constitute a reason for granting planning permission if the obligation is:

  1. Necessary to make to the development acceptable in planning terms
  2. Directly related to the development
  3. Fairly and reasonably related to the scale and kind to the development

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