Partner Article

Community Infrastructure Levy

With Watson Burton LLP Law Firm

The Planning Act 2008 provides for a new Community Infrastructure Levy (“CIL”) to be put in place in England and Wales. The new Levy will be a charge set by local planning authorities on most types of new development (whether residential or commercial) and is designed to help fund infrastructure to support the development of the local area. The imposition of CIL should reduce the level of payments which would otherwise be charged under s106 agreements. The Government’s detailed proposals for the introduction of CIL, including draft regulations, are currently under consultation until 23 October 2009. However, its implementation has now been delayed until 6 April 2010.

It should be noted that the charging authorities (district and unitary authorities, London Boroughs, National Park Authorities, the Broads Authority and the Mayor of London) will be empowered but not required to charge on most types of new development in their area.

The government’s proposed definition of “infrastructure” for CIL purposes has been drafted widely to enable charging authorities to decide what infrastructure is appropriate in their area. The Regional Spatial Strategy (“RSS”) is likely to identify infrastructure requirements which will be filtered into local development plans.

The charging authority must produce an up to date development plan and charging schedule for CIL to be charged. The charges will be expressed as a cost per unit of development and indexed to an index of inflation. The charging authority must consider the factors such as uplifts in value and development viability. CIL is expected to raise approximately £100 million per year in extra funding for the infrastructure that local communities require and will offer a new and predictable source of income for local authorities.

The amount of CIL due will be calculated with reference to the charging schedule when planning permission is granted. Planning permission will determine the number of chargeable units and the charging schedule will determine the rate per unit but payment is unlikely to be due until 28 days after the commencement of the permitted development.

Enforcement measures are being developed to ensure that CIL due is paid. Failure to pay CIL could be a criminal offence and councils could cancel planning permission for non-payment. CIL liability will also have the potential to be registered as a Local Land Charge to ensure purchasers of developed land and property are aware of the existence of an outstanding liability.

Implementation of the CIL has been delayed but in the meantime, the consultation process continues and it remains to be seen how many local authorities will choose to implement CIL in the future and the impact it will have on future developments.

If you have any comments or questions about this article or any other property related matters please contact Victoria Ferguson by email at victoria.ferguson@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .