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The Community-Infrastructure-Levy - round table meeting


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The Community-Infrastructure-Levy - round table meeting

  1. 1. The Community Infrastructure Levy Round Table Meeting Judith Damerell and Leo Stevens 20 November 2013
  2. 2. Overview Community Infrastructure Levy • Basics • Its role as a funding stream for infrastructure
  3. 3. CIL – political & intended purpose • The purpose of the Community Infrastructure Levy (“CIL”) is to support infrastructure delivery. • It is intended that the CIL will establish “a better way to increase investment in vital infrastructure” (and note that the CIL Final Impact Assessment, CLG, February 2010 revealed that only 6% of planning permissions involved S106 contributions). Previous and (in places) ongoing mechanism – S106 Town and Country Planning Act 1990 Agreements. Latest of many attempts to deal with the difficulties the development industry encounters (seemingly) with the negotiation by and approach of local planning authorities (LPAs) to planning agreements. Baroness Andrews stated during the Planning Bill’s passage through the Lords that “the CIL is a generalised charge ... Unlike planning obligations under Section 106, CIL loosens the relationship between an individual development and the size of its contribution to fund infrastructure, because it is an averaged cost distributed evenly across a number of developments. The amount of CIL to be paid in a specific case would not be calculated on the basis of the specific need for infrastructure.”
  4. 4. CIL - The basics • The Planning Act 2008 (ss 205–225) introduced CIL. • The CIL Regulations 2010 (2010/948) took effect in April 2010. • Subsequent CIL (Amendment) Regulations in 2011 (2011/987), 2012 (2012/2975) and 2013 (2013/982). • CIL Reforms Consultation April 2013 – outcome announced. • The Mayor of London’s CIL applies to developments granted planning permission from April 2012.
  5. 5. CIL – the basics (continued) • Every charging authority (in essence, the LPA or the London Mayor) must prepare a charging schedule. CIL is only payable if planning permission for a scheme is given after the relevant authority has implemented the CIL regime by adopting its charging schedule. If the planning permission is not implemented, no CIL will be payable. Redbridge Council’s estimation is that one fifth of the permissions it gives are not implemented.
  6. 6. CIL - the basics (continued) • Liability arises on construction of new building or extension of an existing one. Is a “tax” on net increase in floor space of new developments – but floor space in existing buildings may be caught if they have not been used for some time. • Imposition of CIL is not limited to circumstances where a S106 obligation would otherwise be required. • Non – negotiable (so development industry now realising it has a role in collaborating in and scrutinizing the CIL setting process). • If an outline permission permits development to be implemented in phases, every phase will be treated as a separate chargeable development.
  7. 7. Charging Schedules • 21 authorities now have charging schedules in force • Jury is out on benefits, in terms of the regime being fairer, clearer and more predictable. • Many authorities have adopted charging schedules, but a wide variety of approaches is emerging – flat rates (Redbridge Council) versus a range (Poole Council), for example. Some authorities have different rates depending on the use (e.g. residential or commercial - Southampton Council). • Front runners have shown the need for vigilance. Examiner at Newark and Sherwood Council CIL examination rejected differential rates for “large” and “small” retail units without a very clear viability justification about such rates (otherwise one retail type is favoured over another).
  8. 8. Charging schedules and the “appropriate balance” • CIL allows development gain to be captured and applied locally • However, the appropriate balance creates a difficulty – CIL set too high may create viability and/or landbanking issues. A CIL set too low will not assist in bringing schemes forward as they will be constrained by the lack of funding for essential local infrastructure
  9. 9. Flexibility of CIL operation for infrastructure funding • raised within one area but paid to bodies outside of it • restrictions on projects identified in charging schedules? • pooled contributions • administratively self-financing
  10. 10. CIL - Areas of concern • Overlap with S106 Agreements – legal issues re Regulation 122 and the Town and Country Planning Act 1990 section 70 • Interested parties – eg: Arts Council April 2012 - The Community Infrastructure Levy: advice note for culture, arts and planning professionals “This note explains how the needs for cultural and arts infrastructure in association with new development can be established and fed into the Community Infrastructure Levy process.”
  11. 11. CIL - Areas of concern (cont.) • Describing infrastructure as direct site infrastructure to enhance development scheme – promote it through S106 Agreement to avoid Regulation 122 difficulties? • S106 Agreements therefore survive – authorities creating clear policy justification for site specific mitigation and nonCIL contributions (eg: for employment and training)
  12. 12. Areas of concern (cont.) • Grampian conditions imposed which do not match authority’s infrastructure delivery programme timetable. • Where is the comfort that the infrastructure will actually be delivered?
  13. 13. CIL - Mayor of London • Mayor of London CIL in effect for London planning permissions issued on or after 1 April 2012 • It is intended to raise £300 million towards the delivery of Crossrail • Charges are based on the size and type of the new development and individual London Councils fall within particular charging zone bands • Viability – Inspector concluded that marginal schemes may be at risk but London’s CIL only a “very small part” of overall cost of development
  14. 14. Thank you