2. Simplicity vs Complexity
Simplicity
• Single rate (?)
• Requires minimal evidence
• Need to set near the lowest
value use / area (an
opportunity cost?)
Complexity
– Differential rate (probably)
optimises income for
infrastructure
– “Progressive”: the most
profitable developments pay
more
– Too complex may be off-putting
and awkward to
operate
– Too complex likely to require
greater justification through
evidence
3. Estimating your
infrastructure
funding gap
Estimating
CIL income
Testing
viability
Working hypothesis
Draft rates
Adopt rates
Who is involved?
Officers
Officers,
Members (&
Partners)
Officers,
Members (&
Partners)
Iterative Charge Setting
4. Differential Rate 1
income (£/time)
Use / Area A Use / Area B Use / Area C
CIL
Viability
levels
Differential Rate 2
income (£/time)
Single Rate
income (£/time)
Differential Rate Setting
5. CLG’s key messages
• CIL is pro-growth – it should have a positive economic effect on
development across your area
• Whilst your CIL rate needs to be informed by viability evidence, the
evidence does not have to dictate your rate
• No policy-driven zero/low rates. Base your rates on economic viability
evidence.
• A charging schedule must stand on its own. A charging authority cannot
rely on exceptional circumstances relief or any policy. The Guidance
accepts that some individual developments may be unviable because of
CIL.
• Ensure no double charging – be clear with developers what is
6. What the Examiner must check
The independent examiner must check that:
1. Is the charging schedule supported by background documents
containing appropriate available infrastructure planning and
economic viability evidence?
2. Are the charging rates informed by and consistent with the
evidence?
3. Does the evidence demonstrate that the proposed charge rates
would not put the overall development of the area at risk?
7. The proportional impact of CIL on
development viability
36
31
26
21
16
11
6
1
£10/ sq m variance in
CIL rate
10% variance in build
costs
10% variance in sales
values