Community Infrastructure Levy (CIL) has arrived at last!
After 10 years or so of talk and not much action, the first few local authority CIL plans have been adopted and before long the payment of levies on commencement of development will become a familiar part of the planning process.
Local Planning Authorities can collect the levy, in £££'s per square metre, from all schemes of 100 square metres (net) and all new market dwellings (even if smaller than 100 square metres). The trigger for payment is commencement of development, although some councils may allow payment in instalments.
Changes of use, charity landowners and affordable housing are exempt. Levy receipts can be used for improvements to transport, flood defences, schools, hospitals, health facilities, parks and leisure centres. There is no longer a requirement to link the contribution to the development. So monies can be spent wherever the council sees fit. The first few CIL plans are as follows:
· The London Borough of Redbridge has set a blanket £70 per square metre levy applying to all types of development over 100 metres (net).
· Newark and Sherwood Council requires up to £125 per square metre for residential and retail development only.
· Shropshire County Council expects between £40 and £80 per square metre for residential development only.
· Mayor of London - £20 per square metre in the poorest Boroughs, £35 per square metre in the medium Boroughs and £50 per square metre in the richest Boroughs. Expected to raise £300 million towards cost of Crossrail.
These early examples show a range of different interpretations of the CIL regulations. Less well off Boroughs who wish to encourage development may only charge CIL for certain types of development (eg Newark and Sherwood), while wealthier Boroughs may decide to charge more on a blanket basis in order to discourage development (eg Redbridge).
Worryingly, Stewart Murray, the Chief Planner at Redbridge, interviewed in Planning Magazine (10 February 2012) calculates that CIL in his Borough will raise £2.5 to £5 million per year, compared to just £1.5 million from section 106 agreements.
No doubt a lot more local authority CIL plans will be adopted in the coming months. It will be interesting to see how different regimes treat the Levy, as an enabling device or as a tax on development to raise much needed funds for local government, which is being hard pressed by Government cutbacks.
The viability of many schemes is bound to be threatened, if council's do not adopt a flexible and reasonable approach.