Community Infrastructure Levy

Since April 2010, local authorities have been able to charge a 'Community Infrastructure Levy' on any new development with an internal floorspace of over 100 square metres. The regulations that allow them to do this are The Community Infrastructure Levy Regulations 2010. The Community Infrastructure Levy (CIL), once collected on development, can then be used to provide or improve infrastructure, and to then operate or maintain this infrastructure.

How will CIL work?

From April 2014 local planning authorities will not be able to use section 106 agreements to fund infrastructure that is needed because of new development. So that they are able to start charging CIL by this date, and therefore fund any necessary infrastructure, local planning authorities must therefore prepare a 'charging schedule'. This document, which like Development Plan Documents will be subject to an independent examination, will set out what the charge will be per dwelling for residential development, or per square metre for all other development. When applicants then apply for planning permission, they will know how much they will be expected to contribute to infrastructure in the area where that development will take place.

Are there any exemptions?

If a charity owns all or part of the land where the development will take place, and the development will be used wholly or mainly for charitable purposes, then CIL will not be owed. Likewise, CIL will not be charged on affordable housing development. Local planning authorities also have the power to exempt a development from CIL in exceptional circumstances.

What will CIL money be spent on?

Local planning authorities can use CIL money to provide or improve infrastructure, and to pay for the operation and maintenance of this infrastructure.

CIL money collected can also not be used to fund affordable housing. Affordable housing paid for by cross-subsidy on mainly market housing developments will still continue to be provided through section 106 agreements. The Government has consulted on whether CIL money should be allowed to be spent on affordable housing, but the outcome of this consultation has not yet been published.

The Localism Act 2011 made it possible for regulations to state that local planning authorities should share a proportion of CIL money with local communities. The detail of these regulations has not yet been decided, but if they are implemented the local planning authority would have to share a proportion of the CIL money with Parish and Town Councils, where they exist, or ringfence a proportion of the money for projects identifed by the community.

From April 2013 15% of the Community Infrastructure Levy revenue collected by the Local
Authority will now be passed directly to those Parish and Town Councils where development has taken place. In areas where CIL is collected, the amount of CIL passed on is capped at £100 per existing council tax dwelling per year.

What is the difference between CIL and a section 106 agreement?

Section 106 agreements are put in place to make it possible to approve a planning proposal that might not otherwise be acceptable in planning terms. For example, a section 106 agreement might require a developer to fund improving the access road to a site, to ensure that access will be safe once the development is completed. Or to ensure that the need for affordable housing is met, and that communities are mixed and diverse, section 106 agreements can require a developer to include a certain proportion of affordable housing on an otherwise market housing development. They are specific to the site that is proposed for development.

CIL is a general levy on all development, designed to raise funds for infrastructure needed generally as a result of an increase in development in an area.

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