Community Infrastructure Levy

The Community Infrastructure Levy (the levy) is a planning charge on new development. The ability for a local planning authority to charge the levy came into effect from April 2010, but cannot be set until an adopted Core Strategy is first in place.

The Core Strategy (adopted August 2011) policy CS20 now provides the context, stating that detailed guidance on development contributions would be set out in Supplementary Planning Document(s) including any standard charges introduced through the levy.

Government regulations and guidance set out the process to be followed in preparing a charging schedule including requirements for consultation and an Independent Examination. The charging schedule needs to be based on viability and infrastructure planning evidence.

Stages in Setting the Levy

The rate(s) (at pounds per square metre) set in a charging schedule must be based on appropriate and available evidence and must aim to strike a balance between the desirability of funding (in whole or in part) the estimated total cost of infrastructure required to support the development of the area, taking into account other actual and expected sources of funding; and, the overall potential effects of the levy on the economic viability of development across the area.

The Preliminary Draft Charging Schedule is the first stage in setting levy rates and must be sent to various consultation bodies who are invited to make representations. The bodies include adjoining local planning authorities and the County Council. All local residents, business operators, voluntary bodies and bodies representing those who carry on business in the area are also invited to make representation on the proposed charges.

Preliminary Draft Charging Schedule

The Preliminary Draft Charging Schedule was published for public consultation from 19th March 2012 to 30th April 2012. This document is available below:

• Preliminary Draft Charging Schedule consultation document (205KB)

There are several supporting documents in addition to the Core Strategy which inform the Preliminary Draft Charging Schedule:

• The Draft Infrastructure Development Plan (IDP) (309KB)  identifies the type, location and estimated cost of the infrastructure required to support new development in the Borough as set out in the adopted Core Strategy. The IDP is a 'living' document and will be updated regularly to include the most up to date information.
• The CIL Viability Assessment (2.72MB) , executive summary (238KB)   and Development Appraisals (115KB)  look at the viability of different development uses across the Borough and assess the likely impact of setting levy charges on these developments.

 

What happens next?

Preparation Timetable

The timetable for preparing the charging schedule and adopting the levy is as follows:

• March – April 2012 – Public consultation on Preliminary Draft Charging Schedule;
• April – May 2012 – Consider comments, prepare Draft Charging Schedule;
• June 2012 – Executive approval of Draft Charging Schedule;
• June – July 2012 – Public consultation on Draft Schedule;
• September 2012 – Submit Draft Schedule and representations to Independent Examiner;
• November 2012 – Independent Examination; and
• December 2012 – Council adopts Levy.

 

Frequently Asked Questions

Q1. What is the Community Infrastructure Levy (CIL)?

CIL is a new levy (tax) that local authorities in England and Wales can choose to charge on new buildings and extensions to buildings in their area. The money collected will be used to help fund the infrastructure needed to support new development. Infrastructure could include things such as local community facilities, schools and transport improvements. The rates at which CIL will be charged will be set out in a "Charging Schedule" that will be adopted and published by the local authority. Fareham has published its draft preliminary charging schedule for consultation.
 

Q2. Why has the Government given local authorities the ability to charge CIL?

• CIL will provide additional funding for local authorities for them to use on a wide range of infrastructure projects that support development and growth and benefit the local community.
• CIL will give local authorities the flexibility and freedom to set their own priorities for which infrastructure projects should be funded and it will provide predictable future funding.
• Because the CIL rates are published in advance, developers and land owners will have a clearer view of what developments are expected to contribute. That should encourage greater confidence and higher levels of investment.
• CIL will help show local people how new development is contributing to their community.
 

Q3. Will all local authorities charge CIL and will the level of CIL be the same all over the country?

No. The law allows the levy to be charged by local authorities in England and Wales – but they do not have to do so. Authorities that wish to charge a levy have to produce and adopt a CIL charging schedule which sets out the rates of CIL (expressed on a per square metre of floor space basis) that will apply to different forms of development in their area. Due to the differences in infrastructure needs and differences in the economics of development in different areas, CIL rates will vary across the country.
 

Q4. Will CIL rates be the same across all of an authority's area?

No, not necessarily. Different rates for the same types of development may be set for different parts of an authority's area if there are differences in the viability of those types of development in different areas.

Q5. How does CIL relate to planning permission?

CIL will be charged on new buildings or extensions to buildings that have been permitted through some form of planning permission. That includes not just planning permissions granted by a local planning authority but also permissions granted through:
• Permitted development rights: rights granted by Parliament to carry out certain forms of development without needing to obtain planning permission from the local authority.
• Local development order: an order made by a local authority which in effect grants a blanket planning permission for certain types of development in a defined area.

Q6. Will CIL rates be the same for all forms of development?

No not necessarily. As CIL rates are linked to the economic viability of development, different forms of development may attract different rates. So, for example, the rates for new houses, new shops or new industrial buildings may all be different. In addition, the CIL rate for some types of development in certain areas may be set at zero because the economics of the proposed development would not support any CIL payment.
 

Q7. Will there be any form of independent scrutiny of the CIL rates that a local authority wishes to set?

Yes, as well as consulting the public and other interested bodies, local authorities have to submit their draft CIL Charging Schedules for examination by an independent examiner.

Q8. How long will CIL rates apply for once a Charging Schedule has been adopted?

There is no fixed period. Local Authorities will review their charging schedules from time to time to ensure that they remain appropriate over time. For instance, as market conditions change, the viability of certain types of development may also change.

Q9. What will CIL be used for?

CIL monies will help pay for the infrastructure that is required to support new development e.g. new roads, schools and recreational facilities. Local Authorities must spend the income from CIL on infrastructure that supports the development of the area but they have the freedom to decide what infrastructure to spend it on. The infrastructure on which it is finally spent can be different to that for which it was originally set. Local authorities will publish on their Web sites details of what they will use CIL for (called the "Regulation123 list"). The Regulation123 list will be updated from time to time.

Q10. How will the CIL charges be calculated?

The adopted CIL rates will be charged for each square metre of net additional floor space provided in new buildings or extensions to buildings that people normally go into. All new housing will be charged, but other forms of development will only be charged if they have a floor area of more than 100 square metres. In cases where existing buildings are redeveloped, the floor area of the existing buildings will be discounted from the calculation.

Q11. Will CIL payments be index linked to protect their real value?

Yes, CIL payments will be indexed in line with the "All-in Tender Price Index of Construction costs" produced by the Building Cost Information Service which is a measure of building costs inflation.
 

Q12. Can a reduction in CIL liability be negotiated?

No. Once a local authority has adopted a Charging Schedule and brought it into effect, there is a legal obligation to pay the CIL at the adopted rate(s). A local authority can however, in exceptional circumstances, grant relief from the liability to pay CIL where a specific development proposal cannot support payment. There are however a number of strict statutory conditions that must be met before relief can be granted.

Q13. Are any types of development exempt from paying CIL?

Yes.
• Development that will be used for charitable purposes is statutorily exempt from paying CIL.
• A local authority may choose to give discretionary relief to a charity in circumstances where the greater part of a chargeable development will be held as a charitable investment and the income will be used for charitable purposes.
• Social housing e.g. most social rented housing provided by a local housing authority or a registered social landlord is exempt from any CIL liability.
 

Q14. When does CIL have to be paid?

The trigger for the payment is the start of the development.
 

Q15. Can CIL be paid in instalments?

Yes, if the local authority has adopted a written instalment policy.
 

Q16. Can CIL be paid in kind?

Yes. CIL can, by written agreement entered into before development starts, be paid in kind, for example by transferring land (which may include existing buildings) to the local authority. The monetary value of any payment in kind must be determined by an independent valuer.

Q17. Who is liable to pay CIL?

The liability to pay CIL generally rests with the owner of the land on which the development takes place. When land is sold, the liability to pay the CIL transfers to the new owner. The law however does allow for another person or company to assume liability for the payment of CIL.
 

Q18. How will the payment of CIL be enforced?

It is expected that, in the vast majority of cases, the person/company liable for payment will pay without problem or delay. In cases where payment is not made or made late, regulations give local authorities a range of enforcement measures such as surcharges on late payment. In more serious cases the local authority has the power to issue a CIL Stop Notice. The issuing of a CIL Stop Notice would prevent the carrying out of any further development until payment is made. As a last resort the courts can authorise the seizure of assets or commit the liable person to a short prison sentence.
 

Q19. Will the imposition of CIL make some forms of development unviable?

Possibly. In setting its CIL rates a local authority has to strike a balance between securing additional income for infrastructure provision to support development and the potential economic effect of imposing CIL on development across their area. Although CIL will only represent a very small percentage (less that 5%) of total development costs, it is possible that it will make some proposals which were already only marginally viable, unviable.

Q20. Will CIL monies be used to fund the provision of infrastructure in the part of a local authority's area in which it was collected?

No not entirely. A local authority can use CIL monies to help provide infrastructure to support development anywhere in its area. It can also be used to help provide infrastructure outside its area if the infrastructure will support development within its area.
 

Q21. How will people know what a local authority has spent CIL monies on?

There is a legal duty on local authorities to produce an annual report which sets out details of CIL income, expenditure and accumulated funds.

Q22. How much CIL would be payable on an average size house?

Assuming a residential CIL rate of £105 per square metre and that an "average" 3 bedroom house has a floor area of 110 square metres then the CIL payable would be:-
£105 x 110 = £11,550
This is a simple calculation which does not take into account the indexation which has to be applied to protect the real value of the payment. In times when building costs are rising, the effect of the indexation will be to increase the sum payable each year following the year in which the Charging Schedule took effect. If buildings costs should fall then the effect of the indexation will be to reduce the sum payable.

Q23. How can I find more detailed information about CIL?

The CIL Regulations and detailed guidance from the Dept. of Communities and Local Government and the Planning Advisory Service can be found here:

PAS - "An Introduction to the Community Infrastructure Levy" (this is an external hyperlink)

DCLG - "The Community Infrastructure Levy: A Summary" (51.5KB) (this is an external hyperlink)

DCLG - "The Community Infrastructure Levy: An Overview" (156KB)  (this is an external hyperlink)

DCLG - "Community Infrastructure Levy Guidance: Charge Setting and Charging Schedule Procedures" (230KB)  (this is an external hyperlink)

DCLG -"Community Infrastructure Levy - Collection and enforcement: Information Document" (230KB)  (this is an external hyperlink)

DCLG - "Community Infrastructure Levy Relief: Information Document" (279KB)  (this is an external hyperlink)

"The Community Infrastructure Levy Regulations 2010"  (this is an external hyperlink)

"The Community Infrastructure Levy (Amendment) Regulations 2011"  (this is an external hyperlink)

 For more information on the levy please contact Strategic Planning & Design on 01329 236100 planningpolicy@fareham.gov.uk