19.11.15
Whitehall to review council use of community infrastructure levy
The former CEO of the British Property Federation, Liz Peace, will chair an independent panel commissioned by Whitehall to review if the community infrastructure levy (CIL) is meeting its intended objectives.
The panel will assess whether the levy, an optional extra tax councils can charge on top of the main Section 106 development tax, is actually providing faster, fairer and more transparent means of funding local infrastructure through developer contributions.
It will also look at the relationship between CIL and s106 agreements, largely used to secure affordable housing by delineating what lands can be used for, and how much developers should pay local authorities to offset impacts on infrastructure and public services.
Peace’s team will be responsible for considering how reliefs and exemptions work, and whether the neighbourhood element of CIL helps increase community support for development.
The DCLG is also keen to hear directly from councils and community groups on the levy process and what changes can be made to improve how it funds local infrastructure and supports local housing objectives.
The consultation, opened today (19 November), is accepting electronic submissions until 15 January.
Communities secretary Greg Clark said: “Our planning reforms have ended the top-down bureaucracy of the past that pitted neighbours against developers.
“We now want to go even further, so we can ensure communities can directly see the benefit of new development and can be confident that new homes come with the infrastructure to support them.”
Introduced in April 2010, the levy is intended to provide a more certain and transparent means of collecting developer contributions to infrastructure rather than individually negotiating s106 planning obligations.
This can be done via tariff-style contributions on large developments within a local planning authority’s area, with proceeds typically spent on roads and schools near the site on which homes are built.
Detrimental CIL pooled structure
While claiming that CIL plays a vital role in contributing to local infrastructure, just last week, housing minister Brandon Lewis – speaking to MPs on the Communities and Local Government Committee – defended a policy in the Housing Bill to scrap the levy requirement for developers creating large starter home schemes.
But Helen Hayes, Labour MP for Dulwich and West Norwood, suggested that exempting some development from the CIL could affect the provision of schools, GP practices and good open space.
However Lewis said local authorities, as part of their local plans, would be considering what new infrastructure should be created through new developments when assessing any planning application.
He also criticised how some councils were pooling the money from developments and using it to cover other spending – ultimately leaving the developer to fund infrastructure, adding to housebuilding costs and making some sites financially unviable.
“If you have a number of smaller sites, pooling CIL together to use it for whatever the local authority wants to use it for is quite important, but it is also one of the downsides of the [levy].
“For example, in London, I have looked at a very large site where the developer has the challenge that, because the local authority wants to charge CIL and use that anywhere in the authority, that does not necessarily pay for the road infrastructure for the large development. They have to do that separately.
“That makes the viability issue really challenging, and it is probably partly why that particular large development is not going forward at the moment,” he said.
(Top image c. Rui Vieira)