In July the Department of Communities and Local Government published a consultation on the draft Regulations governing the Community Infrastructure Levy (CIL).

The consultation is a comprehensive document. Headlines are:

Background

  • The CIL will be a new charge which local planning authorities (LPAs) may (but not must) charge on most types of development.
  • The charge will be based on formulae which relate the amount of the charge to the size and character of development proposed.
  • Proceeds are to be spent on local and sub-regional infrastructure.
  • It is proposed that those authorities which produce development plans should be charging authorities. That includes district and unitary authorities, the London boroughs, national park authorities and the Broads Authority. The Mayor of London will also have a power to charge CIL. Charging authorities can choose whether to implement CIL.
  • There must be an up-to-date development plan for an area before CIL can be charged. The development plan must be supported by an infrastructure planning process to identify what infrastructure will be needed to deliver the plan.

Charging schedule

  • The charging authority will prepare a draft charging schedule. This will be subjected to testing, including consultation and a public inquiry. The report following the inquiry will be binding on the charging authority. However, it could produce a fresh schedule if it was unhappy with the report and recommendations.
  • The schedule will allocate the proposed amount of CIL to each main class of development envisaged by the development plan.
  • Charges will be expressed as a cost per square metre of floor space and will be increased by reference to an index of inflation.

Calculating the CIL

  • The Government will set out at national level the descriptions of the unit of development and will set out exemptions and inflation indices. It will also introduce flexibility to allow for differential rates geographically. There may also be provision for exceptional circumstances where a developer cannot pay the rate in the charging schedule.
  • CIL will be levied on buildings, rather than development generally. For non-residential development, there will be a threshold below which no CIL will be payable. This is proposed to be 100 square metres.
  • Householder development by homeowners will not be liable for CIL.
  • There is likely to be an exemption for development by charities for charitable purposes. The Government is also considering a discount for affordable housing development.
  • The amount of the CIL will be calculated at the date of the planning permission. The permission will set out the number of chargeable units and the schedule will set out the rate per unit. The liability will be calculated by multiplying the number of chargeable units by the rate per unit, plus any indexing for inflation. Developers will be informed of the charge at the time the permission is issued.

Payment

  • Payment will be due on commencement of development under the permission. Developers will be required to notify the LPA of the intended commencement date. They would also be encouraged to state the name of the person who will be paying the CIL in advance of commencement. In the absence of details, the landowner will be liable.
  • Payment would normally be required within a specified period - probably 28 days - although the Government is exploring the possibility of payment by instalments. Development phased by an outline permission followed by reserved matters would require CIL to be paid by reference to each phase.

Enforcement

  • The liability will be registrable as a local land charge. There is likely to be a power for the LPA to add interest and surcharges to late and unpaid CIL. The ultimate enforcement power is that the LPA may stop development.
  • Section 106 planning obligations will remain when CIL is introduced, notably but not exclusively for affordable housing. Implementation
  • Regulations implementing CIL will come into force on 6 April 2010. However, because of the need for LPAs to produce the documentation outlined above, it is likely to be a little longer before the first CIL is levied.

The deadline for submissions to the consultation is 23 October 2009.