The Government announced earlier in November that the Community Infrastructure Levy is to be retained. Although the exact detail is yet to be finalised, the Levy is to be paid in line with the Government's policies on 'localism'.
Commenting on this decision, the Decentralisation Minister, Greg Clark, has promised that 'Neighbourhoods will now get a direct cut of the cash paid by developers to councils - to spend how they wish to benefit the community, from parks and schools to roads, playgrounds and cycle paths'. Quite how this will work in practice is yet to be seen.
The decision has largely been met with a warm response from regeneration and property experts. However, Liz Peace, Chief Executive of the British Property Federation, has identified some problems with the scheme, such as there being no obligation for the money raised under the Levy to be spent on improvements.
The Levy is an alternative to protracted section 106 agreement negotiations; instead a flat rate is paid on public improvements in the local area. This is intended to provide a fairer, faster and more transparent system allowing developers to calculate how much they will have to pay towards infrastructure at the outset. The Government believes the Levy has the potential to raise £700 million by the end of 2016.
The Levy was introduced in April 2010 and these proposed changes are due to come into force in April 2011.