Community Infrastructure Levy will slow development
The Birmingham office of international property consultancy Drivers Jonas hosted a seminar on the latest proposals for Community Infrastructure Levy (CIL). Here Jill Astley, development partner at the company, comments on the key findings of the seminar.
Causing confusion amongst developers and landowners, the Community Infrastructure Levy (CIL) was originally put forward as a replacement for the criticised planning gain supplement.
The CIL is intended as a standard charge levied on new development (including conversion) to fund infrastructure, such as roads, flood defences, medical facilities, open spaces and schools. The charge may be payable by landowners who seek to develop their estate rather than imposed on the developer.
CIL was first raised in October 2007, introduced formally by the Planning Bill in November 2007, and is passing through Parliament. Draft regulations outlining finer detail are expected early in 2009 and the levy will be introduced once these come into force.
The purpose of CIL is to contribute to the costs of infrastructure to support development. Its aim is to ensure such costs are at least partly met by the scheme(s) that cause such expenditure, and it will usually be indirectly funded by the landowner.
This month, the government ostensibly scrapped controversial plans to peg the new community infrastructure levy to the increase in land values for new developments. The Planning Bill amendments remove the link between contributions and any “increase in value from planning permission”.
Under pressure from a lobby group including the Home Builders Federation (HBF) and the British Property Federation (BPF), a series of amendments were put forward to the Bill which will mean the CIL is set according to the needs of the local community rather than value of land.
The BPF warned placing an emphasis on land value could increase or distort the intended purpose of CIL, primarily to raise funds that make a contribution to infrastructure costs. But it is arguable an assessment method which does not take into account land value at all could put deprived areas at a disadvantage, hence the Bill allows for CIL to take into account economic viability.
In theory, the CIL should only cover infrastructure projects identifiable and necessary to enable development or lessen negative impact,
