The Community Infrastructure Levy is coming to a town near YOU!
Tax, tax & more tax for house holder extensions - that be the answer!
Many house extensions will now be caught by this developer or land owner tax which
in many cases will be the equivalent of a 10% added tax on the build cost for an extension - Yes that's right
- the threshold for developer contributions for any residential development work is now attributable to householder
extensions or garden outbuildings exceeding 100 square metres and as low as one new dwelling. This is to fill the
funding gap for infrastructure that is created by your development.
The Community Infrastructure Levy (CIL) is a new tariff system that enables local authorities to make a
charge on most forms of new development to fund infrastructure; it will largely replace s106 developer
contributions as a way of securing pooled contributions towards new infrastructure and thus will be an important
mechanism for securing infrastructure improvements throughout the District.
It takes the form of a charge per square metre of net additional floorspace of development. The levy rates
will have to be underpinned firstly by evidence of the infrastructure needed to support new development and
secondly by evidence of development viability.
Most councils are now preparing the evidence base for CIL prior to two phases of consultation and a
public examination, culminating in the introduction of a CIL by a certain date. My own Council WDC is now
about to adopt the system in Early November 2012 being only one of seven LPA's nationally to adopt the new
land owner tax as a ‘frontrunner’.
The CIL Regulations took effect on 6th April 2010 and provision for CIL is included
within the Localism Bill; a “meaningful” proportion (yet to be defined) of the funds levied will be required to be
spent in the local area where they are derived from. Many Local Cabinet members supported the principle of a
CIL for preparation during the coming 4 years.
CIL is intended to supplement rather than replace other funding streams and is intended to
promote development rather than hinder it. (if someone can tell me how that oxymoron works
I will be most enlightened).
We are told that its main advantages are that:
1 - It will be a modest (1-4% of total development costs), fixed, non-negotiable
charge which is therefore transparent and predictable. This must be an aspiration 'get out of jail free
card' target figure as my own councils levy rate is £125 per square meter being around 10% of the construction cost
- THEY LIE - you have been warned.
2 - It will be less time consuming and complicated than s106 planning
obligations, with less negotiation with applicants and drawing up of legal agreements. When has any change
in a council run system ever been more simpler & transparent?
3 - The Council will be able to use anticipated CIL receipts to secure
additional borrowings to deliver capital infrastructure items - Yes, get more debt just like the last 20 years
- its been most successful hasn't it?
Section 106 Agreements will still be used, but in a much more restricted way, notably they will not be
able to be used towards infrastructure schemes that require contributions pooled from many different developments.
Where large scale developments would, by itself, or in combination with a small number of other developments fund
particular items of infrastructure then s106 Agreements are still most likely to be used.
Affordable housing will also still be secured using s106 agreements to ensure this is provided on site.
Other site-specific elements such as open space and highway improvements may also continue to be secured by way of
a s106 agreement.
Current progress and timetable
Many Councils have now adopted a timetable and key milestones within a programme. Check
out your own Council to see how far down the line they are with this new taxation system. A Members
seminar is usually the next stage, prior to an Individual Cabinet Member Decision and public consultation on the
Preliminary Draft Charging Schedule. Taking representations into account the Council will undertake further work if
necessary before consultation on the Draft Charging Schedule in the new year. That's how its meant to operate
in most cases.
Most Councils have been working with infrastructure providers since 2008 in preparing its
Infrastructure Delivery Plan to support the Councils Development Framework and many are updating this
document following further engagement. This will form the basis of identifying the total cost of infrastructure
that can be funded from CIL.
A requirement of CIL is that it should strike an appropriate balance between the desirability of funding
infrastructure from the levy and the potential effects that imposing the levy may have upon the economic viability
To this end the some Councils have appointed consultants, to undertake assessments of viability of
various types and scales of development across the District. Officers usually work closely with the
consultants to produce the evidence required and a final report.
My own Council Wycombe DC have been selected by the Government as a ‘frontrunner’ in the development
of a CIL. Officers will work mainly with the Planning Advisory Service (part of the Local Government Group funded
directly by the Department of Communities and Local Government) and will receive advice and support throughout the
process including workshops with other frontrunner Councils and one-to-one meetings.
The Council will be the collecting authority for CIL in most cases, and will have a key role in
collecting, monitoring and distributing the funds. It is clear from the initial background evidence work undertaken
that CIL will not generate sufficient funding to pay for all the District’s major infrastructure needs and there
will need to be a process of governance and prioritisation to identify when and how CIL receipts are
There will also be a significant project oversight role to ensure that CIL funded projects are developed
and implemented effectively. The corporate governance and operational processes needed to underpin an effective CIL
process will be considered further as work on the CIL develops.