Budget 2017: Impact on the Community Infrastructure Levy


The Community Infrastructure Levy (CIL) was introduced by the Planning Act 2008, and is a levy which councils may enforce to support infrastructure developments such as new housing, schools, hospitals, flood defences and recreational facilities in the district area.

CIL’s are discretionary for Local Planning Authorities (LPA’s), with 20% of councils currently enforcing the additional fees. In these districts, most new developments are liable to the levy as long as they create an additional floor space of 100 square metres or more or create a new dwelling. Not only are the landowners liable for the levy, but also anyone involved in the development of the property. The current charges are set to a flat rate for developments in the same category of factors; including geographical zones within the district, the type of development and the scale of development, as set out by the charting authority in the charging schedule.

In the 2017 Budget, Chancellor Phillip Hammond announced further consultations into CIL reforms, contradicting rumours that the levy was to be abolished. The Chancellor’s Budget declarations were criticised by the CIL Review Panel who had previously stated that government were due to announce plans to reform CIL, however, Hammond simply pointed to further consultation in ‘detailed proposals’. The suggested reforms would allow LPA’s to set rates which ‘better reflect the uplift in land values between a proposed and existing use’. This would introduce different rates for different changes in land use rather than setting a flat rate for developments of the same type, reverting to a pre-1947 approach on planning legislation where LPA’s were able to take uplift based upon the increase of land value from developments. Reform consultation plans also suggested that the indexation of CIL rates will change, to reflect house price inflation rather than build cost.

It was additionally stated that further consultation would be carried out in regard to developer’s contributions towards CIL and would also include the removal of restrictions on ‘pooling’ contained in section 106, which is currently limited to known site-specific matters.

In response to the announced consultation, the Chairman of the District Council’s Network, John Fuller, commented that ‘we are very disappointed that the clarity we had hoped for over CIL is yet to materialise, some of the technical changes have been addressed but land value uplift has proved complicated in the past and is likely to delay urgent reforms’.  If the suggested reforms were to materialise, the unnecessary complexity of CIL’s would be reduced and would allow LPA’s to respond more quickly to changes in the market, achieving the desired effect of simplifying the relevant processes and rules.

Posted on 21st December 2017 in News

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