Clarification on CIL published: Goverment minded to define chargeable units of development at national level

The Community Infrastructure Levy (CIL), a new charge which local authorities in England and Wales will be empowered - but not required - to charge on most types of new development in their area, is coming into play . CIL charges will be based on simple formulae which relate the size of the charge to the size and character of the development paying it. The proceeds of the levy will be spent on local and sub-regional infrastructure to support the development of the area.

On the current timetable CIL will not come into force before spring 2009 and further consultation on the detail of the new regime is promised later this year.

Clarification regarding CIL comes in a policy document just published by Communities and Local Government (CLG), which has made it clear that the definition proposed for what constitutes infrastructure will be wide enough to enable local authorities to decide what infrastructure is appropriate for their local areas.

The document stressed, though, that affordable housing will continue to be provided through the existing system of negotiated planning obligations (i.e. the section 106 route).

Ministers have stipulated that those authorities who prepare development plans should be charging authorities. The Mayor of London will have a power to charge CIL, but the department has now decided to drop proposals for the Secretary of State and Welsh ministers to be able to charge the new levy.

The policy document makes it plain that local authorities will have the freedom to work together to pool contributions for CIL and that public sector bodies, like the Regional Development Agencies, could provide funding for infrastructure 'reimbursed from a CIL income stream on a forward funding basis'.

CLG has insisted that before CIL can be charged there must be an up-to-date development plan for the area that has set out the likely cost of the required infrastructure. Authorities will be expected to prepare a new type of document; a draft charging schedule within the Local Development Framework, though not formally part of the development plan. The schedules will be subject to rigorous consultation including a public inquiry.

To ensure consistency and simplicity the Government is minded to define at national level the descriptions of the unit of development that may be charged (i.e 'per dwelling or per habitable room' for residential) as well as exemptions. Ministers have conformed CIL will not be charged on householder applications.

The amount of CIL to be paid will be calculated when planning permission is granted. Minsters are currently proposing that the levy will be paid within 28 days of commencement of the scheme although they are also considering payment by instalment. Where development is phased (i.e. an outline planning permission followed by reserved matters) each phase could pay CIL separately.

The Government has confirmed that use of the CIL regime will be discretionary and will sit alongside the current s106 arrangements. Ministers are considering whether to place restrictions on the use of planning obligations once CIL is introduced.

Planning minister Caroline Flint said: 'Almost all development creates some need for infrastructure and services so it is only right that development contributes a fair share alongside the billions of pounds of investment the government is putting in.'

She added: 'Developers need as much certainty as possible given the current challenges they face from the international credit crunch, which is why I have been working closely with the industry and local government to ensure that CIL will deliver what is needed whilst giving more certainty and confidence compared to the current system.'

At the same time as revealing further key detail about CIL the Government has published two new research reports relevant to planning obligations and CIL. The first is an update on the use of planning obligations in England which covers the period 2005-2006. The second suggests ways of improving the negotiations for affordable housing under the s106 regime.

The former indicated that the value of obligations - estimated to be around 4bn GBP - had risen 57 per cent compared to the 2003-04 period, and that the proportion of planning permissions accompanied by planning agreements fell by nearly seven per cent, although there was an increase in the number of major applications which included planning agreements.