The Mayoral Community Infrastructure Levy ("MCIL") and Crossrail in London

Thursday 2nd February 2012

The Mayor of London is seeking to raise £300m of the £14.5bn overall cost for the Crossrail project through contributions from the Mayoral Community Infrastructure Levy ("MCIL"). Developers will pay these contributions in addition to the Community Infrastructure Levy ("CIL") that the individual London Boroughs will be introducing. The Mayor has come one step closer to having the MCIL in London approved as the charging schedule was approved by an independent examiner.

MCIL in London

MCIL will be charged per square metre of development. The rate differs in the three proposed charging bands, which are based on the average house prices in each borough.

The rate in Zone 1 is set at £50 per m sq and will apply to all development in the London Boroughs of Camden, City of London, City of Westminster, Hammersmith and Fulham, Islington, Kensington and Chelsea, Richmond-upon-Thames and Wandsworth.

The rate in Zone 2 is set at £35 per m sq and will apply to all development in the London Boroughs of Barnet, Brent, Bromley, Ealing, Greenwich, Hackney, Haringey, Harrow, Hillingdon, Hounslow, Kingston upon Thames, Lambeth, Lewisham, Merton, Redbridge, Southwark and Tower Hamlets.

The rate in Zone 3 is set at £20 per m sq and will apply to all development in the London Boroughs of Barking and Dagenham, Bexley, Croydon, Enfield, Havering, Newham, Sutton and Waltham Forest.

Nil rates will apply for development used for the provision of education and medical services.

The Examiner's Report

Despite approving the scheme, the examiner's report did express some concerns about the impact of the proposed implementation of MCIL in London.

There may be certain boroughs who are disadvantaged by their allocation to a certain charging band. Wandsworth in particular was singled out as a borough that may be better placed in the second charging band, but the examiner stopped short of making a recommendation.

The report also considered the viability of the proposed charging rates. The report concluded that the anticipated 1% increase in the value of completed residential units might put some marginal schemes at risk, but considered the increase as not 'intolerable'.

Following the examiner's approval the Mayor will now consider a report from Greater London Authority officers, which will recommend that MCIL charging commences on 1 April 2012.

More information about the Mayor of London's proposals is available here.

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