Ashfords Solicitors - Planning Reform Bill - The Community Infrastructure Levy

The main emphasis of the Bill is on continuing to speed up the planning process, particularly in respect of major infrastructure proposals. The Bill also introduces the legislation that will pave the way for what is now referred to as the Community Infrastructure Levy. The levy is the proposal that has emerged following the extensive consultations carried out by the Government to supplement the current section 106 regime.

The levy will replace, in part, certain matters that are currently dealt with in section 106 agreements. Section 106 agreements will remain in reduced form, to continue dealing with affordable housing and on-site requirements.

For a short while the Community Infrastructure Levy had previously been known as the Statutory Planning Charge. It was introduced under this name following the Government's announcement in the October 2007 pre-budget report that it was abandoning plans to introduce the Planning Gain Supplement, a development tax that had been recommended following the review of housing land by Kate Barker.

When introduced in October the main features of the new levy were described as follows:-

· it would be based on a costed assessment of the infrastructure requirements that arise out of development within a local authority's area, taking account of the impact on land values;

· the levy would include contributions towards costs of local infrastructure as well as infrastructure of sub-regional and regional importance;

· policies introducing the levy would be tested through the Development Plan process;

· the intention was that Local Authorities would be able to use the levy as a supplement to a negotiated Section 106 Agreement. Section 106 Agreements would still be necessary in order to secure affordable housing and to address specific on-site issues; and

· the levy would apply to both residential and commercial development, subject to low threshold levels.

The detail of the Community Infrastructure Levy ('CIL'), as introduced under the Planning Reform Bill, is intended to be dealt with in regulations. The Bill says the purpose of CIL, which will be embodied in regulations, will be to ensure that the costs incurred in providing infrastructure to support the development of an area can be funded by landowners who will have seen the value of their land increase as a result of permission being granted for development. However, although the detail remains to be spelt out, the draft legislation makes certain aspects of the proposed CIL clear, as follows:-

· CIL will be payable when development is commenced and will be payable by the owner of the land at that time;

authorities will be expected to publish CIL rates and to revise them from time to time. The regulations will allow the CIL to be calculated either by reference to fixed amounts or by reference to increases in land values, arising from the grant of planning permission for development;

· the authority that collects the CIL will be obliged to apply it to the funding of infrastructure and the chargeable authorities may be required to publish a list of projects that are to be funded or partly funded by the CIL. The application of the CIL funds may be retrospective and could be used for funding works already carried out by the authority;

· the regulations may include a provision for the giving of guarantees or indemnities in respect of the payment of the CIL;

· the regulations may include provision for the payment of CIL either on account or in instalments. They may also provide for payment in lieu, for example by the provision of land or works;

· the regulations make provision for enforcement of the CIL payments, with expected regulations providing for the payment of interest and the imposition of penalties for non payment. The regulations may also provide for the suspension or cancellation of a planning permission in the event of non payment of the CIL and can enable authorities to prohibit development until the CIL has been paid and to make it a criminal offence not to pay its CIL; and

· The Secretary of State will be given certain reserve powers in relation to CIL, including the power to set maximum amounts of CIL and to direct authorities as to how monies received by way of CIL are to be spent.

The Government is currently consulting with specific stakeholders on the proposed contents of the regulations. Many planning authorities are already promoting tariffs (or roof taxes) based on existing law and policy and it is anticipated that they will be able to base their Community Infrastructure Levy on the work that they have carried out so far.

Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.

30th November 2007

Key Contacts

Planning Reform Bill - The Community Infrastructure Levy

Introduction