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22/05/2015

CIL - more questions than answers. Still.

Words:

Five years in and the Community Infrastructure Levy has yet to produce anything much in the way of community infrastructure, says Quod's Tom Dobson. So should we stick with it?

Tom Dobson of QuodA faster, more certain and transparent way to fund infrastructure to support development. That was the government’s aim when the community infrastructure levy (CIL) was introduced in 2010. Five years on, with section 106 pooling restrictions kicking in, what have we learned?

First and foremost, that it’s still here. It has survived one change in government, something that no previous ‘planning tax’ has done. It will probably survive this election just gone, too.

Only a handful of councils have been charging for over a year, but it looks like more than half of the 340 possible authorities could charge by the end of 2015.

The regulations, at 150 pages, are long, complex and subject to regular change. There has been a set of amendments each year CIL has been in place. In this way they are more like tax than planning regulations.

But CIL has not actually raised much money. Yet. In 2013/14 a total of £50 million was collected, 95 per cent of which was by the Mayor of London for Crossrail. It remains to be seen whether collection will match or exceed the government’s anticipated £1 billion annually.

If the mayor’s experience is anything to go by permissions drop and receipts build slowly after implementation before accelerating as new consents are implemented.

"After five years, has CIL met the government's original objectives? Most developers would say 'No'"

As a result it hasn’t yet delivered much infrastructure or facilitated much development. And the evidence presented at examinations suggests that even if revenue matches expectations there will still be very large infrastructure funding shortfalls.

The government has commissioned research to inform its promised five-year review, which will add to the evidence. But as few authorities have been charging for long it will be a year or two before firm conclusions can be drawn.

In the meantime developers and local authorities need to grapple with the regulations and how section 106 works after 6 April. This will be particularly important where expensive infrastructure is needed to enable large developments.

After five years has CIL met the government’s original objectives? Most developers would say ‘no’ on speed and 
certainty.

Will it support increased development? Only if it is set at a reasonable level, managed flexibly and provides certainty that vital infrastructure will be delivered. Otherwise we will just have imposed another bureaucratic layer on the system, made section 106, which generally worked well, more difficult, and added costs with no clear benefits.

Tom Dobson is a director at planning consultancy Quod

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