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08/11/2019

Legal landscape: CIL reform – will it work?

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Recent reforms to the developer infrastructure contributions system fall short of the major overhaul needed, says Kate Ashworth

The Community Infrastructure Levy (CIL), which came into force in April 2010, is a charge per square metre that was described as a tax to be applied to all developments in accordance with the local authority’s charging schedule. It was intended to fund the local infrastructure needed to support the cumulative impact of local development.  

CIL – a brief history

CIL was intended to be a fairer, faster, more certain and more transparent system of securing developer contributions for local infrastructure than section 106 contributions, but this is not how things have turned out. Uptake of CIL by local authorities has been slow and even now, more than nine years later, fewer than half of the local authorities in England and Wales have an adopted a charging schedule.

The interaction between CIL and section 106 contributions may be one reason for the slow uptake. If infrastructure was included on the regulation 123 list as being funded by CIL, a contribution could not be sought for that type of infrastructure through a planning obligation. There were pooling restrictions, too, which meant a local authority was not able to ask for more than five contributions for a single piece of infrastructure through planning obligations.

"Where local authorities do have a charging schedule in place, there is now a possibility of double counting"

These restrictions led many local authorities to decide not to adopt CIL and continue to seek contributions for site-specific infrastructure through planning obligations or limiting the types of infrastructure listed on the regulation 123 list. As a result, section 106 agreements for site-specific contributions are still common.  

Recent reform

The CIL Review Group proposed major reform to the existing system. However, its proposal of a hybrid system with a low-level ‘local infrastructure tariff’ to apply to all development with no exceptions, and section 106 contributions for larger developments, received no support from the government, and the strategic infrastructure tariff is nowhere to be seen. But on 1 September two key changes came into force.

  1. Pooling restrictions have now been removed. For local authorities without a charging schedule this is incredibly helpful and will enable them to appropriately fund larger pieces of infrastructure work using contributions from more than five developments.
  2. The regulation 123 list has been replaced with a requirement for local authorities to publish an annual infrastructure funding statement. This must set out the infrastructure on which the levy is intended to be spent in the next year, as well as financial information from the previous year about actual collection and spending.

Developers should welcome this change in terms of transparency. However, a possible unintended consequence of the change is that the link between CIL and infrastructure no longer exists and there are no restrictions on spending or pooling. So where local authorities do have a charging schedule in place, there is now a possibility of double counting, particularly for major developments.

Developers will want to seek confirmation of what the CIL payments are being spent on to ensure that no double counting is taking place and may want to invest time scrutinising each annual infrastructure funding statement.

These changes are nothing like the total overhaul recommended by the CIL Review Group, but will they help simplify the process? Probably not to the extent that everyone had hoped.   


In brief

  • CIL was intended to be fairer and faster than the section 106 system, but more than half of authorities have still not adopted it 
  • The CIL Review Group proposed major reforms to the system, but failed to win government support 
  • Some restrictions have recently been removed, which should improve transparency but could also cause ‘double counting’ of developer contributions

Kate Ashworth is an associate with Womble Bond Dickinson, specialising in planning and infrastructure

Image credit | iStock

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