What does ‘Community Infrastructure Levy’ mean for you?

Some interesting statistics have just been published by Central Government in the form of a summary of Community Infrastructure Levy (CIL) being applied by various Local Authorities across the country.

CIL is intended to replace Section 106 of the Town and Country Planning Acts as the main means of collecting so called ‘Planning Gain’ benefits from developers. Critics say that S106 has become too complex to administer, time consuming to apply and ineffective as a means of delivering essential infrastructure. It is, say the critics, one of the main reasons why it takes so long to build new homes in the UK

CIL is intended to simply and streamline the process of collecting money from developers in order to provide essential infrastructure not just to housing sites, but for ALL forms of development.

CIL was introduced 2 years ago, but there was little guidance from Central Government as to the amount of Levy to be charged on different types of development, and how the levy applied in practice. Many Local Authorities- including UDC- opted to retain the use of S106 until further and better market based evidence emerged of the use of the levy in practice, and crucially how it compared to S106 in terms of the amount of money it actually raises on a development by development basis.

The evidence now seems to be available in the form of a 51 page analysis of CIL charges across the country. It varies greatly by region, but in our region, the following examples apply:

  • Chelmsford, Cambridge and Colchester are all charging £125.00 per square metre ( SM) per new house regardless of size or type.
    For a typical 3 bed 5 person (3B/5P) semi detached or linked terrace house of about 35 SM on plan area, this amounts to £4375.00
    For a typical 4 bed 7 person (4B/7P) home of about 50 SM on plan area CIL will be about £6250.00
    For commercial premises, Cambridge is charging £75 per SM, Colchester is charging £150 per SM.
  • A typical superstore such as Waitrose in Saffron Walden or Tesco in Dunmow probably average about 15,000 SM on plan area, and would therefore cost £1,125,000 in CIL in Cambridge and £2,250,000 in Colchester.
  • In Dunmow, for example, a developer is proposing to build 350 new homes ( 200 3B/5P and 150 4B/7P) plus a 15,000 SM supermarket. If Cambridge CIL charges were applied here, this might raise about £2,937,500 in CIL which would be collected upfront by UDC and distributed to various other bodies including ECC, to pay for infrastructure.

25% ( about £750k) would be payable to Dunmow Town Council because it has concluded a Neighbourhood Plan that has been found sound on examination.This is a new and potentially game changing feature of CIL. It affects all 53 town and parish councils throughout the District and gives them direct entitlement and access to levels of funding that they will not have seen before.

This could open up a range of new and exciting opportunities for UDC to work in partnership with the towns and parishes to ensure that this money is spent wisely on an ongoing programme of capital projects aimed at enhancing and improving all of our lives here in Uttlesford. What do residents think?

 

4 thoughts on “What does ‘Community Infrastructure Levy’ mean for you?

  1. Neil Hargreaves

    In Nov 2012 UDC commissioned consultants to review CIL for Uttlesford

    This is what Andrew Taylor wrote in an email:
    ‘As part of our plan we have to demonstrate viability of development sites.
    As a result we have commissioned BNP Paribas who are experts in this field to advise us. Their advice will be taken into account as we move forward to confirm housing sites for the next part of the Local Plan process.’

    In April 2014 the Plan Working Group minutes say ‘agreed that the Council would not pursue the introduction of CIL but keep the situation under review.’

    In a letter to Paul Gadd in May 2014, Roger Harborough wrote ‘The council, as a potential charging authority, has to prepare a charging schedule, based on proposals for additional investment in infrastructure to support development if it wishes to exercise the CIL option’

    So there we have the ‘UDC answer’ – they put up a Plan without specifying anywhere near enough infrastructure so CIL wouldn’t fly. If you haven’t got an infrastructure plan and a sound cost estimates you have no basis to work out what CIL charge to make – and developers could (reasonably) argue about it.

    Mr H also said some requirements are local to the site and therefore still need s106. But CIL does not rule out s106. You could do s106 and then discount the CIL charge.

    The consultant’s report is on the UDC website somewhere but I couldn’t find it – Google of course finds several other councils implemented CIL strategies!

    Reply
  2. Joanna Francis

    Using your Dunmow example, if a landowner wanted to put the same development at Great Chesterford which currently has no Neighbourhood Plan, the CIL neighbourhood payment would be capped at approx 600 * £100= £60K which is roughly equivalent to only one years precept and the same amount of benefit could have been achieved through Sec 106 negotiations. If a PC received received the full £750K because they had an NP, they would really struggle to spend that amount in 5 years. What is the benefit to smaller communities (which are likely to not have NPs) where the developments are likely to be much smaller?

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    • R4U

      A couple of problems with Section-106 agreements: firstly they are required to be directly “Relevant, Proximate and Proportional” to the development they are associated with, so in reality no big infrastructure ever gets delivered by them; secondly s106 provides no mechanism for a town or village to get financial gain from development – and therefore almost no benefit for existing residents or the wider community.

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  3. Tony Clarke

    If a project such as the one I described were to take place in smaller village, it would perhaps double it is size and population in a very short space of time. Experience shows this would have a disproportionate effect on the existing infrastructure. It is usually the case that this effect would not be fully or even partly dealt with by a section 106 agreement – one would get the pain but no gain. However CIL money could be used to fill that gap, assuming always that there is some form of master planning process in place that would identify the projects needed to fill that gap. For that reason it is a good idea for every parish to have a Neighbourhood Plan – one gets a bigger slice of the cake.

    In Dunmow, we could spend the money very quickly on a range of projects needed to take the strain off our already over-stressed infrastructure, some of which we have been waiting for for a very long time.

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