Community Infrastructure Levy Proposals
March 2010
Cambridge Consultant Surveyors Januarys has welcomed proposals for the Community Infrastructure Levy (CIL) the new development charge which is intended to largely replace the existing arrangements based on Section 106 agreements.
The system could allow councils to raise as much as £700 million extra per year. In return, developers will know for certain the size of contribution they’ll have to make when they plan a new project.
“The CIL will give councils and developers more options when it comes to planning gain,” says Colin Brown, Director of Planning at Januarys.
“The new ideas which could end up being part of CIL include; allowing payments of CIL to be made in-kind; allowing up to 100 per cent of CIL relief if developments would not otherwise proceed; doubling the standard payment period to 60 days; allowing local authorities to borrow against future CIL earnings.
“This new system promises to be much more transparent than the existing Section 106 agreements which allow councils to negotiate community or infrastructure projects in return for giving the green light to housing developments.
“When times were good,” said Mr Brown, “Councils could ask for pretty much anything in return for letting a developer build their homes.
“Some councils went for roads and schools, but many more were keen on getting large numbers of social houses built.
“At the time the agreements were signed, developers could afford to be quite generous with their Section 106 deals and still make a profit. As a result, nearly half of all the affordable homes that have been built so far have been funded through such agreements.
“Today, with the housing industry facing challenging times, those agreements could make many developments unviable. Planners need to adopt a more flexible approach which in turn could help to bring development forward.
The new CIL arrangements mean an end to site by site deals and should raise more money for councils. For developers, it means fairness and predictability.”
“It’s important to be aware that CIL does not kill off Section 106 agreements completely, although it does clip their wings. From April they’ll only be allowed for new developments and in a few years time they’ll be scaled back still further.”
“New developments, especially those that contain social housing, are an extremely important part of our public and private housing stock. It is therefore important that this existing legislation doesn’t fall into complete disrepute.
“I am concerned that agreements drawn up at the height of the housing boom may no longer be viable and could cause projects to be mothballed.