What is CIL?

A laypersons* introduction to the Community Infrastructure Levy

… usually referred to as CIL.

For more details, see the websites/ search for: DCLG – Planning Practice Guidance/CIL; and Exeter City Council – Planning/CIL

1 What is CIL?
CIL is the amount charged by a local planning authority on NEW building projects. The levy raised should be used to support development growth. Infrastructure may be physical or social projects (see 6 and 9).

CIL is a recent introduction to the planning system and will replace much of the requirement for section 106 agreements.

2 Who pays?
The developer or the landowner. It is a charge on all types of planning consent.
All new houses and flats qualify. Extensions or alterations of less than 100sq m (gross internal area) are excluded, as are self-build houses and social housing and charitable development which meet relief criteria.

Retail development qualifies. A charging authority can specify which types of development or areas are to be zero rated but for viability, rather than policy, reasons

3 How is the levy calculated?
The local authority sets a charging schedule. Exeter City Council consulted on its draft charging schedule in 2012/13. It then went to an independent examiner. It was implemented in December 2013. See 10 for ECC CIL charges.

The aim of CIL is to deliver infrastructure, not to deter developers or landowners from submitting planning applications. Government guidance states: Charging authorities should set a rate which does not threaten the ability to develop viably the site and scale of development identified in the Local Plan.

4 Appropriate balance
The levy is expected to have a positive economic effect on development. Sites and development in the Local Plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed is threatened. (National Planning Policy Framework)

5 Regulation 123 list
This will become a familiar number. The 123 is the list of infrastructure provision the local authority draws up and publishes. In addition to assisting the council to come to an appropriate figure for the levy, it gives developers an indication of how and where their contribution will be used.

Exeter City Council’s draft Reg 123 infrastructure list was included in its CIL report of December 2013.

6 Spending the levy
CIL can be spent on a wide range of infrastructure, including transport, flood defences, schools, hospitals and other health and social care facilities.

Facilities include play areas, parks and green spaces, cultural and sports facilities, academies and free schools, district heating systems, police stations and other community safety facilities. The levy may not be used to fund affordable housing.
Local authorities must spend the levy on infrastructure needed to support the development in their area, and they will decide what infrastructure is needed.

The levy is intended to focus on the provision of new infrastructure and should not be used to remedy preexisting deficiencies unless these deficiencies will be made more severe by the new development. It can be used to increase the capacity of existing infrastructure or to repair failing existing infrastructure, if that is
necessary to support development. (Planning practice guidance)

Local authorities can choose to use levy income to provide new or improved areas of open space to reduce the impact on protected sites (EC Habitats and Birds Directives).

7 Where do local communities come into it?
Planning Policy Guidance states that local communities will benefit from at least 15% of levy receipts following council consultation with the local communities in areas where development is taking place. The amount is capped at £100 per existing dwelling in the area. This is referred to as the neighbourhood
portion or neighbourhood funding.

The guidance also states that councils should consult communities with an adopted neighbourhood plan or neighbourhood development order in relation to 25% of levy receipts with no cap and no annual limit.

8 How does this apply to Exeter and to us?
The neighbourhood portion is passed directly to parish and town councils where development is taking place. Where there is no parish or town council, as in Exeter, the local authority holds the levy pot and DCLG guidance says:
“Should engage with the communities where development has taken place and agree with them how best to spend the neighbourhood funding.”

It should set out a clear and transparent approach using its regular  communication tools. The use of neighbourhood funds should therefore match the priorities expressed by local authorities.

This brings us to the current situation. The council is preparing a report on the governance of CIL to take to the Executive Committee later this year (2014).

9 Spending the neighbourhood portion
Neighbourhood funding can be spent a wider range of facilities and projects than the rest of the levy, provided it meets the requirement to support the development in the area. It can be spent on affordable housing.

10 Exeter City Council Charging Schedule
Residential £80 per sq m
Student accommodation £40 per sq m
Retail * £125 per sq m.
All other zero

* There are two charging zones: city centre, and rest of Exeter. City centre retail development is zero rated

For larger developments, payment may be by installments; final payment within 2 years of development commencement date. Phased development is handled accordingly. If a levy is less than £50,000, it is payable in full no later than 60 days after development commencement date. 2014 Government guidance states that where the levy is less than £50, it is deemed to be zero.

*This is a guidance note: not professional advice, correct at the time it was written. Please refer to Exeter City Council if you need any guidance or advice on CIL.