Community Infrastructure Levy

Community Infrastructure Levy
Name	Community Infrastructure Levy
Type	Planning charge
Jurisdiction	England and Wales
Introduced	2008
Legislation	Planning Act 2008; Localism Act 2011
Administered by	Local planning authorities
Status	In force (subject to reforms)

Community Infrastructure Levy

The Community Infrastructure Levy is a statutory charge on new development introduced to help fund infrastructure required for growth in England and Wales. It operates alongside planning mechanisms such as Section 106 agreements and planning permission processes managed by local planning authorities including London Borough of Camden and Manchester City Council. Its design and amendments have involved national actors such as the Department for Communities and Local Government and legislative milestones including the Localism Act 2011 and the Planning Act 2008.

Background and Purpose

CIL was introduced following reviews by bodies including the Barker Review of Land Use Planning and debates in the House of Commons and House of Lords about funding for infrastructure linked to development. The levy aimed to provide a transparent, predictable mechanism to capture contributions for projects such as transport schemes in Transport for London networks, school places in Department for Education plans, and green infrastructure promoted by organisations like Natural England. Prominent local adopters included the City of London Corporation, Bristol City Council, and Birmingham City Council, while national policy was influenced by ministers such as Gordon Brown and Theresa May during reform periods.

Legal Framework and Administration

The statutory basis stems from the Planning Act 2008 and subsequent regulations enacted by the Ministry of Housing, Communities and Local Government. Administration is carried out by local planning authorities, including Greater London Authority for strategic functions, and unitary authorities such as Leeds City Council and Cardiff Council. CIL charging schedules require viability evidence often prepared referencing guidance from bodies like the Royal Institution of Chartered Surveyors and scrutiny by independent examiners drawn from panels similar to those in inquiries by the Planning Inspectorate. Judicial review challenges have been brought in courts including the High Court of Justice and considered by Lord Chief Justices in precedent-setting cases.

Charging and Calculation

Charging schedules set rates by development type and zone, informed by viability assessments that may reference market indicators in areas such as Canary Wharf, Oxford, Cambridge, and Manchester. Rates are expressed per square metre and vary between brownfield sites like those in Newham and greenfield allocations in authorities like Cornwall Council. Calculations account for reliefs, indexation to inflation measures such as the Retail Prices Index, and interactions with Section 106 obligations. Developers, including major housebuilders like Persimmon plc and Barratt Developments, frequently commission viability studies citing comparators like Bicester Village or regeneration projects in King's Cross.

Exemptions, Reliefs, and Payments

Statutory exemptions cover charities and self-build dwellings, while discretionary reliefs—such as social housing relief—are administered by local authorities including Liverpool City Council and Newcastle City Council. Payment mechanisms include phased payments by instalment policies adopted by authorities like Leicester City Council and surcharges for late payments enforced under regulations overseen by the Crown Prosecution Service where criminality is alleged. Large national schemes, including those by developers like Taylor Wimpey and infrastructure providers such as Network Rail, negotiate timing and liabilities, sometimes invoking case law from appeals in the Court of Appeal and Supreme Court of the United Kingdom.

Use of CIL Revenue

Revenue is earmarked for infrastructure in local plans prepared under frameworks such as National Planning Policy Framework documents and neighbourhood plans championed by parish councils like Lichfield and community groups seen in Camden wards. Strategic allocations have funded transport projects overseen by bodies like Highways England and cultural facilities supported by institutions such as the British Museum and Royal Shakespeare Company. Regulations require a portion to be passed to neighbourhood forums and parish councils, aligning with community projects similar to those funded in Salford and Portsmouth.

Compliance, Enforcement, and Appeals

Compliance is monitored through liabilities and demand notices, with enforcement actions including stop notices and breach procedures heard by tribunals such as the First-tier Tribunal (Property Chamber). Appeals against charging schedules and liability notices have proceeded to the Upper Tribunal and courts, with significant rulings involving judges from the High Court of Justice. Enforcement can involve charging orders and, in extreme cases, insolvency proceedings engaging insolvency practitioners and courts such as the Court of Appeal.

Impact, Criticism, and Reform

CIL has been credited with raising funds in authorities like Manchester and Bristol but criticised by stakeholders including developer groups such as the Home Builders Federation and housing charities including Shelter for potentially reducing housing delivery in high-value markets like London and Cambridge. Academic analyses from institutions like the London School of Economics and policy reports by think tanks such as the Institute for Fiscal Studies and Resolution Foundation have debated its distributional effects and administrative costs. Reforms considered by ministers including Robert Jenrick and policy advisers have explored replacing or amending CIL in light of recommendations by commissions such as the Hodge Review and evidence presented to select committees of the House of Commons Communities and Local Government Committee.

Category:Taxation in the United Kingdom