Band on the run

Dialogue iStock 000009191235XSmall 146X219Can the Community Infrastructure Levy be used to fund broadband? Malcolm Dowden examines the possibilities.

As more local authorities adopt the community infrastructure levy (CIL) as part of their planning gain regime there are sharply diverging opinions on its use to fund the roll out of superfast broadband. These differences reflect the related difficulties of interpreting the legislation and of applying it to the particular economic conditions and aspirations of each area. Broadband provision may be a legitimate element of CIL in areas shown to be on the wrong side of the “digital divide”, but not in areas with sufficient existing or prospective commercial provision. The local authority's decision must be based on robust evidence to avoid the risk of challenge.

CIL is a financial charge which local planning authorities are entitled (but not obliged) to charge on development in their area. The money raised is to be spent on local infrastructure. It replaces s 106 agreements as a means of capturing some of the land value released from planning permissions. Where an authority elects to charge CIL, it can still ask for a s 106 agreement. However, to prevent double charging for infrastructure, that agreement must be “scaled back” dealing only with affordable housing and “on-site” matters, including the direct replacement of facilities or amenities required as a result of the development.

Infrastructure & development

There is no exhaustive definition of infrastructure for CIL purposes. It can include:

  • roads and other transport facilities
  • flood defences
  • schools
  • medical facilities, and
  • open spaces.

Whether adopting these categories or looking beyond them to consider broadband, an authority must identify infrastructure that is “required to support the development of its area”. Further, because CIL is conceived as a “gap funding” mechanism it is applicable only where there is a demonstrable shortfall in funding from other sources, whether public or private sector.

CIL is intended to focus on new development and not to be used to remedy pre-existing deficiencies in local infrastructure. A proportion of the funds raised in each neighbourhood must be spent within that neighbourhood, to ensure that it receives sufficient money to help it manage the impacts of the new development in its area.

Each authority must base its charging schedule on an up-to-date development plan and satisfactory infrastructure planning to target the amount of funding to be raised. It must take account of the potential effects of CIL on the economic viability of development in its area. This includes other costs for developers such as affordable housing requirements.

The process of developing and adopting a CIL charging schedule includes public consultation and consideration of specific legal advice together with detailed analysis of the area's particular infrastructure needs. For some areas, broadband provision is either already available or can realistically be expected to arrive through private sector investment, possibly supported by funding from Broadband Delivery UK (established in 2010 with a budget of £530m as a “delivery vehicle” within the Department for Culture, Media and Sport). In those areas, the validity of using CIL to fund broadband would be vulnerable to challenge.

Charging schedules published in draft or adopted to date clearly identify broadband provision as a “borderline” issue for CIL.

Newark and Sherwood adopted a conservative approach, defining infrastructure as:

  • Strategic infrastructure is improvements to the highway network which are required because of the growth of the district up to 2026, and which cannot be attributed to the development of any one site, and contributions to a secondary school where the location of growth requires additional secondary school provision.
  • Local infrastructure is the development of facilities or services that are essential for development to take place on individual sites, and refers to the facilities or services that are essential for development to occur, or are needed to mitigate the impact of development at the site or neighbourhood level.

On that basis, Newark concluded that broadband provision was not a proper application of CIL.

For Torbay, by contrast, broadband is considered essential to promote growth and as part of a strategy to improve links with other places, nationally and internationally. Viewed in that context, broadband infrastructure provision would be permissible.

Neither view can be regarded as inherently “correct” or “incorrect”. For areas in urgent need of rapid broadband roll-out, there may be a strong case in favour of the authority taking a leading role in providing passive infrastructure (ducts etc) using powers contemplated by the Communications Act 2003, particularly if those routes allow electronic communications operators to avoid the need to cross private land where the charges for access can often double the per-kilometre cost of installing fibre for superfast broadband.

Malcolm Dowden is a Consultant at Charles Russell LLP.