DCLG launches review of Community Infrastructure Levy

The Department for Communities and Local Government has announced an independent review of the Community Infrastructure Levy (CIL).

The review will “assess the extent to which CIL does or can provide an effective mechanism for funding infrastructure, as well as recommend changes that would improve its operation in support of the government’s wider housing and growth objectives”.

The DCLG said the review – to be led by Liz Peace, former chief executive of the British Property Federation – would in particular:

• assess whether CIL is meeting its objectives of providing a faster, fairer, more certain and transparent means of funding infrastructure through developer contributions;
• look at the relationship between CIL and s.106 agreements;
• consider how reliefs and exemptions operate and whether the neighbourhood element of CIL is helping to increase community support for development.

Communities Secretary Greg Clark said: “This independent review will examine how we can improve the community infrastructure levy to ensure it best benefits local communities whilst delivering the houses the country needs.”

Planning Minister Brandon Lewis said: “Where communities benefit from development they are also more likely to support it, and the Community Infrastructure Levy has played a vital role in contributing to local infrastructure and creating that local support.

“As a government we want to build more homes, supported by people who live in the area and this review will look for new ways in which proposed development can benefit whole areas.”

The review group’s terms of reference and a call for evidence can be found here.

The British Property Federation welcomed the announcement, claiming that CIL had become “overly-burdensome and inefficient”. 

The Federation said it would like to see four key areas for reform: 

• Regular review: “Whilst it is welcome that Government has undertaken to review CIL this year, this must not be the end of the story. In some cases, the evidence base used for the initial CIL setting is now fully out of date, and not fit for purpose. It is crucial that local authorities are encouraged to regularly review their own charging schedules against market signals and to test them against ‘real life’ projects that reflect market conditions.”
• Strategic sites: “CIL simply does not work for complex or large-scale strategic sites, and a more site specific and targeted approach to infrastructure funding and other contributions must be taken.”
• Clarity between CIL and s106: “A fundamental premise of CIL was that it would be used to fund a set of identified infrastructure requirements, whilst s106 obligations should relate only to site-specific mitigations and affordable housing provision. In reality, this has not happened, and there is considerable overlap between the two. This fundamental issue must be addressed and clarity provided in order for CIL charge setting to be at the right level and to make the process work properly.”
• Integration of CIL with local plans: “There is a disconnect between the preparation of local plans and the formulation of CIL charging schedules, which local authorities should prepare in tandem, in conformity with the National Planning Policy Framework. It is critical that emphasis is placed on delivery of infrastructure, rather than just revenue collection.”

Melanie Leech, BPF chief executive, said: “Many of our members cite CIL as one of the biggest bugbears of the planning system, and there are plenty local authorities who would agree. Whilst some would like to see it abolished altogether, we believe that with the right changes, CIL could be a useful tool for ensuring infrastructure delivery on development sites. The creation of this group is a step in the right direction, but it must not stop here. It is crucial that Government take any recommendations on board, and works with both public and private sectors to ensure that the regime really works in the future. 

“CIL was supposed to provide a quicker, fairer and more efficient way of delivering infrastructure to support development and our members have always supported this principle, but we are concerned that in many places it is not working. We look forward to engaging with the review panel to ensure that CIL becomes less of a burden and more beneficial.”