Community Infrastructure Levy - will it work?

I saw an interesting piece in "Planning" today putting forward some views that CIL cannot meet our infrastructure needs. To raise the funds to meet the cost of infrastructure would render development unviable at least in the current climate. Of course, for too many years we have underinvested in infrastructure. CIL is not intended to pay for infrastructure deficit which already exists (although it may often be difficult to know where the line is between pre existing and new infrastructure) and to compare CIL with 106 and say "development won't be viable under CIL or CIL can't raise sufficient funds" ignores the fact that one of the reasons that many developments are stalling now, is that the cost of s 106 provision is prohibitive. Many developers are renegotiating s 106 obligations in order to make  their schemes viable - if they succeed, then to the extent of that success a "deficit" is created.

Under planning gain supplement, the forerunner to CIL, the idea was to cream off some of the increase in land value (on the grant of planning permission)  in order to pay for infrastructure. This focus on land values was fatal to the PGS concept because it drew such opposition. Now the focus is on cost of infrastructure (taking account of central goverment funding) being apportioned across development

 

But scheme viability (an important issue in CIL because the authority should not set a CIL charge which will render development unviable) is driven by a number of factors and a very significant one is the price paid for the land. it may be that for CIL to work, land values must drop/remain low (or at least deals already struck must be revisited) - but somewhere along the line everyone in the property industry (including landowners) must face the fact that the infrastructure must be paid for. Recently  I have seen much more cooperation between Councils/developers to bring schemes forward - it is to be hoped this can continue.

 

A practical problem with CIL (rather than a legal one) is that the payment of it is too front loaded. We need to see proposals for delayed/installment payments and this will assist on viability and help keep land values at an acceptable level for land owners. If land values fall as a result of CIL, many owners will sit on their land and wait for things to change - which may mean we have more CPOs by planning authorities

Comments

[leeds solicitors]

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