SIT up and pay up: the Government's proposed changes to CIL

England, Wales

Last week, the Government published a consultation on proposed changes to the current system of developer contributions (‘Supporting housing delivery through developer contributions’ 5 March 2018) including to the Community Infrastructure Levy (“CIL”). 

This follows the CIL review commissioned by the Government in 2015 which found that the current CIL system was not as fast, simple, certain or transparent as originally intended and recommended that CIL be replaced with a hybrid system of a broad and low level Local Infrastructure Tariff (“LIT”) in conjunction with section 106 contributions for larger developments. A Strategic Infrastructure Tariff (“SIT”) chargeable by combined authorities towards significant infrastructure was also put forward.

Instead of following the CIL review team’s recommendations, the government announced in November 2017 that CIL was here to stay but that it would consult on a number of changes to the regime which it is now doing.

The key proposals are:

  • Dis-applying regulation 123 pooling in certain circumstances.The current pooling restriction prevents local authorities from using more than five S106 planning obligations to fund a single infrastructure project;
  • Allowing CIL charging schedules to be based on the uplift in land to reflect value generated through planning permissions; 
  • Streamlining the process for local authorities to set and revise CIL charging schedules by aligning the requirements for evidence on infrastructure need and viability with the evidence required for local plan making; and
  • A further development tax in the form the CIL review team’s recommended SIT. The SIT would be introducible by combined authorities and joint committees with strategic planning powers to fund specific strategic infrastructure where there is a funding gap.The SIT is intended to operate in the same way as the London Mayoral CIL (a relative CIL success story), and will be collectable alongside any localised form of developer contribution.

The consultation confirms the Government’s intention to retain CIL subject to a number of tweaks. Contrary to the CIL review team’s suggested reforms, the consultation proposals would arguably increase CIL liability for developers under the regime as well as imposing a further levy in the form of SIT.

The consultation period for these proposals is due to close on 10 May 2018; in the meantime developers and charging authorities should continue to work under the current rules set out in the CIL Regulations.

Please contact our planning team for advice on how the proposed changes might affect you.