The Community Infrastructure Levy Regulations 2010 allow local authorities to charge a community infrastructure levy (CIL) on new developments to raise money to fund local infrastructure. The latest changes to those regulations came into effect on 1 September 2019 under the Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019.

The changes, which are largely uncontroversial, are summarised in Box 1 below. They are aimed at extracting more value from land, more quickly, and ensuring local communities are aware of the levy.

For example, penalties are more proportionate: a failure to notify a start on site will no longer invalidate exemptions and reliefs. Outline permissions granted after 1 September 2019 will no longer be exposed to CIL rate changes between grant of permission and reserved matters approval. Indexation is clearer and more certain. Communication is better: the published data will allow the developer contribution to affordable housing funding to be better understood.

But note that these changes:

Make it harder to withdraw from the CIL – withdrawal will require a consultation and explanation of how to replace lost infrastructure;

Also delete the restrictions on "pooling" section 106 contributions and using section 106 for CIL items. This allows tariff-style section 106 charging to return, alongside CIL, as a value capture tool;

Do not deal with all the current issues with the CIL. More reform will be needed, including those changes set out in Box 2.

CIL changes at a glance (from 1 September 2019)

New section 106 monitoring fees power

Pooling and double-dipping restrictions removed

Infrastructure funding statements required from 2020 (annual reporting on developer contributions, spending and CIL rates)

Commencement notice penalties diluted

Indexation arrangements clarified – RICS CIL Index from 2020

Section 73 changes – balancing and indexation fixes, easing of relief arrangements

Starter homes exemption clarified

Charging schedule consultations reduced to one round with no mandatory timeframe

Consultation where CIL is dropped

Enforcement process upgraded: bailiffs replaced with High Court enforcement officer process

Further reforms needed

CIL appeals to run where development is started

Partial reviews of charging schedules (in line with the 2017 Budget) – provide flexibility to correct strategic site assumptions

Authorities to borrow against CIL to forward infrastructure identified in local plans

CIL agreements for major schemes, including works in kind arrangements

CIL reviews to be triggered where high CIL rates are causing "red flag" failures (e.g. affordable housing yield)

Originally published in Construction Law.

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