Earlier this year, it was revealed that only a quarter of councils were likely to have a Community Infrastructure Levy (CIL) in place before the April deadline.
In fact, fewer than 80 councils had CIL in place at the end of March this year. There is no statutory obligation for councils to charge CIL, but the consequences for those who have missed the deadline could be alarming, not only for the council concerned but for developers.
After the deadline, councils without CIL could find they have no power to raise funds for infrastructure projects. The regulations and government guidance on this are a little complex and could do with some clarification, but essentially councils will only be able to pool up to five contributions to an infrastructure project. This applies to all contributions since 2010. So, a council that has, for example, already collected contributions from five developments for a new school can collect no more funds in that way.
Does this simply mean reduced Section 106 costs for developers in areas that don’t have CIL? Possibly, but what happens if infrastructure essential for a development to proceed can’t be funded? There are perhaps three possibilities:
- The council could refuse permission for the reason that the needs arising from the development cannot be met.
- The council could approve the development but if essential infrastructure can’t be funded, the permission could be unlawful and liable to challenge.
- The council could impose a Grampian condition (preventing a development from commencing until an item of infrastructure has been completed). In that case, it could put a halt to the development indefinitely or until the council concerned puts CIL in place.
So there are some real concerns here for both councils and developers. The Home Builders Federation is aware of these issues and sponsored a report by Savills a year ago, titled CIL: The Countdown to April 2015, which spelled out potential problems.
But for the moment, councils without CIL in place may lose the opportunity to obtain infrastructure contributions from development. And if there is no means of funding essential infrastructure, development could become unacceptable. This a major issue for our new secretary of state for communities and local government Greg Clark. Let’s find a way forward - and as soon as possible.
Mike Newton is a director at Boyer
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