Housing Minister, Caroline Flint MP has launched the latest Communities and Local Government consultation paper on the Community Infrastructure Levy (CIL).

The levy is one of the key provisions in the forthcoming Planning Bill, which is currently before Parliament.

Regulations implementing CIL could be in force as soon as spring 2009 and local authorities will be "empowered but not required" to charge CIL on new development.

Nick Grace, head of planning at Savills in Nottingham, said: "Aside from the poor timing of what many will see as another reincarnation of development land tax in the current economic conditions, the consultation paper raises many more questions than it answers.

"Although the development industry would welcome a simpler, fairer more timely system of delivering local and sub-regional infrastructure, it is far from clear that this will be what CIL will achieve.

"There is a danger that local authorities will struggle to implement the system; that it will be open to legal challenge; that there will be a variety of practical issues which will only emerge over time; and that developers will find themselves facing significantly higher infrastructure costs."

Local authorities will apparently need to prepare charging schedules as part of their Local Development Framework and although not formally part of the development plan, these will be scrutinised through inquiry and will be subject to a binding inspector's report. If a local authority disagrees with the 'binding' report, it may submit revised proposals to a fresh inquiry.

The Government claims that it is seeking to introduce CIL in an attempt to provide increased clarity, fairness and speed. However, it appears unlikely that many local authorities will be in a position to implement CIL in spring 2009, even if they were to begin preparing immediately.

In terms of increased clarity, the introduction of CIL spells the demise of Kate Barker's suggested Planning Gain Supplement (PGS), but will continue to operate alongside Section 106 planning obligations and potentially, the Optional Planning Charge (OPC) where provisions still lurk in the Planning and Compulsory Purchase Act 2004.

The Government has drawn the definition of "infrastructure" quite widely and in addition to roads and bridges, it could include schools, sports facilities and open space. The Government's intention appears to be that planning obligations will continue to be used in the delivery of affordable housing.

There are tentative provisions for whole or partial exemptions or even payments in kind which further complicate the picture.

In terms of fairness, there are a number of areas where tensions could arise. Although there will be provision for geographical differences in land values, the charges will be set uniformly across local authority areas and not in relation to individual schemes. Tensions between local authorities may arise where one opts in and one opts out, but they are both reliant on common infrastructure to deliver their Local Development Framework Proposals.

As with Planning Gain Supplement , there appears to be a danger that in areas where viability is already marginal, development activity may be further slowed and regeneration attempts fettered. Although the paper makes clear that CIL will not be used to fund existing deficiencies, this will inevitably be tested through the Courts.

There are proposals for a right of appeal, but only where the CIL may have been miscalculated. Time will tell whether this results in a spate of appeals hitting an already pressured Planning Inspectorate.

Finally, will CIL deliver infrastructure more quickly?

The administration of CIL is not made clear in the consultation paper - particularly at sub-regional level. It appears that the burden will fall upon local authorities. The Government is making money available via the housing element of Planning Delivery Grant (PDG) and the recent uplift in planning fees.

However, it also identifies that there is already a chronic shortage of local authority planners.

Local authorities will only be able to introduce CIL where they have an up-to-date plan and "satisfactory infrastructure planning".

Source: Nottingham Evening Post

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