The Community Infrastructure Levy (CIL) is a tariff charged by local councils which allows funds to be raised from new developments towards the cost of infrastructure to support development of the area. Havant has just announced its proposed new charges which are at least 50% higher for most developments.
What is CIL and Section 106?
In the past, councils secured developer contributions through the use of Section 106 (S106) planning obligations. In April 2010 the government introduced CIL with the intention that it might replace S106 Agreements. However, S106 contributions may be sought in addition to CIL where site specific measures are required to make a development acceptable. This could include such items as specific highway or flood alleviation measures. Since Havant implemented a CIL Charging Schedule in 2013, any S106 agreements need to meet the three tests set out in the CIL Regulations 2010 (as amended):
What is changing?
Havant has charged CIL based on the type, size and location of developments. CIL has always been higher for residential developments in Emsworth and Hayling than in the rest of the Borough, presumably to encourage / discourage developments in certain areas. The new proposal identifies Southleigh as a 'strategic site' and any new residential development there will not be charged CIL as this is obviously where development is being encouraged.
An average house is 70 square metres, the CIL charge for such new house on Hayling has gone up from £7,000 (charged at £100 per square metre) to £10,430 (new proposed charge is £149 per square metre). In the grand scheme of things, if you are building a new house, an extra £3,500 CIL charge is not going to make a great deal of difference and if that affects the viability of the development, it ought to be reflected in the land value – meaning the property developer ought to be paying less for the land, knowing that his or her business case still needs to work with this new charging rate.
From the other side, a 50% increase in CIL income for Havant ought to allow the council to provide more infrastructure and on larger developments it could be a significant contributor.
Havant's current CIL schedule can be seen here:https://cdn.havant.gov.uk/public/documents/Developer%20contributions%20guide%20-%20April%202021.pdf
Detail of the proposed changes from a Havant Borough Council email:
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