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Review of British development tax welcomed by property industry

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The British property industry has welcomed a government review of one of the country’s biggest bugbears in the planning system.
According to the Property Federation (BPF) the relook at the Community Infrastructure Levy (CIL), a development tax which is used to fund local infrastructure, is long overdue.

The organisation, which is supportive of CIL in principle, has long advocated a review of the tax and says that it has become overly burdensome and inefficient.

The BPF says that the review must not be the end of the story. In some cases, the evidence base used for the initial CIL setting is now fully out of date, and not fit for purpose. It is crucial that local authorities are encouraged to regularly review their own charging schedules against market signals and to test them against ‘real life’ projects that reflect market conditions.

It pointed out that CIL simply does not work for complex or large scale strategic sites, and a more site specific and targeted approach to infrastructure funding and other contributions must be taken.

It also wants to see clarity between CIL and s106. A fundamental premise of CIL was that it would be used to fund a set of identified infrastructure requirements, whilst s106 obligations should relate only to site specific mitigations and affordable housing provision.

However, in reality, this has not happened, and there is considerable overlap between the two. This fundamental issue must be addressed and clarity provided in order for CIL charge setting to be at the right level and to make the process work properly.

It is also calling for the integration of CIL with local plans. There is a disconnect between the preparation of local plans and the formulation of CIL charging schedules, which local authorities should prepare in tandem, in conformity with the National Planning Policy Framework. It is critical that emphasis is placed on delivery of infrastructure, rather than just revenue collection, it adds.

‘Many of our members cite CIL as one of the biggest bugbears of the planning system, and there are plenty local authorities who would agree. Whilst some would like to see it abolished altogether, we believe that with the right changes, CIL could be a useful tool for ensuring infrastructure delivery on development sites,’ said Melanie Leech, chief executive of the British Property Federation.

‘The creation of this group is a step in the right direction, but it must not stop here. It is crucial that Government take any recommendations on board, and works with both public and private sectors to ensure that the regime really works in the future,’ she explained.

‘CIL was supposed to provide a quicker, fairer and more efficient way of delivering infrastructure to support development and our members have always supported this principle, but we are concerned that in many places it is not working. We look forward to engaging with the review panel to ensure that CIL becomes less of a burden and more beneficial,’ she added.

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