Community Infrastructure Levy (CIL)

[estimated] Ended on the 8 September 2014

Section 1 Introduction

1.1 This document is a consultation document issued as the first step in setting the Southend-on-Sea Community Infrastructure Levy (CIL). It contains the proposed CIL charging schedule and explains the general principles of CIL, and the method used to arrive at the proposed charging rates.

What is CIL?

1.2 The Community Infrastructure Levy Regulations 2010 ("the CIL regulations") came into force on 6 May 2010 and set out how CIL is to be introduced into an area. Subsequently, amendment regulations came into force in February 2011, November 2012, April 2013 and February 2014.

1.3 The CIL (as set out in the Planning Act 2008) allows local authorities to raise funds from new local development to make a financial contribution towards the infrastructure needed as a result of that development. The Council will use CIL alongside a range of other funding to continue to invest in a portfolio of infrastructure projects that are vital to delivery of the Local Plan.

1.4 Most development will have an impact on infrastructure needs within an area in some way or another. Whether it is on education, utilities, community facilities, health, transport, open space or anything else. Without improvements and/or new provision, additional development could place undue pressure on existing facilities and services. Therefore, it is reasonable that development should partly contribute towards these costs as part of a complex blend of funding including Local Government Grants and Council Capital Funding.

What developments are liable for CIL?

1.5 The levy may be payable on development which creates net additional floor space, where the gross internal area of new build exceeds 100 square metres (hence, CIL will not be payable on most householder extensions). This limit does not apply to new houses or flats, and a charge can be levied on a single house or flat of any size, unless it is built by a 'self builder'. The following do not pay the levy:

  • development of less than 100 square metres (see Regulation 42 on Minor Development Exemptions) - unless this is a whole house, in which case the levy is payable
  • houses, flats, residential annexes and residential extensions which are built by 'self builders' (see Regulations 42A, 42B, 54A and 54B, inserted by the 2014 Regulations)
  • social housing that meets the relief criteria set out in Regulation 49 or 49A (as amended by the 2014 Regulations)
  • charitable development that meets the relief criteria set out in Regulations 43 to 48
  • buildings into which people do not normally go (see Regulation 5(2))
  • buildings into which people go only intermittently for the purpose of inspecting or maintaining fixed plant or machinery (see Regulation 5(2))
  • structures which are not buildings, such as pylons and wind turbines
  • specified types of development which the Council has decided should be subject to a 'zero' rate based on local viability evidence, and specified as such in this charging schedule
  • vacant buildings brought back into the same use (see Regulation 40 as amended by the 2014 Regulations)

1.6 Where the levy liability is calculated to be less than £50, the chargeable amount is deemed to be zero so no levy is due.

1.7 Mezzanine floors of less than 200 square metres, inserted into an existing building, are not liable for the levy unless they form part of a wider planning permission that seeks to provide other works as well.

1.8 The levy is charged on new development. Normally, this requires planning permission from the local planning authority, the Planning Inspectorate, or the Secretary of State on appeal. However, some developments not requiring planning permission (permitted development) will also be liable for CIL if they do not fall into the exemption criteria above (see related guidance on the General Permitted Development Order here: ).

1.9 Where a planning permission is phased, each phase of the development is treated as if it were a separate chargeable development for levy purposes (see Regulation 8(3A) as amended by 2014 Regulations).

Setting CIL rates

1.10 The level of CIL payable will not be negotiable and is set by the charging schedule.

1.11 In the proposed CIL rates the Council has sought to strike an appropriate balance between the need for CIL to fund the infrastructure necessary to support the development of Southend, taking into account other actual and expected sources of funding; and the potential effects of the imposition of CIL on the economic viability of development across the area. In this context, the Council has taken full account of the findings of the Viability Study (see Section 2), which includes the local policy requirement for affordable housing.

What can CIL be spent on?

1.12 In accordance with Community Infrastructure Levy Regulation 59, the Council can spend CIL on "the provision, improvement, replacement, operation or maintenance of infrastructure to support the development of its area". Infrastructure could be physical (e.g. roads); it could be green (e.g. open spaces) or it could be social (e.g. schools, community buildings). It can be used to pay for strategic infrastructure serving a wide area or it could be localised infrastructure to help reduce the impact of new development on the immediate locality. Any on-going maintenance or operational costs must be directly related to the additional demands arising from new development. The Council can also retain up to 5% per annum of CIL receipts to meet upfront and continuing costs of preparing and implementing a CIL.

1.13 A capped 15% proportion of CIL revenue will need to be spent on locally determined infrastructure in areas where development takes place. This will rise to 25% for those areas with an adopted neighbourhood plan in place. In Parished areas (e.g. Leigh Town Council), the relevant proportion of CIL will be passed to Parish/Town Councils. In non-Parished areas, the Council will engage with the relevant communities to determine how CIL is spent, with consultation at the Ward level providing the starting point for establishing priorities.

1.14 The governance and prioritisation of future CIL spend is the responsibility of the charging authority (Southend Borough Council). However, in practice (and in line with statutory guidance) the prioritisation of projects will need to be undertaken in partnership with other infrastructure providers including Essex County Council (e.g. projects relation to A127/A13 will involve ECC). During the CIL consultation and adoption process the Council will consider further what governance arrangements need to be put in place to guide this process.

What happens to planning obligations (Section 106 agreements)?

1.15 CIL spending is not restricted in the same way as Section 106 (s.106) planning obligations. CIL breaks the link between the development and the development site, and can be spent more flexibly to allow infrastructure to benefit from funds collected from any number of developments.

1.16 Even after CIL is in place, site specific impact mitigation may still be necessary in order for a development to be granted planning permission, and this will continue to be secured through Section 106 agreements, Section 278 agreements or planning conditions (in addition to levy payments). However, to some extent CIL replaces planning obligations. From April 2015, or once a CIL charging schedule is adopted, whichever is sooner, it will not be possible for a local authority to enter into s.106 planning obligations that pool together developer contributions from more than five schemes for any particular infrastructure item (e.g. s.106 contributions towards education or public transport provision have previously been used in an aggregate manner in order to address cumulative impacts arising from a number of developments).

1.17 To ensure that local authorities do not charge twice by seeking contributions through s.106, s.278 and CIL, CIL Regulation 123 states that planning obligations cannot be entered into where it would fund or provide relevant infrastructure listed on the Council's website that may be funded through CIL. The potential infrastructure projects that CIL will contribute funding to will be set out in what is referred to as the 'Regulation 123 Infrastructure List' and a planning obligation will not be sought for any item of infrastructure included in this list.

1.18 Appendix 3 includes a draft Regulation 123 Infrastructure List as part of this consultation, which is based on the infrastructure projects and priorities outlined in the Infrastructure Delivery Plan (see Section 2 below for further details). The Council will publish a more specific Regulation 123 Infrastructure List at Draft Charging Schedule consultation stage and a final Regulation 123 Infrastructure List once a CIL charging schedule has been adopted. In addition, at Draft Charging Schedule consultation stage the Council will publish a revised version of the Council's Planning Obligations Supplementary Planning Document (SPD2) in order that it is made clear what the Council's infrastructure needs and priorities are, and the route through which developers will be expected to contribute to the costs of this infrastructure (i.e. planning obligation/s.106 or CIL).

1.19 The development appraisals forming part of the Viability Study (as summarised in Section 2 below) supporting Southend's proposed CIL have factored in an allowance of £1,012 per residential unit to address any s.106/s.278 costs of site mitigation. As affordable housing (required by Core Strategy policy CP8) will continue to be secured by planning obligations, this requirement has also been factored into the appraisals. These assumptions are reflected in the proposed levy charge rates.

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