Enhancing and engaging communities through developer contributions

The Community Infrastructure Levy (CIL) came into force on 6th April 2010 and has provided local authorities with the opportunity to charge a new levy on developments in order to raise money to fund improvements to local infrastructure. Just over 200 authorities in England and Wales have now published CIL plans for consultation.

To some extent, CIL will replace the existing s106 contributions that are made by developers. The rationale behind this is that s106 payments were tied to existing developments on a site-by-site basis, whereas CIL payments are paid into a general ‘infrastructure pot’ so that it can support the accumulative impacts of development across districts. The CIL legislation enables 15% of the levy to be passed back to the Town or Parish Council in a parished area, rising to 25% if they have a Neighbourhood Plan in place (capped at £100 per existing dwelling in the parish). This will give vital funds to local areas to provide for much needed infrastructure. Furthermore, as the local authority can spend up to 5% of CIL on the cost of administration this means that local authorities will have to decide and will be accountable for how the 70-80% remainder of CIL should be spent.

In most local authority areas, districts are choosing to have a prioritised infrastructure list, often called a Regulation 123 list. This identifies which projects should be funded first, giving local councils more power over infrastructure spending in their area. Some authorities are also looking at ways in which ensuring the money is spent more locally, particularly given that parished areas are legally allocated 15-25%, but unparished areas are not allocated any local funds at all. For many towns and parishes, the attraction of a greater CIL receipt on new development is pushing more and more down the road to producing a Neighbourhood Plan.

For developers, the need to engage with local communities is ever more important. Rather than s106 contributions often being decided with planning officers, as local authorities at all levels begin to see infrastructure monies come in, the ability for developers to start a conversation with councillors and Town/Parish Council’s about taking a more holistic view in the planning process is much greater. It can be clearly demonstrated to local decision-makers that new homes provide money for infrastructure and – rather than that being linked to a specific project in advance when the effects of development are not necessarily known – the local area will receive the monies and can choose how to spend them at a later date.

Through increased engagement, developers can demonstrate their commitment to a local area and be seen as a catalyst for positive change, inspiring supporters and helping provide for the long-term infrastructure needs of communities.

This article was written by Tristan Robinson, Account Manager at MPC.