So, the Levelling-up and Regeneration Bill came out at last (hooray!) Predictably enough, I turned first to the sections on the ‘new’ Infrastructure Levy (IL). These are contained in Sections 113-115 of the Bill and in Schedule 11. Having now read these, I am left with the distinct feeling of ‘deja vu’ and I have reached the conclusion that CIL must be so amazingly good that the Government had to invent it twice! I will elaborate…
Infrastructure Levy v Community Infrastructure Levy
First, the effect of Section 115 of the Bill is important as it does not kill off CIL but only limits its future use to Wales and interestingly to Greater London – i.e. the Mayoral CIL may well endure. This could in future be expected to exist alongside the use of the ‘new’ Infrastructure Levy by the London Boroughs. At least, that is my best guess as it would be very odd indeed if there is no use of IL at all in London and CIL is retained at both tiers, whilst the rest of England changes to IL!
On the more detailed provisions contained within Schedule 11, it is important to understand that the IL provisions are intended to be ‘skeletal legislation’. I.e. they simply provide the bare framework for later regulations which will cover the details. Therefore, you will see many, many examples of the phrase: “the IL regulations may do x or y” and very few phrased “the regulations must…” So, in reality there is very little detail and an awful lot of work for the Government to do that could, over time, shape the IL somewhat differently to CIL.
So, back to the ‘deja vu’… If you read Schedule 11 of the Bill you can certainly be forgiven for thinking you are reading Part 11 of the Planning Act 2008 – try a comparison, I dare you! It’s almost identical – spot the difference!! So, is that it? Is there almost nothing in the draft primary legislation for IL that is different from the primary legislation that established CIL back in the bleak ‘credit crunch’ days of 2008? Surely there must be differences, or else what on earth was the point?
Well, no, there are very few differences really. IL will still be a charge on development set by individual charging authorities through issuing charging schedules. These will be drawn up taking account of appropriate available evidence (including viability evidence), and are likely to be consulted on before being finalised. They will be examined by an independent person. The charge will still be non-negotiable and the funding raised will still need to be spent on infrastructure to support the development of the area. Is this sounding familiar so far…? Oh, and there is still a mandatory exemption for charities, but interestingly not for ‘social housing’ although that of course could come through the regulations.
So, are there any changes? Well, of course, there are a few and this is my (very brief) summary of the three main differences I spotted:
- There is a provision for the regulations to require charging authorities to ensure that overall developer contributions and affordable housing secured through IL, over a set period, will be equal to or greater than the level of funding and affordable housing achieved before IL was introduced. So clever Mr Gove has ensured that IL will after all raise more than CIL and s106 combined just like he promised…right? Well, perhaps in some higher value areas, but what about in areas of lower values where delivering affordable housing and funding for infrastructure is already very challenging? This provision raises many interesting and potentially concerning issues for the viability of development across England. We will need to watch the regulations on this one very carefully.
- There is a provision for the Secretary of State to require charging authorities (i.e. any local planning authority in England) to issue a charging schedule by a set date. If regulations do take this forward (and it is a ‘may’ not a ‘must’) it will essentially make charging IL compulsory for local authorities. This is certainly consistent with the Government’s aspirations for a universal charge on development, but it is troubling when one considers the number of areas in England that have never introduced CIL due to the adverse impact it would have on the viability of development in the area. When this provision is viewed in combination with number 1., this could be very challenging to implement.
- Infrastructure delivery strategies (IDSs) will become a new statutory planning document. An IDS will need to be produced by the charging authority in support of the introduction of IL. The IDS will be subjected to a specific independent examination procedure, either alongside the examination of IL or of the local plan. The IDS will need to set out the charging authority’s ‘strategic plans’ in relation to the application of IL, which is likely to include the plans for the delivery, improvement and maintenance of infrastructure in the area for the period the charging schedule is intended to be in effect.
So that’s about it really. I am sure that on closer examination, there will be some points that can be added to the list but if so, these are well hidden! I do stress once again that this is early days in the naissance of IL and there is plenty of scope for real differences between the infant (IL) and its parent (CIL) to emerge over the passage of the Bill and the subsequent development of the regulations. Nevertheless, as someone who was involved in the creation of CIL back in 2009 to 2011, there is some (albeit self-indulgent) pride taken from the fact that, in spite of several years of looking for a better framework, the Government has decided that the essential architecture of CIL will endure.
If you have any queries on the infrastructure levy please contact a member of the Planning team.