A selection of images representing communities.
|Published||5 August 2008|
Housing and Planning minister Caroline Flint announced further details of the Government's plans for a groundbreaking Community Infrastructure Levy (CIL) today, which will support local communities by raising funding for new schools, hospitals, transport schemes, libraries, parks and leisure centres.
CIL will be in addition to Government funding and will empower local authorities to better support and unlock growth by levying a charge to help deliver the infrastructure needed to support the development of their area - helping to create more attractive places to live and work.
CIL will be discretionary for local authorities, increasing their flexibility to shape their communities and support growth. Crucially, the levy will also offer greater certainty to industry because charges will be consulted on, independently examined, and published in a local charging schedule. This will provide a step change from the existing system of lengthy negotiated agreements, creating transparency, fairness and certainty for the development industry, and ensuring that CIL levels stimulate, rather than choke development.
The Government will invite further views on the design of the levy through public consultation later this year. Today's announcement sets out important strands of policy, following discussions between Caroline Flint, developers and local government.
As a result of the progress made in developing a locally-led approach to funding sub-regional infrastructure, the Government has decided that the powers for Welsh Ministers and the Secretary of State to charge CIL are no longer required.
Caroline Flint said:
"Almost all development creates some need for infrastructure and services so it is only right that development contributes a fair share alongside the billions of pounds of investment the Government is putting in.
"CIL will provide vital additional funding for the new infrastructure our communities need, helping them to grow in a sustainable way.
"Developers need as much certainty as possible given the current challenges they face from the international credit crunch, which is why I have been working closely with the industry and local government to ensure that CIL will deliver what is needed whilst giving more certainty and confidence compared to the current system."
There will also be improvements to section 106 agreements, which are used to mitigate the impacts of development proposals and secure affordable housing in new developments. Currently 52% of permissions for new major residential development do not include a section 106 agreement.
Three new steps will help clarify how section 106 agreements can be used effectively and appropriately. Firstly, a new model s106 agreement will be produced in conjunction with the Law Society; secondly, a practitioners' forum will be established to share best practice and, thirdly, a new toolkit will help all councils accurately assess their affordable housing needs.
To help people improve their homes the Government is also removing the need for planning permission on small household extensions and improvements such as solar panels. And all householder applications for home improvements will be exempt from CIL.
1. The Community Infrastructure Levy Policy Document is published today and available here: www.communities.gov.uk/publications/planningandbuilding/communityinfrastructurelevy
2. Also published today:
Valuing Planning Obligations in England: Update Study for 2005-06
Common Starting Points for Section 106 Affordable Housing Negotiations
3. Government, in its 2007 Comprehensive Spending Review, increased its financial commitment to backing infrastructure. Indeed, infrastructure needs are sufficiently important that the Treasury will continue to prioritise infrastructure funding as it balances competing priorities for public funds, regardless of the potential of CIL. The scale of expenditure on infrastructure is huge. For example, the 2007 Comprehensive Spending Review provided increased investment over the next three years to support the needed infrastructure for housing:
4. This is on top of the increases in mainstream Government funding for public services infrastructure announced in the 2007 Comprehensive Spending Review. Annual spending on education is projected to rise by over £14.5bn by 2010-11; spending on the NHS by over £19bn; spending on transport by nearly £3.6bn; total spending on new housing of at least £8bn over the next three years and spending on local government by £2.6bn. This is a substantial public sector investment aimed at ensuring the sustainability of our communities over the coming years.
5. Estimates as to how much the CIL will raise depend heavily on the number of planning authorities who choose to take it up and the levels at which charges are set in each area. However, the Government believes that it has the potential to raise hundreds of millions of pounds per year of extra funding each year for infrastructure, on top of the public sector investment described above.
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