2 General Principles of CIL

What is CIL?

2.1 CIL is a locally set charge on new development that authorities can choose to introduce across their area.  It is based on the size and type of development and once set in an area is mandatory to pay and non-negotiable.  The funds raised must be used to provide infrastructure which is required to support new development across the area.

What are the benefits of CIL?

2.2 CIL provides a simpler and more transparent process than the collection of funds and provision of infrastructure under Section 106 procedures.  The Government suggests there are a range of benefits when local authorities introduce the levy.  These include:

• CIL collects contributions from a wider range of developments, providing additional funding to allow local authorities to carry out a range of infrastructure projects that not only support growth but benefit the local community;
• CIL gives authorities greater flexibility to set their own priorities on projects benefitting the wider community affected by development, unlike Section 106 funds which require a direct link between a contributing development and an infrastructure project;
• CIL provides developers with clarity about the level of contributions which are required from any development and provides transparency for local people;
• CIL is non-negotiable and therefore should save time by removing the need for negotiations between the local authority and developers as occurs with Section 106;
• CIL is fair as it relates the contribution to the size of the development in terms of new floorspace;
• Parishes where development takes places will receive their own meaningful portion of the CIL to spend on the infrastructure they want.  In areas where there is no Neighbourhood Plan this will be 15%, capped at £100 per existing dwelling.  Where a Neighbourhood Plan is in place the portion is an uncapped 25% as a government incentive to accept development through a Neighbourhood Plan.  Unlike the Councils CIL receipts, the Parish Council's meaningful proportion is not tied to Regulation 123 and does not have to be spent in consultation with Brentwood Borough Council.  However Parish Councils do have to spend the meaningful proportion in line with the following CIL regulations:

1. "The provision, improvement, replacement, operation or maintenance of infrastructure; or;
2. Anything else concerned with addressing the demands that development places on an area" (Regulation 59C)

What development will be liable for CIL?

2.3 Most buildings that people normally use are potentially liable to pay the levy, whether the proposal is for a new building or an extension which results in 100 square metres or more of net increase in gross internal floor space.  Development which is less than 100 square metres but which involves the creation of an additional dwelling will be liable.  The conversion of a building that has not been in use for some time will also be liable for the levy.

Are there any exemptions from CIL?

2.4 The CIL Regulations outline that some development will not be subject to a charge:

• Development by registered charities for the delivery of charitable purposes;
• Those parts of a development which are to be used as affordable housing;
• The conversion of any building previously used as a dwelling to two or more dwellings providing there is no increase in floor area;
• Buildings into which people do not normally go, buildings which people only enter intermittently for the purposes of inspection or maintenance, and structures which are not buildings, such as pylons; and
• Changes of use which do not involve an increase in floorspace.

Discretionary relief from CIL

2.5 The CIL Regulations state that discretionary relief can be made available for charitable investment if the charging authority chooses to make it available in its area and publishes a local policy.  To be considered for relief, the whole or greater part of the chargeable development must be held as an investment from which the profits will be applied for charitable purposes.

2.6 The CIL Regulations also state that discretionary relief can be made available for 'exceptional circumstances'.  However, relief can only be given where the following eligibility criteria set out in the Regulations are fulfilled:

• The claimant owns a material interest in the land;
• A Section 106 planning obligation has been entered into in respect of the planning permission which permits the chargeable development; and
• The charging authority considers that:
• The cost of complying with the Section 106 agreement is greater than the charge from the levy payable on the chargeable development;
• Requiring payment of the charge would have an unacceptable impact on the economic viability of the chargeable development; and
• Granting relief would not constitute a notifiable State Aid.

2.7 Brentwood Borough Council has sought to use the evidence it has commissioned on the viability of development proposed in the Draft Local Plan in order to set CIL rates which will be affordable for the development needed to deliver the Plan.  Accordingly, the Council does not propose to make discretionary relief available for exceptional circumstances.

What is the relationship between CIL and other planning obligations?

2.8 The use of Section 106 planning obligations has been scaled back by the Government to ensure there is no overlap between obligations and CIL. 

2.9 The CIL Regulations introduced three main restrictions to planning obligations:

• Regulation 122 – a planning obligation must comply with the three statutory tests, requiring the obligation to:

1. be necessary to make the development acceptable in planning terms;
2. be directly related to the development; and
3. be fairly and reasonably related in scale and kind to the development.

• Regulation 123(2) – a planning obligation must not provide for the funding or provision of 'relevant infrastructure' which is any type of infrastructure or any project of infrastructure which appears in the authority's Regulation 123 list of infrastructure.  Any infrastructure entry on the list may be funded in part or exclusively from CIL receipts but there is no obligation on the authority.
• Regulation 123(3) – a planning obligation must not infringe the pooling restriction in Regulation 123(3). This restriction now applies in all areas regardless as to whether CIL has been introduced.  A planning obligation cannot be imposed if there has since 6 April 2010 been five or more planning obligations entered into with the authority providing for the provision or funding of the same infrastructure project or type of infrastructure.

2.10 Pooling of obligations from more than five schemes has been restricted since April 2015.  This is because CIL is intended to take over the collection and pooling of funds to deal with the cumulative demands on infrastructure caused by development across the Borough.

2.11 However, there may be some site-specific infrastructure requirements without which planning permission should not be granted.  Some of these needs may be provided with levy funds but some may be very local or specific, perhaps arising only from one or a small group of major developments in an area, such as the proposed Dunton Hills Garden Village in the Draft Local Plan.  For this reason, while planning obligations have been scaled back, they have not been abolished.

2.12 As noted above, to safeguard developers, authorities cannot charge for the same items through both planning obligations and CIL.  Under CIL Regulation 123, they should show which items or types will not be subject to planning obligations by publishing a list of infrastructure projects or types they intend will be or may be funded by CIL.  The 'Regulation 123 list' is presented as supporting evidence when the CIL charging schedule is examined, but it is not part of the charging schedule as it can be reviewed and changed independently of it.

2.13 The Council is in the process of preparing its Regulation 123 list.  This will be made available for consultation alongside the emerging Infrastructure Delivery Plan (IDP) at the next stage of the CIL process; publication of the Draft Charging Schedule for consultation.

Who is liable for the payment of CIL?

2.14 The regulations state the registered owner of the land is liable to pay CIL, unless another party claims liability and declares this to the Council. On adoption of CIL the Council intends to incorporate a section for this into the application. For example a developer may have a contract with the land owner to develop a site and therefore declare they are liable for the CIL payment on the owner's behalf. The regulations and governments intention is that those who benefit financially when planning permission is granted should share some of that gain with the community. That benefit is also transferred when the land is sold with planning permission, which also runs with the land. The CIL can also be paid to the Council 'in kind' through the transfer of land or the provision of infrastructure, however this will be at the Councils discretion and will be tested on a case by case basis.

When is CIL payable?

2.15 Liability to pay CIL is triggered by commencement of the development.  By default it must be paid within 60 days, but for schemes with phased outline permission payment will be triggered separately for each phase.  In addition, authorities can set their own policies allowing all large liabilities to be paid by instalments.  To implement this, the Council would be required to publish an instalment policy on its website.  Such a policy would not be part of the charging schedule and could be changed independently of it.  By law, an instalment policy would apply to all developments and could contain only the following:

• The number of instalment payments;
• The amount or proportion of CIL payable in any instalment;
• The time from commencement by which the first and subsequent instalment must be paid; and
• Any minimum amount of CIL below which CIL may not be paid by instalment.

2.16 The Council is considering introducing an instalment policy and is seeking views on the above points (see chapter 3 and consultation questions).

Relationship with the Infrastructure Delivery Plan

2.17 The Infrastructure Delivery Plan (IDP) accompanies the Council's emerging Local Plan.  It considers a range of infrastructure groups and establishes an existing infrastructure baseline. It appraises what infrastructure is required to support new development and the extent to which each is a constraint to the delivery of the Local Plan.

2.18 Where possible it identifies the cost and delivery route for new infrastructure and whether the infrastructure is critical to the delivery of the Spatial Strategy and Strategic Objectives.

2.19 An update note on progress made on the IDP has been published along with this consultation document.  Following the completion of new evidence on highways infrastructure and leisure facilities, the first Full Draft of the IDP will be available for consideration alongside the publication of the next stage of the CIL process (Draft Charging Schedule) in January 2017.  For more information please see www.brentwood.gov.uk/CIL.

Evidence Base

Initial Analysis 2013

2.20 In 2013 Nationwide CIL Services (NCS) were commissioned to run the production of CIL in conjunction with the Council's Planning Policy Team. 

2.21 The majority of the work involved preparing the evidence base was completed in late 2013.  Work on CIL was temporarily stopped in September 2014.  This was due to the work on the Local Plan being revaluated in terms of requirements to meet full Objectively Assessed Needs.  Work could not progress on CIL until the strategy and preferred sites were established.

2.22 The evidence documents that were produced in 2013 were published on the Council's website.  Evidence included a viability assessment, land and property value appraisal, and viability construction cost study.  These documents are available to view online using the Council's Document Library.

Key Headlines 2013

2.23 Key headlines from CIL evidence produced in 2013 are summarised below:

• For residential development studies concluded that variations in the values of residential development were not significant enough to warrant differential assumptions being applied to different geographical locations in the study area and that a single value zone approach was appropriate;
• A rate of £130 per square metre for residential development was recommended;
• For non-residential development a single zone approach was also recommended;
• Commercial developments (excluding retail) were not considered to be viable in Brentwood for the application of CIL charging;
• Food Supermarket and general retail were assessed to be viable and capable of accommodating CIL in both greenfield and brownfield development scenarios.  A rate of £80 per square metre for retail A1-A5 uses was recommended; and
• For all other non-residential uses a rate of £0 per square metre was recommended.

New Analysis 2016

2.24 Due to the period of time that had passed since evidence was produced in 2013, it was deemed appropriate to renew studies and provide an up-to-date and robust basis for the Preliminary Draft Charging Schedule.

2.25 NCS have produced new evidence to assess viability and delivery.  The assessment appraises the viability of the Brentwood Draft Local Plan in terms of policies on the economic viability of development expected to be delivered during the Plan period (2013-2033).  The study considers policies that might affect the cost and value of development in addition to the potential to accommodate CIL charges.  The study also includes an assessment of the ability of different categories of development within the Local Plan area to make infrastructure contributions via CIL.

2.26 The documents that have been produced by NCS and partners in 2016 are listed below.  These can be viewed on the Council's website at www.brentwood.gov.uk/CIL as well as the Document Library. Links are also provided below as part of this consultation document:

• Whole Plan and CIL Viability Assessment, Nationwide CIL Services (May 2016)
• CIL Land and Property Value Appraisal Study, heb Chartered Surveyors (April 2016)
• CIL Viability Construction Cost Study for Brentwood Borough, Nationwide CIL Services and Gleeds (March 2016)

Key headlines 2016

2.27 Key headlines from CIL evidence produced in 2016 are summarised below:

• As was concluded in 2013 evidence, a single value zone for residential development was considered appropriate;
• The recommended rate for residential development has increased to £200 per square metre;
• For non-residential development a single charging zone was recommended;
• A zero rate for all non-residential development excluding retail was recommended; and
• Two further rates were recommended for General Retail A1-A5 (excluding food supermarkets) at £125 per square metre and for food supermarkets a rate of £200 per square metre.