CIL Watch: Few councils use their power to exempt 'unviable' schemes from CIL, research finds

Norwich City Council has introduced a new policy allowing it to exempt some developments from the Community Infrastructure Levy (CIL) if the charge causes them to become unviable.

Norwich City Hall (Pic: Evelyn Simak)
Norwich City Hall (Pic: Evelyn Simak)

At a meeting of the full council last week, members voted to approve what it calls an "exceptional circumstances relief" policy to its CIL charge, which was introduced in July 2013. Research by council officers found that, though about half of CIL charging authorities had introduced such a policy, only a handful had actually applied it.

A report by officers for the meeting states: "Since the introduction of CIL, the council has become aware of a small number of pipeline developments sites with complex issues that may be unviable if they are required to pay CIL in full." It said the exceptions policy "would allow the council to determine, on a case by case basis, whether there is a justification for setting aside the CIL requirement in such cases".

The report goes on to say that the government's CIL Regulations 55 to 58 "allow CIL charging authorities to set discretionary relief for exceptional circumstances". This would apply "where individual sites with specific and exceptional cost burdens would not be viable due to the payment of the CIL charge". The council would have to be satisfied that CIL payment "would have an unacceptable impact of the economic viability of the development", it adds. The CIL Regulations make clear that relief can only be granted where there are "exceptional circumstances" which justify doing so, and where the council considers it "expedient" to do so. Applicants for relief "must submit a viability report prepared by a suitably qualified professional approved by the council", it adds.

After carrying out research, officers from the council established that 41 local planning authorities had introduced an ECR policy, "around half" of the CIL charging authorities they examined. But they found only three examples where the policy had been applied - Taunton Deane and West Somerset councils jointly (for a 100 per cent affordable housing scheme); Weymouth and Portland Borough Council (for a mixed-use scheme including 53 homes on a regeneration site with "severe viability issues"); and the Royal Borough of Kingston upon Thames for the redevelopment of the Eden Walk shopping centre. A further two councils were considering applying the policy for proposed schemes and one more had refused an application for relief, officers found. [The officers found that such relief policies appeared to be "more commonly found in urban areas than rural ones".]

Officers said they expected the number of developments to come forward without paying CIL, or paying at a reduced level, to be "relatively few". Between its introduction in July 2013 and the end of March 2018, the report adds that the city council has collected a total of £2.5 million in CIL receipts.

CIL UPDATES

Consultation:

London: the London Borough of Redbridge is consulting on a new preliminary draft charging schedule, having introduced a CIL in 2012. The draft schedule, which is out to consultation until Wednesday 16 January 2019, proposes rates of up to £175 per square metre for housing development.

London: the London Borough of Lambeth is consulting on a new preliminary draft charging schedule, having introduced a CIL in 2014. The draft schedule, which is out to consultation until Monday 17 December, proposes rates of up to £500 per square metre for housing development.

London: the London Borough of Tower Hamlets is consulting on a new draft CIL charging schedule, having introduced a CIL in 2015. The draft schedule, which is out to consultation until Thursday 10 January 2019, proposes rates of up to £280 per square metre for housing development.


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