CIL Watch: First government-backed indexing figure published

News of the publication of the first government-backed annual bespoke index number for the purposes of calculating Community Infrastructure Levy (CIL) rates that are "responsive to market conditions" features in the latest CIL Watch update.

Infrastructure: new bespoke index published (pic: Getty)
Infrastructure: new bespoke index published (pic: Getty)

In June, regulations laid before parliament brought in a series of changes to developer contributions.

Among them was a revised approach to indexation of CIL. Levy charges are indexed to infrastructure costs, including construction material values, to take account of cost rises.

Some in the development sector had in the past complained that frequently changing indexation figures cause uncertainty around the level of their CIL charge.

Partly in response to these concerns, the Ministry of Housing, Communities and Local Government (MHCLG) said it wanted to link rates "more closely with the value of development".

Under the change, levy rates calculated from 1st January 2020 will be carried out using a bespoke annual index based on the Building Cost Information Service’s (BCIS’s) All-in Tender Prices Index, produced by the Royal Institution of Chartered Surveyors (RICS). 

This year’s index number is 334. It will be applied when councils calculate CIL liability using the government’s published mathematical formula.

According to RICS, the index has been published "for the purposes of keeping the levy rate responsive to market conditions."

It said that the index will be published on the fourth Monday in October each year.

Once published, RICS said, the index "will not normally be subject to revision."

"Should RICS feel it necessary to amend a published Index this will only be done with the agreement of MHCLG," the body said.

More details on the index can be found here. 

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