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  • Writer's pictureDAC Planning Team

To CIL or to IL, That is the Question

Updated: Jan 9

Two paved roads diverging in a forest

Following the Levelling Up and Regeneration Bill receiving royal assent, proposals for the introduction of a national Infrastructure Levy (IL) are now enshrined in law and therefore feel much more real. Local authorities that were previously considering the introduction of a Community Infrastructure Levy (CIL) may now be considering if they should continue to progress with a CIL or await the impending IL.


DAC Planning Associate Director Tim Parton has some recommendations for local authorities grappling with this decision.

 

Background

Back in March 2023 the Government published a technical consultation on the proposed national IL. The Levelling Up and Regeneration Bill (LURB) provided the framework for replacing the current system of developer contributions with the mandatory IL, and the LURB received royal assent on the 26th October. Through these changes the Government is seeking to establish a more simple and streamlined approach to obtaining developer contributions which would be more transparent for local communities.


To ease the transition to the new system, it is proposed that the Levy will be introduced in a representative minority of local authorities in the first instance using a ‘test and learn’ approach starting in late 2024/25. The Government anticipates that the IL will then be fully rolled out nationally over the following decade, however the timescales for individual areas will vary depending on existing local circumstances, the outcomes of the testing and learning stage, and the Governments approach to rolling out the Levy.


See our Briefing Note on the emerging IL proposals.

 

 

Is it worth waiting for the IL?  


Short answer = No 


The IL will be introduced through regulations which are expected to come forward next year. The Levy is then proposed to be rolled out in stages starting with a ‘test and learn’ process which will take a number of years from late 2024/2025 onwards, resulting in the Levy not being fully in place throughout England until around 2034/2035. For authorities interested in creating a levy now, it could potentially be a long wait before the IL is rolled out within their area. If a CIL Charging Schedule were to be adopted and brought into force next year, an authority could potentially be collecting funds for up to ten years before the IL may be rolled out in their area. This could allow for the collection of a significant amount of CIL funds during this period.  

 

Will bringing in a CIL now be confusing to people expecting the IL?


Short answer = No 


Given the current uncertainty relating to when relevant regulations will come forward (it could be August 2024, it could be later) and when the Levy will be rolled out in specific areas (sometime between late 2024 and the next decade), having a CIL in place by next year could offer greater certainty to developers and infrastructure providers on how an authority will be seeking, managing, and using developer contributions in the coming years during this period of systemic changes. This will provide clarity by introducing a Levy system within timescales which can be identified now, and will be likely to make the transition from a CIL to the IL much easier for people to understand.  

 

Is it worth setting up a CIL now, when this will inevitably have to be changed to the IL?


Short answer = Yes, it should make setting up the IL easier.


To facilitate the introduction of the IL, it is likely that it will be easier to convert an existing CIL Charging Schedule and associated established processes and systems to the IL, rather than starting from scratch. By bringing in a CIL now, authorities can be equipped with the necessary governance, infrastructure spending, prioritising, charging processes and administrative arrangements at the earliest stage possible. The introduction of a CIL now would therefore enable all required mechanisms to be set up, well in advance of any mandatory implementation of the IL.

 

Conclusion – Should authorities continue to progress a CIL in advance of the IL?


Short answer = Yes, go for it.


While the regulations and supporting guidance for the IL are being developed, and while the roll out approach is being tested and finessed, there are clear benefits to continuing to bring forward a CIL now.


 

How we can help

DAC Planning provides specialist support in infrastructure planning.

For a discussion on how we can assist you, please get in touch with the team:

admin@dacplanning.com / 01206 259281


This information is for general informative purposes only. Whilst every effort has been made to ensure its accuracy, DAC Planning accepts no liability whatsoever for any direct or consequential loss arising from its use.

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