Community Infrastructure Levy (CIL)

CIL is a levy that recognises a more generalised need for development to be supported by infrastructure and is set up as a mechanism to capture the value uplift gained from a planning permission to reinvest in infrastructure. CIL is calculated on floorspace therefore this is of particular concern for specialist housing due to the large areas given over to communal space and not actually generating revenue. Charitable institutions who own a material interest in the land will get full relief

A council will need to have an adopted 'Charging Schedule' which sets out how much per Sq.m it will charge towards various infrastructure elements. These will then be applied across the board on new development. Affordable Housing is still a CIL chargeable development but it is just exempt from paying.

Some Authorities have separate class for specialist housing (opens new window), whilst others classify it as C3 residential and apply the same charges as residential. It is important to check the full wording of the charging schedules when published, especially when considering extra care housing proposals, as each Council take a different approach to the charging for extra care housing and care homes.

Clearly the adoption of CIL has an impact on development viability if applicable to specialist housing developments. A recent example of a Council seeking to impose a specific charge on care schemes is Wiltshire Council where the Inspector's report was published in March 2015. In this example, the Council sought a charge of £85 per sq.m on all residential development under the C2/C2a/C3 and C4 classes. Representations were submitted on behalf of operators to challenge this proposed rate due to concerns over viability; however, the Council challenged this and the Inspector concluded that the proposed charge would not impact on viability.

The key lesson to learn from this approach is that the Council's viability was based on the minimum floorspace requirements for a Care Home development as set out within the National Care Standards, as opposed to the respondents using a typical Care Home development providing a wide range of communal facilities.

The highest charge for a C2 development is currently set at £500 per sq.m plus the Mayoral CIL within the London Borough of Camden (specifically within the Highgate and Hampstead areas) for care homes with a degree of self-containment.

It should be noted that under Regulation 7(5) of the Community Infrastructure Levy (Amendment) Regulations 2014 communal development, such as stairs, common rooms and car parking, is to benefit from social housing relief. This is done on a proportional basis where the communal area will be used by the occupants of qualifying dwellings and other relevant development. This exemption only applies to 'qualifying dwellings' which are within the meaning of social housing and cannot be applied to communal development within a C2 housing scheme. However, in practice there may be grounds to argue that this should be applied to specialist housing schemes when consulting on preliminary draft charging schedules.

The Council will have a published a 'Regulation 123 List', which details all of the infrastructure which CIL money collected will be spent on. This list is significant importance as it will detail all the infrastructure projects to be funded through CIL and at the same time ensure that no planning obligations can be requested for such works, effectively the 'double-dipping rule'.

S106 contributions can still be requested with an adopted CIL Schedule for infrastructure not on the Reg 123 List, but the contributions would have to meet the s106 tests, and in April 2015 will be subject to the limitations on pooling.