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Community Infrastructure Levy

The Construction Centre UK comments on the Community Infrastructure Levy (CIL)

The Construction Centre today released a statement in support of the proposed Community Infrastructure Levy (CIL) which is set to replace the unpopular Planning Gain Supplement.

The CIL will require housing developers to pay a charge in order to help local governments fund the infrastructure needed such as roads schools and health centres, in order to support the community. However The Construction Centre warned that tight controls and measures should be implemented as to how and what the CIL would cover.

Fears amongst developers were raised as they questioned how well the levy would be monitored and what possible appeal processes could be put in place if the charge was deemed unfair. Many were worried that with Local Authorities in charge of the decision making, penalties such as the withdrawal of planning consent or permissions to work could be used against developers if a dispute was raised.

The Home Builders Federation (HBP) and British Property Federation BPF) reviewed the proposals for the CIL and put forward their recommendations which included a list of what it could be used to pay for and also clear cut distinctions between the CIL and the section 106 system in order to prevent developers paying twice for the same infrastructure.

The government hopes that the levy will enable local councils to generate millions of pounds which can be put into developing communities and essential infrastructure project to support the housing around it. It is thought the new levy will be implemented by Spring 2009.

The Construction Centre stated it was in favour of the scheme which would inevitably help develop local infrastructure and secure sustainable communities for the future. However it warned that local councils already struggle with a lack of resources and for the government to impose additional responsibility could lead to inaccurate assessments and delays.

Richard Simmons, Managing Director at the Construction Centre said “The more standardised the levy can be the better otherwise it becomes a case of developers simply supporting community funding. There is the worry that decisions could be less than objective and made as a result of certain personalities in certain councils. Developers might take the view that they are building houses which will pay council tax anyway, therefore contributing towards infrastructure. However I am certain if a fair and equitable framework of rules and pricing was put in place, developers would accept that the levy could provide a positive support for the community in which they are building.”

The HBF and BPF clearly stated that the “funds raised from the CIL would need to be regarded as additional to the existing sources of finance available to fund infrastructure and that it should not lead to any reduction of local or national budgets”. The Construction Centre said the CIL was a positive step forward and that by giving responsibility to local authorities for the levy, despite the potential resources issue, it would help maintain relationships with developers. Careful planning and assessment would also need to be undertaken in order to set levies at fair and reasonable rates.

The Construction Centre reiterated its support for the UK’s housing industry and highlighted that small to medium sized firms may be a possible area for concern and said due care must be given to correctly assessing charges on small projects as well as the large.

More information can be found at
http://www.theconstructioncentre.co.uk

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