The government has released a report on the effectiveness of CIL and suggested reforms to the system. The report has found that CIL has raised considerably less than was envisaged, raising £170 million in 2015, compared to original forecasts of £470-680 million per annum. Additionally, the many exemptions and reliefs from CIL have reduced the income generated by the levy, while at the same time putting an excessive financial burden on certain kinds of development, sometimes causing delays.
To remedy this, the government have proposed to replace CIL with a ‘2 track’ system, comprising:
A infrastructure tariff (The Local Infrastructure Tariff), which would be set at a low level and applied to almost all development.
An additional Section 106 on ‘large’ or ‘strategic’ developments, in line with the Regulation 122 tests.
Combined Authorities would also be enabled to collect an additional ‘mayoral type’ Strategic Infrastructure Tariff. This would not be obligatory and would be used to fund major infrastructure projects.
The Government believes that this approach will reduce the burden on Local Authority resources, speed up the process of putting the measures in place and increase net contributions from development, providing a ‘fairer, faster and simpler system’.