There are many ways to approach setting a Community Infrastructure Levy and it will depend on your starting point and circumstances. Here we present one suggested approach.
- Show the amount of development that you are intending to put in your strategy (or is already in an adopted strategy) on a map
- Overlay a ‘heat map' of the values of the different key development uses e.g. housing. This will help you (and your consultants) to understand where your focus should be. It will assist you in terms of what rate/s you start testing and how much differentiation is relevant. If the vast majority of your future development is all in one area, or in areas of a similar value, this will indicate that no differentiation is required. If you are undertaking your plan making and site allocation at the same time as your CIL it may help you make decisions on the deliverability of potential sites
- Start with a CIL rate or rates that you have estimated based on the values from your heat map and test in terms of all the other costs (s106, affordable housing ( at planning policy level), carbon reduction etc) and for all your key uses. Then differentiate up and down from that rate. If you are preparing your plan at the same time you may need to try different combinations of CIL rate and policy levels (costs)
- When developing rates focus on the uses, locations, and sizes of development that are key to the development strategy in your development plan, as it is getting these correct that is necessary to demonstrate that your rates ‘would not threaten the delivery of the relevant plan as a whole'
- Look that the level of s106 that you have been achieving – use this as a sense check- if the CIL rate is way below- why? If it is way above – why?
- Involve councillors and management team. Make sure that they understand CIL and involve them in setting the rate, the balance between different costs and the level of risk (the balance between maximising CIL revenue for infrastructure and risking development delivery)
- Engage with the county council (and parish/own council) in terms of evidence to help you set your CIL, infrastructure requirements, and future governance and spending of CIL
- Engage with developers, agents and landowners that have knowledge of, and an interest in your area, at an early stage to test your viability and development assumptions
- Using your infrastructure delivery plan and following engagement with developers, identify a draft ‘Regulation 123’ list and identify how you could balance your CIL with s106 and affordable housing policies and test that with councillors and the relevant stakeholders
- Be prepared, and prepare your consultant, to undertake a number of sensitivity tests and iterations at each stage in the preparation of your CIL (viability evidence, key stakeholder meeting, PDCS, DCS and examinations stages)
- Make sure that you, and your consultants, understand all the viability model assumptions and why they have been selected:
- what is the competitive land owner return?
- what is the ‘viability cushion'?; and
- what is the assumed level of developer profit? etc
- Understand what proportion of the gross development value your CIL would be – does this seem reasonable?
- Consider how you will administer your CIL – the more differentiation the more complex the administration
- Make sure that you are considering governance of CIL at the setting stage as it may have an impact on the approach you take to the setting, administration or wider plan making.
You may find the information in the past PAS seminars about CIL useful in developing your approach :