CIL - Community Infrastructure Levy
Some of you may have been hearing about something called CIL. What’s that I hear you cry!
The Community Infrastructure Levy is effectively a tax put on each new house that’s built to fund infrastructure. It’s charged on the area of the property counting the internal habitable space on each floor. It is the responsibility of the landowner to pay this, but in reality it is typically paid by the developer.
But who really pays? Hard not to come to the conclusion that it’s really the house buyer in the purchase price as a one-off hidden tax.
Anyway, Basildon Council is in the process of setting its CIL values and current thinking is that it will be £350 in Billericay, £230 in Wickford and £50 in Basildon, all per square meter. With a few strange quirks like there will be a £100 per sq.m. levy on Retirement homes in Billericay and not elsewhere, and just £10 per sq.m. on flats specifically in Basildon.
The Community Infrastructure Levy is effectively a tax put on each new house that’s built to fund infrastructure. It’s charged on the area of the property counting the internal habitable space on each floor. It is the responsibility of the landowner to pay this, but in reality it is typically paid by the developer.
But who really pays? Hard not to come to the conclusion that it’s really the house buyer in the purchase price as a one-off hidden tax.
Anyway, Basildon Council is in the process of setting its CIL values and current thinking is that it will be £350 in Billericay, £230 in Wickford and £50 in Basildon, all per square meter. With a few strange quirks like there will be a £100 per sq.m. levy on Retirement homes in Billericay and not elsewhere, and just £10 per sq.m. on flats specifically in Basildon.
So, if a house is 100 sq.m. (about the average size) the CIL will be £35,000 in Billericay, £23,000 in Wickford and just £5,000 in Basildon.
Whilst collecting money from development to fund infrastructure is right and proper, there are four very important points to take into consideration;
1. The CIL does not have to be spent where it’s collected. Money collected from the developments in Billericay could be spent on infrastructure elsewhere in the borough. You may have seen recent arguments from Councillor Callaghan berating ‘Billericay’ for not taking more houses in the Local Plan as it removes millions from ‘Basildon’s’ coffers. Conveniently forgetting that if you don’t need the houses, you don’t need the infrastructure so there is no CIL to be charged.
2. The high level of the proposed CIL in Billericay (compared to Wickford and Basildon) will make our town look like a good place to build even more houses in the future, as it will generate extra money for Basildon Council than building elsewhere. Hardly an equitable situation and does nothing to harmonise the borough or protect our green spaces.
3. Why have different CIL rates in the different towns when the cost to provide an element of infrastructure is going to be broadly the same in each location, whether the construction or a metre of new road or a new doctors surgery?
4. The CIL does absolutely nothing to help housing affordability in Billericay as the tax will simply be included in the price of the house being charged by the developer. They will not want the CIL payment impacting their profits. It is naive of the Government and Council to think that CIL will simply reduce landowner or developers profits. Like all taxes and levies, it is ultimately the citizen that ends up paying, out of already taxed earnings.
The Local Plan and CIL go hand in hand. Both are important. We all see the need for infrastructure to be built before houses and on the face of it the CIL provides the necessary funding.
But it’s a fine line between building the right number of houses for local needs and charging the appropriate CIL for the required infrastructure, and building an excessive number of houses simply to raise money for the Council, both as the one-off CIL from developers and then the ongoing Council Tax from residents. Especially in Billericay where we will be hit by the highest level of both taxes.
One may start to think that the Local Plan has nothing to do with the ‘housing crisis’ and is more to do with funding local government. Is it’s really all about money at our ‘expense’?
UPDATE - since the above was written we have determined that the proposed CIL for Billericay is on par with parts of London and that Brentwood plans to impose a common CIL rate of £200 per sq. m. on all residential properties. Furthermore, we have it on very good authority that a rate of £350 will be contested by developers citing that it is not viable for profitable building. They will look to get it reduced, or will reduce the level of affordable houses they provide. Either way, it could have a negative impact on Basildon Council’s plan to raise money for infrastructure.
One last new point, CIL is only payable when development starts. How can Basildon Council deliver on its commitment to ‘infrastructure first’ if funding only starts to flow when it’s too late and housing development has started?!
Note - table above taken from the latest Basildon Council draft CIL proposal document which can be found here; Basildon Borough Community Infrastructure Levy Preliminary Draft Charging Schedule - October
Whilst collecting money from development to fund infrastructure is right and proper, there are four very important points to take into consideration;
1. The CIL does not have to be spent where it’s collected. Money collected from the developments in Billericay could be spent on infrastructure elsewhere in the borough. You may have seen recent arguments from Councillor Callaghan berating ‘Billericay’ for not taking more houses in the Local Plan as it removes millions from ‘Basildon’s’ coffers. Conveniently forgetting that if you don’t need the houses, you don’t need the infrastructure so there is no CIL to be charged.
2. The high level of the proposed CIL in Billericay (compared to Wickford and Basildon) will make our town look like a good place to build even more houses in the future, as it will generate extra money for Basildon Council than building elsewhere. Hardly an equitable situation and does nothing to harmonise the borough or protect our green spaces.
3. Why have different CIL rates in the different towns when the cost to provide an element of infrastructure is going to be broadly the same in each location, whether the construction or a metre of new road or a new doctors surgery?
4. The CIL does absolutely nothing to help housing affordability in Billericay as the tax will simply be included in the price of the house being charged by the developer. They will not want the CIL payment impacting their profits. It is naive of the Government and Council to think that CIL will simply reduce landowner or developers profits. Like all taxes and levies, it is ultimately the citizen that ends up paying, out of already taxed earnings.
The Local Plan and CIL go hand in hand. Both are important. We all see the need for infrastructure to be built before houses and on the face of it the CIL provides the necessary funding.
But it’s a fine line between building the right number of houses for local needs and charging the appropriate CIL for the required infrastructure, and building an excessive number of houses simply to raise money for the Council, both as the one-off CIL from developers and then the ongoing Council Tax from residents. Especially in Billericay where we will be hit by the highest level of both taxes.
One may start to think that the Local Plan has nothing to do with the ‘housing crisis’ and is more to do with funding local government. Is it’s really all about money at our ‘expense’?
UPDATE - since the above was written we have determined that the proposed CIL for Billericay is on par with parts of London and that Brentwood plans to impose a common CIL rate of £200 per sq. m. on all residential properties. Furthermore, we have it on very good authority that a rate of £350 will be contested by developers citing that it is not viable for profitable building. They will look to get it reduced, or will reduce the level of affordable houses they provide. Either way, it could have a negative impact on Basildon Council’s plan to raise money for infrastructure.
One last new point, CIL is only payable when development starts. How can Basildon Council deliver on its commitment to ‘infrastructure first’ if funding only starts to flow when it’s too late and housing development has started?!
Note - table above taken from the latest Basildon Council draft CIL proposal document which can be found here; Basildon Borough Community Infrastructure Levy Preliminary Draft Charging Schedule - October
