Coalition pledges to stick with Labour planning tariff after all

The government is to jettison a Tory pre-election promise to scrap Labour’s planned Community Infrastructure Levy, decentralisation minister Greg Clark admitted today.

Clark said that the government will instead reform the existing proposals, which will see developers charged a tariff by local councils on every home built in their area. The levy, above and beyond developers obligations under section 106 agreements, will go toward paying for infrastructure in the local area.

Under the Coalition plans, however, a proportion of the money will be set aside for neighbourhood groups to spend as they see fit. Councils will decide the rate of the levy, as well as set the payment deadlines for the tariff.

Payments in kind of any value will now be accepted, with Labour having proposed a £50,000 minimum threshold. The levy will only apply to housing developments of more than 100 sq m.

Decentralisation Minister Greg Clark said the decision would allow communities to reap the benefits of new development in their area, while also providing certainty for industry.

He said: “Too little of the benefits of development go to local communities, and our ambition is to correct that with a reformed levy under genuine local control. Neighbourhoods will now get a direct cut of the cash paid by developers to councils - to spend how they wish to benefit the community, from parks and schools to roads, playgrounds and cycle paths.

Peter Weatherhead, director of development consulting at global real estate services firm DTZ, said the move was an “about-face” by the government and seemed to contradict itself. He said: “The retention of the Community Infrastructure Levy (CIL) represents a significant policy shift, as the Tory Open Source Planning paper had promised to replace CIL with a locally derived tariff system.

“Although the two would not differ greatly in principle, the assumption was that tariffs would not have to go through the procedural hoops introduced as part of the procedures necessary for a local authority to adopt CIL. The move to keep CIL may therefore mean that developers have to deal with even more bureaucracy.”



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