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  6. Ministers moot wider use of levy receipts

Ministers moot wider use of levy receipts

The Government has signalled that it is considering changing the scope of the Community Infrastructure Levy (CIL) by widening what it can be used to pay for.

Currently the levy is intended to be used to pay for infrastructure. However, Earl Atlee, a Government spokesman in the Lords has revealed that the Coalition is concerned that that may be too prescriptive.

During the committee stage of the Localism Bill in the Lords he said: “We are clear that the point of the levy is to support growth and new development. Infrastructure is of course central to supporting new development and unlocking growth, but it is not the only matter necessary to enable and incentivise development.

“We want to reflect on whether continuing to limit spending solely to providing infrastructure restricts local authorities' ability to support and enable development of the area. We want to consider whether widening permitted uses of the levy would make the instrument more effective and better placed effectively to promote, support and enable new development.”

He added: “We will carefully consider whether permitting spending on other matters can improve the instrument’s ability to support and enable development.”

Earl Atlee also confirmed that the administration would consult over the summer on changing the CIL regulations so that the levy can be used for affordable housing.

Developers, though, have voiced concern over the prospect of changes to how the CIL can be spent. The British Property Federation argued that CIL revenues designed for new roads, schools and hospitals could be “diverted to plug the hole in the funding of other public services for which it was never intended.”

It argued that communities might turn against development “when they see that the new infrastructure needed to mitigate its impact can no longer be afforded”.

The chief executive of the British Property Federation, Liz Peace, said: “We are delighted that ministers intend to reflect on the proper working of CIL rather than making decisions in haste.

“However, we would urge them to appreciate that if CIL is diverted away from vital investment in new infrastructure then this will undermine the ability of authorities to deliver development and will compromise economic growth.”

Read the Lords Hansard record (12 July, column 707).

 

Roger Milne

14 July 2011