Property industry warns ministers against widening use of CIL

The government’s willingness to consider widening the permitted uses of the Community Infrastructure Levy has been sharply criticised by the property industry.

Speaking in a debate in the House of Lords on the Localism Bill yesterday, Earl Attlee, a government spokesman, said: "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.”

Earl Attlee also said ministers would consult on whether to allow CIL payments to be spent on affordable housing.

But the British Property Federation called on ministers to reject proposed changes to the CIL, warning that they could see local authority investment in infrastructure slashed.

The BPF said it would strongly oppose any attempt to extend the scope of the levy from its core aim – funding the infrastructure needed to support development – to an undefined obligation to “support communities”.

“This could see CIL revenues designed for new roads, schools and hospitals instead diverted to plug the hole in the funding of other public services for which it was never intended,” the Federation claimed.

It argued that unless the £6bn predicted to be raised by CIL over the next decade was spent on infrastructure then development would be held back in many parts of the country and economic growth would suffer.

The BPF also suggested that communities would be turned against development  “when they see that the new infrastructure needed to mitigate its impact can no longer be afforded”. This would run counter to the government’s aim of giving communities incentives to accept development in their areas, it added.

Liz Peace, chief executive of the British Property Federation, said: “We would urge ministers 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.

“It could also make communities more hostile to development – not less, as Government seems to hope. Concerns around new development are usually around the impact on local services and the need for new roads, schools and hospitals. Taking money away from this necessary investment will be seen for what it is - a desperate and crude attempt to divert CIL funds to plug a hole in the funding of public services.”