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Institution of Civil Engineers

22 Jul 2011 11:07:32

Engineers urge caution over infrastructure levy

Friday 22 July: The Institution of Civil Engineers (ICE) has today made a second plea for government to protect what it says is 'a vital source of infrastructure funding' in the Localism Bill.

Amendments proposed to the bill in the House of Lords this week would allow the Community Infrastructure Levy (CIL), introduced in the Planning Act 2008 specifically to provide for vital new and upgraded infrastructure, to be opened up further for use by local authorities for other purposes.

In a letter to Rt Hon Eric Pickles MP, Secretary of State for the Department for Communities and Local Government (DCLG), ICE express extreme concern that the Government, represented by Earl Atlee, suggested that it was inclined to favour those amendments. It says that this could direct much-needed funding away from the provision of the essential infrastructure that underpins economic growth, both locally and nationally.

ICE vice president and chair of the ICE's localism panel Geoff French said: "ICE strongly believes this important funding stream must be protected for its original purpose, the provision of vital infrastructure. We fear, however, that there is a danger of it becoming simply a tax on development. Local authorities are already facing reduced budgets; if the CIL is weakened in this way it is likely to end up being used to plug funding gaps in other areas, and our nation’s infrastructure will suffer as a result."

The DCLG has previously estimated that by 2016 CIL could be worth £1bn per year[1]. With government also estimating that £200bn needs to be invested in the UK’s infrastructure in next decade, ICE says the CIL will become an increasingly important funding stream.

Lord Jenkin of Roding tabled two amendments on behalf of ICE and supported by the Local Government Technical Advisers Group, the Chartered Institution of Highways & Transportation and Association of Directors of Environment, Economy, Planning and Transportation, seeking to clarify that the CIL would:

1. only be used for maintenance and development of new infrastructure, not revenue funding of existing infrastructure
2. be prevented from being used for purposes other than infrastructure needs if passed onto neighborhoods affected by the development as proposed

Speaking in the Lords debate, Lord Jenkin of Roding said: "The question is: can it be extended to something that is not infrastructure? I contend that the original intention of the Act was perfectly clear and that the answer to that has to be no.

"We have to be very careful. We are talking about very large sums of money. We have to get it right."

ICE expects that the purpose of the CIL will be given further consideration at the report stage in the autumn. In the meantime Institution representatives are meeting with Earl Attlee to discuss the issue further.

The British Chambers of Commerce and the British Property Federation have also expressed concern regarding the changes to the CIL. See notes.

Download ICE's briefing on the Community Infrastructure Levy.

[1] Amendments

Amendment 148ZZBC (to subsection (2A)(b) of the Bill) seeks to limit use of CIL for revenue purposes. ICE considers that our amendment reflects the current Government's stated purpose for CIL, the original justification for the Levy, and the importance of new and upgraded infrastructure. Without this amendment, we are concerned that existing budget pressures will mean little CIL is spend on the new and upgraded infrastructure it is intended for. Such infrastructure is, of course, an important underpinning for sustainable economic growth, quality of life and in meeting environmental challenges.

ADEPT (the Association of Directors of Environment, Economy, Planning and Transport (formerly the County Surveyors' Society)) and the CIHT (Chartered Institution of Highways and Transportation) support our amendment 148ZZBC.

Amendment 148ZZD (to subsection 4(2) of the Bill) seeks that CIL passed to others should still be spent on the infrastructure needs that justified the initial charging schedule. Planning authorities seeking income from CIL must gather objective evidence, consult on their proposals and have them independently inspected. ICE believes that only proposals which satisfy these criteria should be eligible for expenditure – by any party. Government has spoken of its intention to pass a "meaningful proportion" of CIL to neighbourhoods affected by development: ICE is simply concerned that it is still spent on the most important infrastructure and not seen as a cash windfall.

ADEPT, CIHT and TAG (local government’s Technical Advisory Group) support our amendment 148ZZD.

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