This protocol sets out proposed procedures for dealing with the allocation and monitoring of the spending of income arising from the Community Infrastructure Levy (CIL).
CIL differs fundamentally from S106 in that the funds collected are not tied to a specific development or the provision of specific infrastructure. Unlike infrastructure provided through S106 planning obligations, which must be necessary to mitigate the impact of a particular development and used only for that specific purpose, CIL funds can be used flexibly to fund any infrastructure as defined within the regulations. The Council’s Infrastructure Funding Statement (IFS) will set out priorities for CIL spend, but this will not exclude spend on items that are not identified in the IFS. CIL funds can be pooled freely to fund infrastructure priorities and collectively between authorities towards larger strategic investments. They should be seen as a contribution to assisting with the provision of overall infrastructure priorities which may well change over time.
Authorities are required to set out their priorities for expenditure through an annual IFS. The current IFS for Reading Borough was based on an Infrastructure Delivery Plan that was produced as part of the preparation of the local plan, and in consultation with the various spending services, and which drew on the previous Regulation 123 list. A Regulation 123 list was a now-superseded requirement for a list of items to be funded by CIL. A copy of the Council’s original Regulation 123 list was approved as part of the papers submitted to the Secretary of State for approval of the Council’s CIL Charging Schedule.
The spending priorities in the IFS refer to the types of infrastructure but does not specify particular schemes or projects. The priorities are based on adopted Local Plan policies, and relate to:
The CIL regulations set out specific requirements on local authorities to monitor, report and publish, annually, details of all funding received and all expenditure of
CIL funding. This will be completed through the annual IFS which the Council is
required to produce by 31st December each year.
Regulation 59F of the CIL Regulations 2010 (as amended) requires that at least 15%
of CIL monies should be spent in the ‘relevant local area’ in which development is
occurring. The requirement is that the local authority ensures that at least 15% of
receipts are directed to areas subject to development. It should be noted that
these monies (which are referred to as the ‘meaningful proportion’) do not have to
be spent on items identified in the IFS, but could be spent on anything to help
mitigate the impact the development has on the area.
The principles are that expenditure will be:
The Council’s February budget report includes the Council capital programme and
an indication of how it will be financed overall including any planned use of CIL receipts. The programme shows proposals for the forthcoming year with some forward planning/commitments for the following two years (i.e. a rolling 3 year programme) based on development monitoring and CIL database information. When the Council approves the budget it will also therefore approve in principle
the allocation of how 80% of CIL receipts will be spent.
The financial year end report (presented in the early summer) will provide as necessary a listing of CIL receipts received or expected imminently. It will indicate the level of CIL receipt from each listed development and thus a calculation of the level of 15% that should be allocated to the relevant area. For the purposes of CIL the relevant local area in the absence of any parish councils is the whole Borough, because Reading is a geographically compact area and a single settlement where residents make use of infrastructure in different parts of the Borough. The degree to which infrastructure relates to the areas where development is taking place will be a consideration in allocation 15% CIL funding, but this will be weighed against other considerations. In any event, when allocating the 15% local contribution, consideration needs to be given to the location of the development providing the CIL receipt and the impacts that the development has on its neighbourhood.
There is provision within the regulations for the local authority to allocate up to 5% of CIL receipts to the administration of the scheme. Set up costs, the costs of items such as the purchase of software, and the staffing costs involved in administering the scheme can be paid for directly from CIL receipts. Costs will be incurred by Planning, Finance and Legal Sections and any other sections with an input into the administration of CIL within the authority. Accordingly, up to 5% of CIL receipts will be allocated to cover all administration costs, albeit this figure can be reviewed from time to time.
The use of 80% of CIL will be focused on:
Which accord with the following:
The use of the 15% of CIL which is allocated ‘locally’ could, as alternatives to the priority projects in the area being funded under the 80% above, be focused on:
Which must accord with following:
In regards to how the 15% allocation will be processed: