Community Infrastructure Levy (CIL)

The Community Infrastructure Levy (CIL) is a fee that local authorities can charge developers for building new developments in their area.

Essentially, CIL is a fee charged to the developer which is then collected by the council, and then added to a separate pot of money which will be used later to fund new infrastructure projects like cycle lanes, traffic lights, roads, paving and healthcare facilities.

The idea of CIL is that if a developer builds a new development in an area that brings with it increased footfall, commerce and road traffic, then they should be part responsible for funding the surrounding infrastructure to support this growth.

It’s also a novel way of ensuring that funding for local infrastructure is more fairly distributed between the tax payer and property developers, and engaging communities with their local authority by allowing them to influence local spending.

What happens to the money once it has been collected?

The money is eventually released by the local authority to spend on local infrastructure. The amount of time this takes depends on the local authority. For example, they may decide to accumulate money from CIL over a set period of years and release the funds in one go, or alternatively they might want to release funds on a rolling basis, i.e. from month-to-month.

The law required that money accumulated from CIL is divided into two pots. The first pot contains 75% of the total funds and is used for a variety of projects in the entire borough which are decided upon by the local council.

The second pot contains the remaining 25% and is allocated to what is called ‘local CIL’. At least 25% of overall CIL accumulations, or local CIL, must make its way to parish councils and be spent on local projects, for example play areas and seating for children and families.

Who gets what?

Local CIL is distributed on a ward-by-ward basis (Southwark has 23 wards), and the amount distributed mostly depends on how much money was accumulated via CIL from new developments in that ward.

You should bear in mind that the amount available to spend is not a fixed sum, for example if there are more developments this means more money could become available next year or the year after.

The money distributed for local wards is to fund capital projects such as those listed above; that is to say, projects that have physical presence in the community such as plaques, maps, murals and signage as opposed to print and online media, or products to buy in a shop.

Who gets to decide how CIL is spent?

It is up to the local community of that ward, with the supervision of the council and their local councillors, to make suggestions and provide thought on how the money should be spent.

Ultimately, the final decision rests with the local authority.

How much local CIL is there for Southwark?

This depends on the period of time in which CIL is collected. In the last round of CIL, a grant total of £23m has been accumulated via the CIL scheme. £6m of this has been allocated as local CIL, and suggestions for how, and on what, the money should be spent should be spent were accepted between 10th March – 30th April 2020 via an online ‘Commonplace’ map.

You can learn more about the CIL scheme on the UK Government’s website.