Developer's could be in for a rude awakening as TfL has revealed that despite Mayoral CIL2 being adopted in 2019 with a BCIS All-in Tender Price Index of 336, this figure was provisional and the adoption index figure has now been revised to 330.
The result is an indexation rate for 2021 of 1.009 rather than the 0.994 index rate many local authorities have been using. When applied to the MCIL2 rate for offices of £185/m2 this is a difference of £3/m2. Whilst this may appear small, cumulatively it could have a significant effect on the viability of schemes, especially those that undertook feasibility studies on the basis of the lower indexation rate. It also throws into question the legitimacy of CIL liabilities issued this year based on the lower indexation rate which is still widely used by London Authorities.
Another quite frightening acknowledgement from TfL is that some collecting authorities interpret the CIL regulations pertaining to indexation differently. This is because whilst there is a requirement for charging authorities to publish an annual CIL rate summary, the extract from the regulations only requires that authorities use the BCIS index that is “published from time to time”. This means that some authorities apply indexation annually, while others may apply it monthly or at the point of planning permission. In most cases the two align but not always.
Tfl's position on this? Essentially to ease the administrative burden, the default position for MCIL is for the local application of indexation to be applied to MCIL also. This means that what should be a standard levy across London may be higher in one council area than another.
We spoke to Lyana Powlesland , Senior Planner and CIL Specialist at ET Planning who didn't pull any punches when we revealed TfL's latest position. She said "the Mayor of London/TFL is the charging authority for MCIL2 and therefore the lc (the index figure for the year in which the charging schedule took effect) figure should be determined by them. It should not be for the collecting authority to interpret the figures as they wish, with the possibility of the position varying between authorities? This would leave huge discrepancies and inconsistencies at appeals and make determination more difficult by the VOA (Valuation Office Agency)"
The Community Infrastructure Levy is a complex beast outlined by the fact that some local authorities are still yet to adopt a charging schedule despite the original guidance being published on 12 June 2014. This is just the latest development in a whole line of controversies since then.
The Government are proposing a new system which is designed to be easier for the public to access, is muted to be able to 'transform' the way communities are shaped and promises to 'builds the homes this country needs'.
In the new system local areas will develop plans for land to be designated into three categories:
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