CIL Rate setting

Simplicity

• Single rate (?)

• Requires minimal evidence

• Need to set near the lowest

value use / area (an

opportunity cost?)

Complexity

– Differential rate (probably)

optimises income for

infrastructure

– “Progressive”: the most

profitable developments pay

more

– Too complex may be off-

putting and awkward to

operate

– Too complex likely to require

greater justification through

evidence

Simplicity vs Complexity

Estimating your infrastructure funding gap

Estimating CIL income

Testing viability

Working hypothesis

Draft rates

Adopt rates

Who is involved?

Officers

Officers, Members (&

Partners)

Officers, Members (&

Partners)

Iterative Charge Setting

Use / Area A Use / Area B Use / Area C

CIL Viability

levels

Differential Rate 2income (£/time)

Single Rate income (£/time)

Differential Rate 1income (£/time)

Differential Rate Setting

• CIL is pro-growth – it should have a positive economic effect on development across your area

• Whilst your CIL rate needs to be informed by viability evidence, the evidence does not have to dictate your rate

• No policy-driven zero/low rates. Base your rates on economic viability evidence.

• A charging schedule must stand on its own. A charging authority cannot rely on exceptional circumstances relief or any policy. The Guidance accepts that some individual developments may be unviable because of CIL.

• Ensure no double charging – be clear with developers what is

CLG’s key messages

The independent examiner must check that:

1. Is the charging schedule supported by background documents

containing appropriate available infrastructure planning and

economic viability evidence?

2. Are the charging rates informed by and consistent with the

evidence?

3. Does the evidence demonstrate that the proposed charge rates

would not put the overall development of the area at risk?

What the Examiner must check

1

6

11

16

21

26

31

36

£10/ sq m variance inCIL rate

10% variance in buildcosts

10% variance in salesvalues

The proportional impact of CIL on

development viability