Posted by: westlancashirerecord | November 22, 2018

CIL, Institutionalised Baksheesh?

My attention was drawn to an article in the Construction Index , a “Call to replace CIL with property sales tax”. Local authorities are taking money from property developers in exchange for planning permissions and failing to reinvest the money in infrastructure as intended.

New analysis by the Association for Consultancy and Engineering (ACE)  reveals that 40% of the receipts from the levy on developers meant for local infrastructure remains unspent by councils in England and Wales.

CIL was introduced in 2010 as a form of institutionalised baksheesh. It’s meant to help local councils to secure the revenue needed to meet the impact of new property developments, for example to improve local transport links or helping to build new schools or medical centres.

So ACE wants CIL to be replaced with a local property tax. FoI2000 requests show that despite raising £1.1bn between 2014 and July 2018, £443m remains unspent and is just sitting in council bank accounts. Locally, Aughton Parish Council alone has £20,998 unspent CIL in its bank.

What seems worse is that only 43% of councils demand CIL payments. ACE claims that the original intention of the levy as a means of fairly raising money for supporting infrastructure is failing. Using New York as a model where a 1% tax is applied on a house up to $500,000 and 1.425% if the house value is more, ACE suggests £2.16bn could be raised in England and Wales, based on the average sale of housing prices in the regions.

A good idea?

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