Councils to raise millions when approving plans for new homes

Councils that approve planning applications for new homes are to be allowed to raise hundreds of millions of pounds from developers to pay for facilities such as schools, parks and health centres.

The Department for Communities and Local Government (DCLG) is introducing a new Community Infrastructure Levy which will help fund the Government’s drive to provide quality neighbourhoods.

According to Government figures, only 14% of residential planning applications currently make a contribution towards the cost of supporting infrastructure.

A DCLG official said: “Ministers think it is right that all developments pay their fair share and those who benefit financially when planning permission is given should contribute back to the local community by funding local infrastructure. That's why the new Community Infrastructure Levy (CIL) has been included in the Planning Bill.

“The new powers will allow councils to set a CIL for their area following an assessment of local infrastructure needs and consultation with their local community. Different types and sizes of development would pay different amounts depending on local needs to help ensure that the new infrastructure needed to maintain sustainable growth is provided.”

It’s likely that a wide range of developments will be affected because ministers believe that even small projects can have a cumulative impact on a local area and so should make a contribution to local infrastructure and facilities.

The Levy is being introduced as part of the Planning Bill. It’s expected that councils will be able to take advantage of their new powers from Spring next year.

Developments by homeowners such as extensions will be exempt from the levy.