I’ve got an interesting week coming up, with a bunch of round tables and meetings (with fellow levy-headers) about the Government’s technical consultation on the new infrastructure levy: https://www.gov.uk/government/consultations/technical-consultation-on-the-infrastructure-levy.

A wiser bird might wait until those round tables and meetings have run their course before saying anything about the consultation, at least in public. But I am back from holiday and am still in a carefree kind of mood so I am going to throw caution to the wind and venture some preliminary thoughts.

Preliminary thought number one.  I don’t think the Government have given much thought yet to how the IL will actually work. They don’t really do more than set out the key features that they want to achieve (things like that IL will be mandatory and calculated as a proportion of the final value of a development rather than its floor area), but they are really asking the sector to do their homework for them in terms of constructing a workable system.  I get why they might want to do this given the enormity of the task at hand.

Second thought. Making IL (as the Government are envisaging it) workable will be a massive challenge.  The primary burden will fall on local authorities who will have a whole panoply of new duties and responsibilities (enter the Infrastructure Delivery Strategy), the much harder job of identifying IL rates and thresholds by reference to % of development value (goodbye CIL £ per square metre of floor area … we love you but you were far too simple!) that will result in at least as much, and preferably more, land value capture as S106/CIL.  The amount of evidence and information needed for that will be vast, incomplete and often disputed.  When are the local authorities supposed to squeeze in any planning work?

Thought numero tres.  Why do the Government think that this new system will be less complex than the current system?

• Current system = CIL (contribution to infrastructure) + S106 (to mitigate impacts)
• New system = IL for levy-funded infrastructure (but you need to net off infrastructure being delivered on site and you get into an impossible-to-define-precisely conceptual distinction between on and offsite infrastructure (one person’s onsite infrastructure is another person’s offsite infrastructure as the saying goes) + a scaled back S106 agreement called a “delivery agreement” that deals with impact mitigation (oh but it might be used to fund offsite infrastructure as well if the IL is not likely to be sufficient (how will we know?….Ed.)) but this depends on what “routeway” your scheme falls into … it may be that IL won’t apply at all and S106 agreements will be used.

Thought number four.  Why does the Government think that negotiating a delivery agreement will be any quicker than negotiating a S106?  We all know that the efficiency of a S106 negotiation depends pretty much entirely on the capabilities and workloads of the people conducting it. The same will be true of delivery agreements.

Fifth and final prelim thought.  I don’t understand why the Government are making such a radical set of changes when the objective of increasing land value capture could surely be met by more modest changes, with less risk of systemic collateral damage?  Here are two ideas that come to mind. One: make CIL compulsory everywhere. It seems that after the half a dozen or so amendments to the CIL regime we finally have something that is workable and everyone is now used to. Baby. Bathwater.  Two – introduce a standard template S106 agreement and mandate its use (goodbye to the patchwork of local authority templates many of which aren’t fit for purpose!) which could include a “review mechanism” (like the one required by Mayor of London) to capture an additional share of land value when the markets are on the up.

Levy-head in hands.