The Department for Communities and Local Government (CLG) has sent a Circular letter to authorities to outline the legal position in relation to the contracting out of Community Infrastructure Levy (CIL) functions.
The Circular letter outlines the content of an Order which came into force on 7 December 2011 and enables local authorities and public bodies (i.e. charging and collecting authorities) that are authorised to collect or charge the Community Infrastructure Levy (CIL) to outsource their CIL functions to other organisations and to "choose which, if any, functions they wish to contract out".
CIL is a levy that local authorities can charge on new developments. Under the Order authorities can contract out of and outsource CIL functions including the setting, charging, collecting, enforcement and spending of the levy.
Charging authorities may not, under any circumstances, contract out of principal CIL functions such as approving or withdrawing charging schedules.
CIL came into force on 6 April 2010 and introduced a charge on new developments to be applied by authorities to fund infrastructure needed to support the development of their areas. The levy will be paid by owners or developers of land, subject to statutory rules on assuming and apportioning liability and scheme-specific contractual arrangements.
Contracting out and outsourcing of CIL functions is intended to facilitate competition between potential suppliers of CIL services, supporting charging and collecting authorities and helping them achieve best value for the public in the delivery of public services.
In spite of the ability to contract out and outsource CIL functions, charging authorities will remain ultimately responsible and must ensure that their functions are carried out in accordance with all relevant legal and procedural requirements..
“The Order has been in force for over 7 weeks, but will have slipped under the radar of many as a result of the extremely limited consultation carried out last year," said planning law expert Marcus Bate of Pinsent Masons, the law firm behind Out-Law.com.
"CLG’s publication of new guidance is to be welcomed, therefore, as much for highlighting the existence of the Order as for explaining its specific implications," said Bate. "Providing charging and collecting authorities with more flexibility to outsource statutory functions is an eminently sensible idea, particularly given the critical lack of resources and financial constraints faced by authorities, as well as the administrative burden of implementing CIL.
"Developers should not expect the Order to make a material difference to the way in which they will be charged and pay CIL," said Bate. "CIL contractors will act as agents for authorities and ultimately authorities will remain accountable for CIL implementation in their areas."