Boles said that the money will be paid directly to parish and town councils, which can use it to back their priorities for their communities, although they would be expected to work with the local planning authorities. He said that any neighbourhoods without a neighbourhood development charging the levy will receive also receive a CIL share, but this will be capped at 15%.
Communities without a parish or town council will still benefit from this incentive, with the local planning authority retaining it and spending it in accordance with the wishes of the community, Boles said.
"Instead of hectoring people and forcing development on communities, the Government believes that we need to persuade communities that development is in everyone’s interest. Incentives are key to getting the homes built that we both need for today and for future generations," said the Department for Communities and Local Government in a statement.
“This Government is determined to persuade communities to accept more housebuilding by giving them a tangible share of the benefits it brings," said Boles. "By undertaking a neighbourhood plan that makes space for new development, communities can secure revenues to make the community more attractive for everyone.”
The National Housing Federation (NHF) welcomed the announcement.
“New developments should take into account the needs of local people, so we welcome the commitment to giving 25% of community infrastructure levy money to neighbourhood groups," said NHF head of homes, Rachel Fisher.
"But it’s crucial that this does not come at the cost of delivering affordable homes. Housing associations will continue to work with local authorities to deliver the right homes in the right places for everyone in the community,” she said.
The CIL funding initiative follows the Government's announcement last month of a £17 million funding scheme under which local authorities will be able to claim grants of up to £50,000 for up to a maximum of 10 neighbourhood area designations and, from the next financial year, to claim up to £100,000 for up to 20 designations.