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Neighbourhood spend guidance

Support for parish councils, wards and neighbourhood forums on accessing Community Infrastructure Levy (CIL) for projects.

Non-strategic portion

The non-strategic portion of CIL is often referred to as the ‘neighbourhood portion’ of CIL that the council receives. It can be allocated to local communities within whose area, the development falls. Parishes with appropriate governance will be passed the CIL. In non-parished areas such as wards, forums and meetings, the CIL receipt will be held by the council and spent in consultation with the local community (see spending in wards/non-parished areas). The distribution of neighbourhood money is 15% for areas without a made neighbourhood plan (capped at £100 per Council Tax paying dwelling in their area, per annum) or 25% where there is a made neighbourhood plan in place and which was made before the relevant planning permission was granted.

For parish councils with no made neighbourhood plan, the 10% difference in CIL money will go to the CIL strategic portion. The funds collected will be spent wholly or to partly fund strategic infrastructure types and/or projects to support development across Maidstone.

Who can receive CIL

Parish councils

The 2010 Community Infrastructure Levy as amended by the 2013 regulations, Part 59A, sets out that CIL must be passed to “local councils in England”. All parish councils (which excludes those that are only parish meetings as they are not councils) will be passed the neighbourhood CIL monies received for their area if they meet the appropriate financial governance requirements. Parish councils have the right to say to the borough council that they do not wish to receive CIL and can ask the borough to spend the money on their behalf.

CIL payments to parishes can be paid up to twice a year for the preceding six months’ income.

  • CIL income received between 1 April and 30 September in any financial year will be paid by 28 October of that financial year and
  • CIL income received between 1 October and 31 March will be paid by 28 April in the next financial year.

These are set out in Regulation 59 (d) of The Community Infrastructure Levy (Amendment) Regulations 2013.

Non-parished areas/wards:

We will retain the CIL and spend it in consultation with the local community. The amount of consultation will be commensurate to the amount of CIL received.

What the neighbourhood portion of CIL can be spent on

The Community Infrastructure Levy Regulations 2010 (as amended) state that CIL must be spent on:

  • the provision, improvement, replacement, operation or maintenance of infrastructure; or
  • anything else that is concerned with addressing the demands that development places on an area.

This gives parish councils considerable freedom to spend the neighbourhood portion of CIL on projects that address the impact of development in their local area.

Infrastructure is broadly defined in the  Planning Act 2008. There are typically three broad categories of infrastructure:

  • physical - cycle ways, village halls, benches, fencing
  • social - education and health facilities, art and culture, sports halls, community assets
  • green - parks, woodlands, play areas, public open space

Neighbourhood portion ongoing costs

Where capital assets are purchased such as buildings, computers etc., the asset should remain a benefit to the community for its useful economic life. Parishes or forums who commission such projects will be responsible for all future maintenance and associated costs unless otherwise agreed. When commissioning a project it is expected that due consideration as to how ongoing revenue/maintenance costs for new infrastructure can be secured.

Spending CIL

Only parish councils can spend CIL and they may choose to:

  • spend money on a specific project in the parish area in accordance with the regulations
  • spend money on a specific project in a neighbouring area
  • choose not to receive the CIL and ask us to spend on their behalf
  • choose not to receive the CIL twice a year but to draw down as and when
  • use the CIL to lever in matched funding
  • choose to collaborate with another parish or forum where there will be mutual benefits.
  • choose to fund an infrastructure project run by us or other infrastructure provider such as Kent County Council
  • choose to partner with a third party, landowner or organisation.

Project spend accountability

If the parish council have chosen to spend the CIL money themselves they will be responsible for its spend, the tendering and commissioning of contractors and their suitability, insurance etc. to undertake the works, paying invoices and managing the whole process. These transactions will be reported in their annual parish CIL report.

If the parish council chose us to spend the money then we will use their procurement and accounting procedures.

If two parish councils collaborate on a joint project they will each be responsible for ensuring their portion of CIL is spent appropriately and correctly reported.

If the parish council works in partnership with another organisation or landowner, the parish council will be responsible for accounting for the CIL receipt and its legitimate expenditure.

How to agree what to spend it on

To assist parish councils in making the best use of their receipts and neighbourhood forums to be the best able to influence the council, it is recommended that priorities are identified for the area. We suggest that organisations produce and publish on their website an 'Infrastructure Spend Plan'. This should have short, medium and long term objectives and where appropriate provide an outline or details of projects.

Parish councils are encouraged to work closely with their neighbours, other interested landowners and organisations and us, to agree on infrastructure spending priorities.

It should prioritise the projects identified in the adopted neighbourhood plan (if there is one) and can form the basis of any local consultation. It would also be prudent for the plan to acknowledge that something specific may arise as a direct result of  development that may require the allocation of CIL funds.

These plans are discretionary but will enable the community to see what is being proposed and will be a useful tool for consultation and consensus building in the local area.

Time limit to spend CIL

There is a time limit on spending the neighbourhood CIL. Regulation 59E states:

  • monies must be spent by the parish within five years.
  • If the PC does not spend their CIL within five years of receipt, the CIL Team may serve notice on the PC; this is called a repayment notice. Exceptions may be made such as:  if the PC can prove that they have allocated their CIL income to a particular project for which they are accumulating funds before spending.
  • If the PC receives a repayment notice, they must respond as requested, and return the un-spent CIL as directed. We will then be responsible for spending the returned CIL income on behalf of the PC.

        Infrastructure Spending Plan (ISP)

        An ISP can help to:

        • identify the infrastructure and investment needs within the community.
        • provide an evidence base for spending decisions on locally identified priorities.
        • identify sources of funding and opportunities for matching funding streams to make the most efficient use of income.
        • assist with external funding bids - providing evidence of local investment needs and priorities.
        • provide transparency to the local community - explain where local investment is being targeted.
        • encourage engagement by members of the community who use / will use the facilities and services being delivered.
        • provide a local perspective to help the district councils gain a better understanding of the communities’ priorities.

        The ISP is discretionary but a suggested approach is for it to be evidence-based, identifying current/existing infrastructure, assessing the impact of new development on this infrastructure and identifying the specific projects that will help address these. Sometimes this process can also identify gaps in infrastructure provision, for example identified growth in the numbers of young or older people but a lack of facilities for them locally.

        As infrastructure investment decisions affect all members of a community, the organisation should make efforts to engage as many people as possible in the process.

        The ISP should also be responsive to changes in development and infrastructure, so that it remains a reliable tool for decision-making, we recommend an  ISP is reviewed at least once a year.

        Publishing ISP

        It is recommended that the ISP is published on the parish councils/forum website and a hard copy made available for those without internet access.  We also recommend a copy of the ISP is sent to our CIL Team: cil@maidstone.gov.uk. This is not only so that we have a record of your actions but so that we understand your intentions and support you to work together to achieve your communities’ aspirations and objectives.

        Working with us and other partners

        It is good practice to discuss any potential expenditure of neighbourhood CIL funds with us. Early discussions will ensure that projects are in line with the regulations and will also allow other funding sources to be explored and whether some of CIL managed by us can go towards the project.

        Other funding

        Funds can often go much further when they are pooled together. Other sources of funding include:

        • neighbouring parishes (subject to both parties agreeing)
        • local government grants and other external funding streams
        • the strategic portion of CIL income (subject to agreement and compliance with the governance procedures)
        • charities and trust funds

        Matching the neighbourhood CIL with other income streams may mean larger, more locally vital projects can be completed sooner. If priorities are aligned, the parish council may agree that the borough council could retain the CIL to spend on infrastructure which falls outside of the parish’s administrative area but will support the development of the area.

        Keeping records of CIL

        The parish council must record all CIL receipts and expenditure for each year and the amount of CIL carried over. As the collecting authority we have to prepare an annual plan and any organisation given CIL, for example parish councils must prepare and submit an annual report to us.

        The report is for the financial year and reports should be submitted by the end of June. We will then liaise with you if we need more information and then we’ll publish the report by the end of the calendar year.

        Reports must be sent to the CIL team and published annually on your website by 31 December, as stated in Regulation 62A. For parishes with no website these will be published on our website. Parishes that do not receive any money, do not have to publish a report, but may wish to publish one for information, in the interests of transparency.

        Requirements for the annual report

        The report must comply with accounting and audit procedures and be prepared by those who spend CIL receipts. It should include the following:

        An annual CIL report for all parish CIL monies is required for each financial year (the 12 months ending 31 March).

        We will collate data from the parishes and prepare an annual CIL report for all of the CIL money received in the borough and publish this no later than 31 December. The report should  include information on the following:

        • CIL receipts
        • CIL expenditure
        • a summary of items on which CIL has been spent

        The amount of:

        • spend on each item.
        • CIL repaid following a repayment notice.
        • any outstanding CIL due to the Council following a notice.
        • CIL retained at the end of the year.
        • CIL from previous years retained at the end of the year.

        Supplementary annual report requirements

        In addition to the annual financial CIL report, each year specific details of what the CIL receipts have been spent on will be requested as a supplementary report. The report will provide further details about each project including any photos or additional documentation.

        Penalties and consequences for funds that are spent inappropriately

        Any funds which are erroneously spent will need to be handed back to us. We will issue a repayment notice if this occurs.

        • if a parish council (PC) has not applied the funds in accordance with the regulations, then we can serve a repayment notice on the PC requiring it to repay some or all of the receipts that have been transferred to them.
        • if the PC receives a repayment notice, they must respond as required, and return any remaining miss spent CIL as directed. We will then be responsible for spending the remaining CIL income on behalf of the PC.
        • if the PC is unable to repay the amount specified in the repayment notice, the CIL team  will recover the amount from future CIL income that the PC is due to receive. Regulation 59E (5)