Community Infrastructure Levy: Homeowners

Gareth Bacon Excerpts

Wednesday 29th April 2026 Westminster Hall

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to serve under your chairmanship, Mr Turner, and to take part in this debate about the impact of the community infrastructure levy on private homeowners. I thank my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) for securing the debate; he has campaigned on this topic diligently and relentlessly alongside his neighbour, my hon. Friend the Member for Farnham and Bordon (Gregory Stafford). I am sure those in the Chamber will agree that both of them have made powerful and persuasive speeches this morning.

The community infrastructure levy—more commonly abbreviated to CIL—is clearly not being enforced reliably, consistently or appropriately enough. What should be, and was introduced as, a sensible alternative or addition to section 106 payments has become, for many homeowners, a financial burden far beyond their wildest nightmares. CIL was specifically designed to be a levy on developers in mitigation of the impact of new developments to ensure that they contribute to local infrastructure. It was designed with safeguards, such as the fact that the levy can apply only in areas where a local authority has consulted on and approved a charging schedule that sets out the levy rates, and published that on its website.

The rates were to be decided by the local authority to ensure an added democratic oversight to the whole process. Moreover, and perhaps most importantly, CIL was established with sensible exemptions—at least on paper. Primarily, it was meant to be the case that only new developments that create net additional floor space of 100 square metres or more, or create a new dwelling, are potentially liable for the levy. That should have meant that most residential annexes and extensions, house or flats built by self-builders, local authority or housing association-provided affordable housing and charity developments are exempt.

Most importantly in the context of this morning’s debate, if a householder development is over 100 square metres, an exemption can still be secured if it is applied for, but that is not a straightforward process. As my right hon. Friend the Member for Godalming and Ash said in his opening speech, it is a rather onerous and complicated process of submitting myriad forms against tight deadlines before any building work can start.

Many people are caught out, having filled out the forms incorrectly or late. In many cases, homeowners were not even aware of the existence of CIL until it was too late. Even in the case of an entirely innocent mistake where council determines an application to be retrospective, the householder will become liable for CIL. The CIL Regulations 2010, which were created under the Planning Act 2008, fail to adequately safeguard those exemptions and have therefore not properly protected homeowners from exorbitant bills from local authorities failing to properly discharge the collection of the levy.

It is important to note that this is not happening everywhere. Around 200 councils operate CIL. As has been acknowledged in earlier speeches, some take a pragmatic, common sense and humane approach to its application. Others, however, demonstrably do not, and have followed the legislation to the letter without any regard for its overriding intention. That prompts the question: if some councils can adopt the regulations more flexibly, why cannot others?

The Sunday Times has reported cases involving large sums of money being charged to residents in Surrey, Sevenoaks, London, Shropshire, Horsham, Bracknell Forest, Basingstoke, Chester and East Sussex. The Government have not issued any official guidance to local planning authorities on the enforcement decisions on CIL charges that have previously been levied on householder developers. We have heard powerful and devastating examples from my hon. and right hon. Friends here today: the details of the homeowners often improving their greatest and proudest assets—their homes—and finding themselves with a bill for life-changing amounts of money that they were never told they were at risk of incurring.

That is a deeply troubling scenario to play out in our local areas, and it is made worse when we consider that in some cases the residents in question found themselves not only facing financial ruin but doing so with no right of appeal against the charge. This has led to people handing over their life savings or even their pensions, funding their debt through huge amounts borrowed from friends, family or sometimes unscrupulous lenders, remortgaging their homes or, in some of the most shocking cases, selling their homes to pay off the local authority, and finding themselves with nowhere to live and nowhere to go.

Let me be clear: the Opposition are not saying the original intention was wrong, nor are we saying that this situation has come about by deliberate design, because it is important that local infrastructure is not only protected from the strain of increasing housing stock, but, vitally, upgraded to match new levels of demand. However, in too many cases, CIL is simply not working that way.

Even beyond the heinous examples shared today, residents who are exempt from CIL but live in an area where it is being levied are not seeing its benefits. According to research carried out by the Home Builders Federation, that is because local authorities in England and Wales are currently sitting on an accumulative total of around £2 billion in unspent CIL money. These deposits are earning the local authorities in question millions of pounds of interest, which they are using to support their revenue budgets.

The closest alternative, section 106 of the Town and Country Planning Act 1990, is not much better. It allows local authorities to secure investment in central infrastructure arising from development, similar to but not exactly the same as CIL. Based on another piece of research from the HBF, across England more than £1.5 billion of section 106 contributions are made each year towards funding, facilities and services.

However, according to the Urban Mobility Partnership, £5.3 billion of those annual contributions remain unspent in the accounts of local authorities in England and Wales. Even when they are spent, the HBF has shown that last summer local authorities reported a 20% rise in section 106 negotiation timelines, with 35% of all section 106 agreements taking more than 12 months to finalise and more than a third of councils having an average timeframe of more than 500 days.

It is clear that our systems for supporting infrastructure in our local communities are failing private homeowners on two counts: first, and most shockingly, they are landing frighteningly large Bills on the doorsteps of unsuspecting homeowners who are seeking only to improve the homes that they have worked hard to buy, sustain and improve; and secondly, the benefits of the payments are not being felt by the local community.

The Minister is a decent man, and I know he shares my concerns about this issue. He has said before that he

“recognises that procedural requirements relating to exemptions for housebuilder applications under the 2010 CIL regulations have had financial consequences for some homeowners.”

He further stated that

“a series of households across the country have been very badly hit by this. It is very clear to us that the CIL regulations in question are not intended to operate in this way. We are giving very serious consideration to amending them to ensure that no one else is affected in this manner.”

I do not doubt his sincerity.

The Government must address those points and do so quickly. Perhaps the Minister could commit today to finding much needed time in the next parliamentary session to solve this crisis, back homeowners and undo this regulatory mess. Would he be prepared to put a timeframe on that today? It is vital that more is done to help homeowners facing these bills and to ensure that funds find their way into the beneficial causes in our local communities, and for the Government to ensure that these outcomes are realised quickly.