CIL and Section 106: Developer Contributions Explained
What are CIL and S106 agreements, how much do they cost, and how do they affect your project?
If you're planning a development that creates new floor space or new dwellings, you'll likely encounter developer contributions. These are financial payments or commitments made to the local authority to offset the impact of your development on local infrastructure.
Community Infrastructure Levy (CIL)
CIL is a fixed charge per square metre of new development. Not all councils have adopted CIL, and rates vary significantly:
- Residential rates typically range from £50 to £400+ per m²
- The charge is based on the net additional floor space created
- Self-build exemptions exist (you must apply before starting work)
- Minor developments under 100m² creating no new dwellings are exempt
- Social housing and charitable development are usually exempt
How CIL Is Calculated
The formula is: CIL rate × net additional floor space (GIA) × BCIS index adjustment. The BCIS index ensures the charge keeps pace with construction costs. Your council's website will publish their CIL charging schedule showing exact rates by use class and zone.
Section 106 Agreements
Section 106 agreements (also called planning obligations) are negotiated on a case-by-case basis, typically for larger developments. They can require:
- Affordable housing - usually 20-40% of new dwellings on schemes of 10+ homes
- Education contributions - funding for school places generated by new residents
- Healthcare - contributions to GP surgeries and health facilities
- Open space - on-site provision or financial contributions to parks and play areas
- Highways - junction improvements, traffic calming, pedestrian crossings
- Ecology - biodiversity net gain, habitat creation, or management plans
Key Rules
S106 obligations must meet three legal tests:
- Necessary to make the development acceptable in planning terms
- Directly related to the development
- Fairly and reasonably related in scale and kind to the development
CIL vs S106: The Key Differences
| Feature | CIL | Section 106 |
|---|---|---|
| Set by | Published charging schedule | Negotiated per application |
| Applies to | All qualifying development | Usually major development only |
| Spending | Pooled for strategic infrastructure | Specific to the development's impact |
| Exemptions | Self-build, social housing, minor dev | Can be subject to viability assessment |
Practical Tips
- Check your council's CIL rates early - they can significantly affect project viability
- If you're self-building, apply for the exemption before you start work (you lose it otherwise)
- For S106-liable schemes, get specialist planning advice on viability if the contributions make your project unviable
- CIL payments can usually be phased - check your council's instalment policy