The Uneven Geography of Financing Cities through a Betterment Tax: Using the Community Infrastructure Levy (CIL) in England

In urban public finance, finding alternative ways of supporting local service provision has become an increasingly important issue. With central government funding increasingly scarce, local authorities have been encouraged to find new ways of supporting themselves. In the UK this has taken the form of an in depth review of local government finance, together with the devolution of policy tools that incentivise local authorities’ to embrace the pro-growth agenda. Part of this suite of measures is a revised approach to betterment taxes and ‘planning gain’ through the introduction of a Community Infrastructure Levy (CIL). CIL provides local authorities with the opportunity to organise their policy on planning gain contributions in a transparent fashion through the development of a ‘charging schedule’, a formal component of a local authority’s legal planning documentation. The charging schedule sets out the fee (or range of fees) applicable to any development occurring within that local planning authority’s jurisdiction, typically expressed as a sum (£) per m2 of built space. The proceeds of CIL are then to be spent on locally identified infrastructure priorities, not necessarily related to mitigating the impacts of an individual development. The rationale for making infrastructure investment a priority for local, as well as/rather than central, government has turned on the academic logic that, public finance dedicated to new or improved infrastructure can have profound effects on local economic growth. As a consequence a central tenet in the ongoing struggle to effect revitalisation in urban England, has come to focus on the renewal of infrastructure dating to the Victorian, Edwardian and post-war periods. This paper seeks to explore the implications of this locally-financing infrastructure provision through a betterment tax (or arguably an impact fee) such as the Community Infrastructure Levy (CIL), and uncover whether the policy tool ‘fits’ a design of land value capture, using future revenue streams with a betterment tax realised in the present. Moreover the paper aims to report on ongoing research comprising, firstly, an investigation into the origins and emergence of the CIL policy, and, secondly; to study the variation in CIL’s implementation when considered in the context of the dynamic uneven economic geography to which it applies.