RICS CIL Index 2024 Announcement

The Royal Institution of Chartered Surveyors (RICS) Building Cost Information Service (BCIS) has today, Monday 23 October 2023, released the Community Infrastructure Levy (CIL) Indexation factor for 2024 – set at 381 – only the second rise in the index since its introduction in 2019, with effect from January 2020.

Indexation is used to account for inflationary changes in industry costs, in this case construction, to align the CIL base rates set by the individual Local Planning Authority (LPA) to current market levels; and for projects within Greater London, Mayoral CIL also.

Previously, the CIL Regulations 2010 (as amended) had been using the BCIS All-in Tender Price Index (TPI), a common method for cost planning in the construction industry. However, with the 2019 amendments to the CIL Regulations, the CIL Index was set up to fix the indexation for the following year, as the TPI’s active database would fluctuate to account for a more precise position with the introduction of new project information – usually until around 12-18 months until it was fixed.

The CIL Index is published on the same base as the BCIS TPI – still used for dates preceding the introduction of the CIL Index – and is calculated by reference to the average of the BCIS TPI over the four quarters prior to the fourth quarter each year.

Todd Arnison, Property Tax Surveyor and part of E³ Consulting’s CIL team says “The index was in slow decline, from the introductory figure of 334 in 2020, by one point each year for its initial three years of operation – owing to the economic impact caused by the Covid pandemic. For the past two years though we are seeing the affects of the wider global inflation represented in the consecutive CIL Index rises to 355 and now 381 – both increases of roughly 7% year-on-year. This means that new planning permissions granted from 01 January 2024 will see higher CIL liabilities, subject to LPA adoption and respective rates for planning use. We continue to see the Covid affects ‘dragging on’ for LPA planning teams and relatively slow response times to granting of permissions, beyond the standard 8-12 weeks, we therefore suspect that most planning permissions applied for from now until the end of the year will be subject to the higher CIL index rate.”

Please do get into contact with the E³ Consulting team to understand what this change in the CIL Index for 2024 could mean for you and your new projects. We are happy to set out how we may be able to assist through our free HEALTHCHECK on hello@e3consulting.co.uk or 0345 230 6450.