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Community Infrastructure Levy: Homeowners

It is a pleasure to serve under your chairmanship, Mr Turner. I congratulate my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) on securing this debate. I have applied for a similar debate twice, but clearly I do not have the touch of a former Chancellor in the Westminster Hall lottery.

This is a very serious issue. The community infrastructure levy is meant to be simple: developers contribute and that money is used to fund the infrastructure that communities need. That is the principle, and that is the promise, but in parts of my constituency that promise is being broken. The regulations are clear that CIL is intended to support growth through infrastructure, yet we see millions of pounds collected and sitting idle, with little evidence of delivery. The rules exist but the action does not follow.

In Waverley where, as we have heard, CIL rates are among the highest in the country, substantial sums are being collected and left unspent—£30 million when we last checked at the beginning of the year. That alone undermines public trust, but the reality is worse than that. The money does not simply sit there; it accrues interest—£125,000 a month in Waverley’s case. That interest is not ringfenced for infrastructure; it is absorbed into the general council spending. It is equivalent to 10% of council tax in Waverley’s case. Residents are told that the money is for community facilities when in reality it is sitting in accounts, quietly supporting day-to-day council spending.

At the same time, inflation is eating away at the value of the original CIL pot, so when the council does eventually spend it, it delivers less than it should. Communities lose twice: the infrastructure does not arrive and the money set aside to fund it is steadily diminished.

Worse still, the system is being misapplied. Of course, it is right that developers should contribute, but individual homeowners making changes to their own properties were never intended targets of the regime. Pursuing them aggressively, as Waverley borough council does, is not just heavy-handed; it is plain wrong. Let us call it what it is: a cash grab.

CIL may be a national framework, but it is administered locally. The contrast within my constituency could not be starker. In East Hampshire, charging rates outside the regeneration zone in Whitehill and Bordon range from £95.94 to £265.68 per square metre. Even with a manual exemption system, the council actively supports residents, contacting them repeatedly by letter, email and phone to make them aware of exemptions, guiding them through the process and clearly warning them of the consequences of failing to submit the correct forms. That is what good administration looks like.

Let us compare that approach with that taken by the Liberal Democrat-run Waverley borough council. There, the CIL rates charged to affected homeowners are among the highest in the country. In Farnham, they stand at £547.17 per square metre, rising to just under £570 per square metre in Haslemere and the surrounding villages.

With those high rates comes a very different approach. I have been contacted by a number of constituents who together face CIL liabilities of nearly £1 million. They are not developers; they are ordinary residents who feel blindsided, misled and, in some cases, harassed. They are being charged for exemptions they were never supposed to pay. That is not administration. That is extraction.

The response from the Liberal Democrat leadership, supported for too long by the Farnham residents group, has been one of inertia and, frankly, contempt. Instead of being helped to navigate a complex system, residents have been left in the dark and presented with life-changing bills. This is not fairness; it is the politics of envy in action, and my constituents are paying the price.

Let me give some examples. One constituent who lives on the Surrey-Hampshire border has an East Hampshire postcode but her property falls within Waverley. She was hit with a £48,000 charge, which has now risen with interest to £60,000. In Haslemere, another constituent received a £94,000 charge because an agent failed to submit the correct forms. He was forced to put his home on the market, with the only alternative to divert the majority of his pension to pay the bill.

In Lower Bourne, a couple were issued with a £54,000 charge two days before Christmas in 2024. That led to delays and additional restart costs of between £15,000 and £20,000. Also in the Bourne, a resident faces a charge of £150,000. In Moor Park, another faces a charge of close to £100,000, triggered by a mid-project planning amendment.

Even minor administrative issues are treated with zero flexibility. A Farnham resident now faces a £25,000 charge, along with £5,000 in legal costs, following a change-of-use application for a granny annexe. These are not speculative, rapacious developers; they are people improving their homes, supporting their families and planning for their futures. The human cost is real and growing.

As has been pointed out, last year my right hon. Friend the Member for Godalming and Ash and I met the Minister to discuss these issues. At the time, he appeared sympathetic, so I ask him today: what progress has been made? At that meeting, we urged the Minister to issue clear guidance to local authorities to prevent further harm while the regulations were reviewed. Unfortunately, that idea was not taken forward. I understand the concern about overreach, but what we are seeing now is not restraint; it is injustice.

I support my right hon. Friend’s proposed solutions. With that in mind, I ask the Minister three fairly straightforward questions. First, what progress has been made on reforming the CIL regulations? Secondly, will he issue clear guidance to ensure that councils do not exploit the rules to the detriment of ordinary homeowners? Thirdly, will those who have been wrongly charged be refunded? Under the current system, once development has commenced, there is effectively no right to appeal. It is a rigid and unforgiving mechanism. Most councils choose not to wield it in this way, but Waverley borough council has.

The spirit of the law is being ignored, and the balance has been lost. My constituents are being treated not as residents to be supported, but as revenue to be extracted. This is not what the levy was designed to do. It was meant to build stronger communities, not penalise them. The law may permit what is happening, but it was never intended to enable it. It is time we put that right.

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