Section 106 vs CIL: What’s the Difference?

Section 106 agreements and the Community Infrastructure Levy both extract money from property developers to pay for local infrastructure — but they operate on fundamentally different principles. Section 106 is negotiated case by case, tied to a specific planning permission, and funds infrastructure directly related to the development. CIL is a fixed charge per square metre of new floorspace, set by the council and payable by any qualifying development regardless of its individual impact.

Understanding the distinction matters because it affects how much money your council collects, what it can spend that money on, and how much say local communities have in the process. Across England, these two mechanisms together channel billions of pounds from private development into public infrastructure every year.

What is the Community Infrastructure Levy?

The Community Infrastructure Levy is a fixed-rate charge that councils can impose on new development. It was introduced by the Planning Act 2008 and brought into force through the Community Infrastructure Levy Regulations 2010. Unlike Section 106, which is hammered out between the developer and the council during the planning application process, CIL rates are set in advance through a publicly examined charging schedule. Once adopted, they apply automatically.

The charge is calculated per square metre of net additional floorspace. A council publishes a charging schedule that specifies different rates for different types of development and, sometimes, different zones within its area. Residential development in central Wandsworth, for example, is charged at a far higher rate than a warehouse in rural Northumberland. The developer has no room to negotiate — the rate is the rate.

Certain developments are exempt. Self-build homes, social housing, and buildings used by charities for charitable purposes all qualify for relief. Minor developments below 100 square metres of new floorspace are also exempt unless they involve a new dwelling. These exemptions mean CIL primarily hits larger commercial and residential schemes.

For context on how Section 106 works on its own, see our guide to Section 106 agreements.

How do Section 106 and CIL work together?

They coexist. A large housing development in a CIL-charging council will typically pay both: CIL on the total new floorspace, and Section 106 obligations for site-specific requirements. A 500-home scheme in Wiltshire might pay CIL at £85 per square metre toward the council’s general infrastructure programme, while a separate Section 106 agreement secures a new access road, on-site affordable housing, and a contribution to the nearest primary school that will absorb the extra pupils.

The division of labour is conceptually clean. CIL funds strategic, area-wide infrastructure: a new secondary school, a stretch of cycle path, upgraded sewerage capacity. Section 106 handles site-specific mitigation: the things that are necessary to make that particular development acceptable in planning terms. In practice, the line blurs. Both mechanisms can fund education, transport, health, and green space.

Before April 2019, pooling restrictions prevented councils from using more than five Section 106 obligations to fund a single infrastructure project. This rule was designed to push councils toward adopting CIL instead. The government removed these restrictions through amendments to the CIL Regulations, giving councils much more flexibility. Some councils that had adopted CIL partly to get around pooling restrictions now question whether CIL is worth the administrative overhead.

One critical constraint remains: councils cannot use Section 106 to fund infrastructure that is already on their CIL infrastructure list, unless the S106 obligation meets the three statutory tests (necessary, directly related, and fairly and reasonably related in scale and kind). Double-dipping — charging CIL and S106 for the same piece of infrastructure — is prohibited.

Which councils charge CIL?

Roughly 160 of England’s 337 local planning authorities have adopted a CIL charging schedule. Adoption is voluntary. Councils that charge CIL tend to be in areas where land values are high enough that the levy doesn’t make development unviable. Most of London’s 33 boroughs charge CIL, as does the Mayor of London through a separate strategic CIL (known as MCIL2).

The variation in rates is stark. The City of Westminster charges up to £550 per square metre for residential development in its highest-value zone. Wandsworth charges £575 per square metre in parts of the borough around Battersea and Nine Elms. Travel north and the picture shifts dramatically. Hartlepool charges nothing — it has not adopted CIL at all. Barnsley has a zero-rated CIL for most development types, effectively acknowledging that local land values cannot absorb the charge without killing off investment.

Councils in the Midlands and the North that have adopted CIL typically set residential rates between £20 and £80 per square metre. South-east councils outside London sit in the £100 to £250 range. These rates are adjusted annually using the BCIS All-in Tender Price Index, so they creep upward over time without the council needing to go through a new examination.

You can search our database by council to see what each authority has collected through both S106 and CIL.

Where does the money go?

Section 106 money is ring-fenced. The legal agreement specifies exactly what it must be spent on: 30 affordable homes, a £250,000 contribution to highway improvements at a named junction, ecological mitigation on a particular site. If the council doesn’t spend the money within the agreed timeframe — often five to ten years — it must return it to the developer. This has actually happened: Lambeth Council returned over £500,000 in unspent S106 funds in a single year after failing to allocate contributions before their expiry dates.

CIL gives councils more discretion. The charging authority must publish a list of infrastructure types or specific projects it intends to fund through CIL — the “Regulation 123 list” (now replaced by the annual Infrastructure Funding Statement). But the list is broad, and the council is not bound to spend CIL on any particular item. A council might list “education,” “transport,” and “health” as CIL priorities and then allocate the actual funds each year based on current needs.

One distinctive feature of CIL: a meaningful share goes directly to local communities. In areas without a parish council, 15% of CIL receipts from development in that area must be passed to the neighbourhood (capped at £100 per existing council tax dwelling). Where a neighbourhood plan is in place, that share rises to 25% with no cap. Parish and town councils receiving this “neighbourhood portion” can spend it on anything that addresses the demands development places on their area — from a new village hall roof to better street lighting. In unparished areas, the charging authority retains the neighbourhood portion but must consult the community on how to spend it.

See how councils allocate their funds across different spending categories.

How much money are we talking about?

Section 106 dwarfs CIL in total value. Government research published in 2020 estimated that S106 agreements delivered around £7 billion per year in developer contributions, including the value of affordable housing provided in kind. CIL, by contrast, raised approximately £900 million in 2018-19 across all charging authorities.

The gap reflects the nature of the two instruments. S106 captures the cost of affordable housing delivery — by far the largest category of developer obligation — while CIL typically cannot require affordable housing (which is secured through S106 or planning conditions instead). Strip out affordable housing, and the financial contributions from S106 and CIL are closer in scale, though S106 still leads.

At the individual council level, the figures range enormously. Tower Hamlets collects tens of millions of pounds in CIL each year, driven by high-density development in Canary Wharf and the Isle of Dogs. A small rural district might collect £200,000 in CIL and £500,000 in S106 across an entire financial year. The Infrastructure Funding Statements that councils are required to publish annually since 2020 have made these figures much more transparent — and that data is exactly what we compile and make searchable on s106 Tracker.

The future: a single Infrastructure Levy?

The current government has signalled its intention to replace both Section 106 and CIL with a single, mandatory Infrastructure Levy. The proposal, carried forward in the Planning and Infrastructure Bill, would create a flat-rate, non-negotiable charge calculated as a percentage of the development’s final sales value rather than floorspace. The aim is to capture more of the uplift in land value that planning permission creates, while making the system simpler and more predictable for developers and councils alike.

Under the proposed model, the levy would be charged upon completion and sale, not at the point of planning permission. Affordable housing would be delivered “in kind” as a proportion of the development, with councils able to set a minimum affordable housing requirement. The neighbourhood share would be retained, protecting the principle that local communities benefit directly from development in their area.

The timeline is uncertain. The Levelling Up and Regeneration Act 2023 included enabling powers for the Infrastructure Levy, but implementation requires secondary legislation and a “test and learn” approach through pilot authorities. The government has not committed to a date for national rollout. Industry bodies including the Home Builders Federation and the Local Government Association have raised concerns about transitional complexity, the risk of reduced affordable housing delivery, and the challenge of setting rates that work across wildly different property markets.

For now, Section 106 and CIL remain the law. Any transition will take years, and councils will need to run parallel systems during the changeover. Developers with existing planning permissions will likely be dealt with under the old rules.

Section 106 vs CIL: comparison table

Frequently asked questions

Can a developer pay CIL instead of entering into a Section 106 agreement?

No. They serve different purposes and a developer may be liable for both. CIL is triggered automatically by the size and type of development. Section 106 is triggered by the need to mitigate the specific impacts of a particular scheme. A residential developer in a CIL-charging borough will pay the levy on their net new floorspace andnegotiate S106 obligations for things like affordable housing, which CIL cannot deliver. The only scenario where paying one reduces the other is when a council allows S106 costs for certain infrastructure types to be offset against CIL liability, but this is uncommon and must be set out in the council’s policies.

Do homeowners pay Section 106 or CIL when they extend their house?

Almost never. Householder extensions and alterations are exempt from CIL. Section 106 agreements attach to planning permissions for larger developments, not domestic extensions. The only exception is if an extension creates a new self-contained dwelling (converting a house into two flats, for instance), which might trigger CIL depending on the council’s charging schedule — though self-build exemptions may still apply. For ordinary loft conversions, rear extensions, and similar projects, neither mechanism applies.

How can I find out what my council has collected and spent through S106 and CIL?

Since December 2020, every local planning authority in England must publish an annual Infrastructure Funding Statement (IFS) reporting how much it has collected, allocated, and spent through both Section 106 and CIL. These reports are published on each council’s website, usually within their planning pages. We compile this data for all 337 authorities and make it freely searchable — search by council name or postcode to see the figures for your area.