Part 13: General Schedule 12: Infrastructure Levy Part 10A, Section 204N: Application Effect
Subsection (1) provides that IL regulations must require the charging authority to apply IL to supporting the development of an area by funding the provision, improvement, replacement, operation or maintenance of infrastructure.
	A new provision is set out in subsection (2) to enable regulations to make provision about the extent to which charging authorities may or must apply of IL receipts to funding specific types of infrastructure. For example, provision could be made under this subsection ‘ring-fencing’ a proportion of a charging authority’s IL receipts to be applied towards specific infrastructure – for instance, specifying that a minimum amount of IL receipts must be spent on providing affordable housing in an area or on roads.
	There is a non-exhaustive list of what is considered to be ‘infrastructure’ in subsection (3), which includes roads, schools, medical facilities and affordable housing (as defined in Part 2 of the Housing and Regeneration Act 2008 or any other description of housing that IL regulations may specify – see new section 204A(4)). Subsection (4) provides powers for IL regulations to amend this list and therefore, provides powers to guide the kinds of infrastructure which are captured within the IL context, at a national level.
	Subsection (5) is a new provision that provides for regulations to set out the circumstances where charging authorities would be allowed to spend a specified amount of IL on items that fall outside the requirements of subsection (1), for example, on non-infrastructure items.
	Subsection (6) provides further powers relating to the application of IL receipts. For example, it enables IL regulations to specify further details of what may or may not be funded by IL for the provision, improvement, replacement, operation or maintenance of infrastructure. Regulations may also specify what may or may not be funded by IL when the provisions of new section 204O or 204P apply, (meaning where IL regulations allow IL to be used to fund anything that is concerned with addressing demands that development places on an area). Subsection (6) also provides powers for regulations to specify what is or is not to be treated as funding.
	Powers are provided in subsection (7) to require charging authorities to prepare lists of projects which they propose will be funded by IL. Under this provision, IL regulations could require charging authorities to prepare a list of infrastructure to be funded through IL and, by exemption from that list, infrastructure that developers should expect to fund and provide outside of IL. This can be provided through the charging authority’s infrastructure delivery strategy, as set out in new section 204Q. Subsection (7) also includes provision for setting out the circumstances in which IL can be spent on projects which are not listed.
	Subsection (8) is a list of the kind of provision which may be made by IL regulations when making provision about funding. It includes powers to permit IL to be used for the reimbursement of expenditure already incurred and for the giving of loans, guarantees and indemnities.
	Under subsection (9), regulations may:
require separate accounting of revenue from IL;
require monitoring and reporting on IL;
permit a charging authority to spend IL outside its own area (for example, on infrastructure which supports development of the charging authority’s area but which is itself located outside the charging authority’s area); and
permit a charging authority to pass money to another body (for example, in a two-tier area where a district council is the charging authority, to pass IL receipts to the county council as highway authority to deliver road infrastructure improvements).
Example (1): Allowing local authorities to borrow funds to deliver infrastructure
Subsection (8) gives a power for the relationship between IL and local authority borrowing to deliver infrastructure, to be set out in regulations. Provision made under this power could allow local planning authorities to borrow against future IL receipts in order to deliver infrastructure at the right time to support development. Authorities could be permitted to borrow money from the Public Works Loan Board or other funding sources, against future IL receipts, thereby using IL money as a reimbursement of the expenditure already occurred.
Example (2): Reporting on how receipts are spent
Subsection (9)(a)-(f) will enable regulations to set how charging authorities (and, potentially, anyone to whom IL receipts have been passed) should report on the expenditure of IL, including what proportion of receipts has been passed to other bodies, for example parish councils.