A NEW tax on developers could raise more than £13 million a year for Bristol City Council.

The Government is scaling back the existing system and replacing it with a system that charges developers for each new home they want to build.

Under the current arrangement, developers negotiate a financial deal with councils to offset the pressure put on communities by bringing new people into an area.

These so-called section 106 agreements provide money for improvements to local education, parks and recreation, public art, highways improvements or libraries.

But a trend has developed since the financial downturn of developers successfully negotiating reduced deals.

Now the Government is largely replacing section 106 with a Community Infrastructure Levy (CIL), which will see a flat rate per house.

Some section 106 agreements are expected to remain, covering affordable housing and developments that make specific impacts, such as harming wildlife.

But CIL will become the main source of money councils can secure from developers that can be used to help fund local improvements.

Councils have leeway in terms of how much the CIL charge is, and so Bristol has put out a set of proposals for consultation.

Developers will be expected to pay more to build homes in the inner city compared to the outskirts.

The exception to this rule is in Easton, Ashley and Lawrence Hill as there is less development in these parts of the city. The inner zone charge will be £70, compared to £50 per house in the outer zone.

The inner zone stretches from Bishopston in the east to Sneyd Park in the west, the River Avon in the south and just north of Westbury-on-Trym.

There will also be higher charges for student accommodation (£100) and shops (£120). Hotels will be charged £70 and other developments will pay £50. Developments for the emergency services and institutions won't have to pay the fee.

The first income is expected to be generated in 2013.

Not introducing the CIL charge will cost the council a huge amount of income, it has been claimed.

In a report to councillors, officer Graham Sims said: "This approach would result in the level of developer contributions the council could secure reducing by approximately 70 per cent from April 2014.

"This is because the council would not be able to use a tariff-based approach after that date, and it would only be able to secure funding for site-specific mitigation.

"There would be no developer funding available for infrastructure projects to support growth.

"Given the significant shortfall in funding for infrastructure projects, and the potential for CIL to be used to contribute towards such projects, the option of not introducing CIL was discounted, as it would have a significant adverse effect on council funding streams for the delivery of infrastructure."

The Liberal Democrat cabinet are due to approve the proposals at a meeting on Thursday. Consultation runs from March 2 until March 30.