Last week the Government issued its response to a technical consultation on reforming developer contributions together with draft amendment regulations which will amend further the Community Infrastructure Levy Regulations 2010 (the Regulations)
The Government’s response and the draft amendment regulations (which are due to come into force on 1 September 2019) can be accessed in full at the website links below:
https://www.gov.uk/government/consultations/developer-contributions-reform-technical-consultation
http://www.legislation.gov.uk/ukdsi/2019/9780111187449
There are the following important reforms to Community Infrastructure Levy (CIL) to be aware of under the draft amendment regulations:
- The process for a charging authority adopting CIL has been simplified. Charging authorities are currently required to undertake two rounds of consultation on proposed CIL rates before they can introduce or revise CIL, however this requirement has been removed and a single round of consultation will now apply. Neighbourhood Forums have also been added to the list of consultation bodies
- There is currently a restriction on local authorities such that they are unable to fund an infrastructure project or type of infrastructure by pooling contributions from 5 or more separate Section 106 agreements. This pooling restriction is to now be removed and charging authorities will be allowed to use both CIL and Section 106 contributions to fund the same item of infrastructure
- Regulation 123 of the Regulations currently provides for charging authorities to set out a list of those projects or types of infrastructure that it intends to fund, or may fund, through CIL (these are commonly known as ‘Regulation 123 Lists’). Regulation 123 Lists will be replaced with a requirement for local authorities to provide an annual infrastructure funding statement by 31 December each year
- The Regulations currently allow for certain development (such as residential extensions and self-build housing) to be exempt, or gain relief, from CIL. In most cases a developer must submit a commencement notice to the charging authority prior to the start of works as this determines the start of the clawback period, during which an exemption can be removed if a disqualifying event occurs. Failure to do so results in the exemption or relief being removed, and the full chargeable amount becoming payable. The Regulations will now be amended to introduce a more proportionate penalty: whichever is lower of a surcharge of 20% of the chargeable amount, or £2,500
- If a change to a planning permission pursuant to a Section 73 application is granted in relation to a chargeable development in an area where there was a charging schedule in effect when the development was first permitted, the current Regulations result in the new liability for the entire floorspace of the development being calculated at the latest indexed rate. This can result in developers being charged more, because of indexation, for floorspace for which they have already paid CIL. The Regulations are now to be amended to seek to avoid a new liability for the entire floorspace of the development being calculated at the latest indexed rate where a Section 73 application is granted. The Regulations will ensure that any increases in liability resulting from a Section 73 application are charged at the latest rate, including indexation, while previously permissioned floorspace continues to be charged at the rate/rates in place when those elements of the development were permissioned
In addition to the above changes to CIL under the draft amendment regulations, the Government has also announced that it intends to introduce legislation later this year to exempt starter homes from CIL
Our lawyers at Planning Clarity Legal have significant experience in advising on CIL since it was first introduced and if you have any legal queries regarding CIL please contact us
Note: all comments and views expressed in this blog are merely opinions and provided for information purposes only and do not constitute legal advice which can be relied upon. Should you require legal advice on a matter then please contact us
