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17/01/2019

Legal landscape: How will CIL evolve in 2019?

The community infrastructure levy is one of the more contested areas of planning. Katherine Evans reads the runes to consider how it is likely to change over the next 12 months

Ensuring that developers contribute to the infrastructure required as a result of their schemes is an important consideration for local planning authorities. The Community Infrastructure Levy (CIL) was introduced in April 2010 – a planning charge aimed at developers to help raise funds for these purposes.

A local authority can only charge CIL if it has adopted a charging schedule. But the government’s view is that the protracted procedure for adopting a charging schedule is a major barrier and one reason why CIL is not used in many areas.

Simplifying this process is just one of the reforms on the horizon for 2019.

Section 106 pooling requirement

Since April 2015, local authorities have not been able to fund an infrastructure project or type of infrastructure by pooling contributions from five or more separate section 106 agreements. This was designed to encourage local authorities to adopt CIL charging schedules, however, in some circumstances it can stifle development.

We are going to see a lifting of the pooling restriction in all areas. However, so that CIL remains an effective mechanism, the government will put measures in place to incentivise the uptake of CIL. There is no indication yet of what those measures will be.

Greater flexibility in relation to exemptions

If a commencement notice is not submitted before the development begins, entitlement to CIL relief is lost. Anyone not accustomed to dealing with CIL can inadvertently miss out. The introduction of a two-month ‘grace period’ was mooted, but this has been rejected owing to the complications and increased administrative burden this would introduce. Instead, we are likely to see a modification of the penalties for failing to submit a commencement notice before development is started so that these are ‘proportionate’ and do not result in total loss of the exemption.


In brief

  • The ‘protracted procedure’ for adopting CIL charging is a barrier to take-up.
  • Potential reforms aim to make it easier for authorities to adopt CIL.
  • These will seek to balance the interests of developers and local authorities.
  • Measures may include: making it easier to claim CIL relief, resolving tensions in indexation of CIL rates; standardising reporting on infrastructure spending, and enabling combined authorities to pool CIL contributions.

Indexation

In 2018 the Community Infrastructure Levy (Amendment) Regulations 2018 came into force. These clarify what should be done in relation to permissions granted under section 73 of the Town and Country Planning Act 1990.

But there is still concern that the indexation provisions in the CIL regulations are underperforming. CIL charges are indexed to the Building Cost Information Services (BCIS) All-In Tender Price Index. This reflects changes in contractor costs and is used to account for changes in the costs of delivering infrastructure. However, house price inflation does not rise at the same rate as contractor costs. 2019 will see a consultation on changes to the indexation of CIL rates.

Regulation 123 lists

Regulation 123 of the CIL regulations 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. Although charging authorities are required to report annually on how much CIL has been received and how it has been spent, the depth of information varies.

Viability guidance now sets out the government’s recommended approach to reporting through an Infrastructure Funding Statement – a standard template that includes anticipated contributions from both CIL and section 106 obligations, together with how these will be used.

The government will also make it clear that local planning authorities can seek a fee from applicants to cover the costs of monitoring planning obligations.

Strategic Infrastructure Tariff (SIT)

A SIT is intended to work in a similar way to Mayoral CIL:

  • Combined authorities with strategic planning powers will be able to take forward a SIT; and
  • Groups of charging authorities will be encouraged to use existing powers to deliver strategic infrastructure through a pooling of CIL receipts.

The latter will only be effective where neighbouring authorities have CIL charging schedules in place.In the longer term, the government intends to allow joint planning committees to charge SIT, and will review options to expand this further.

Katherine Evans is partner and head of planning at TLT

Image credit | iStock

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