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09/07/2020

Planning during a pandemic - the CIL regime

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Some form of CIL relief wiil go a long way to kickstarting development in the wake of Covid-19, says Julia Berry

The government has announced that help for the CIL regime may be on its way, but it looks as though assistance may be limited to deferral of payments and waiver of interest penalties.

There are several options councils and the government should be exploring. The first is a blanket scheme of payment postponements for set periods, or a more bespoke approach commensurate with the delays an individual project has experienced, agreed at a local level. A more challenging answer could involve changes to the tariffs themselves or creative discounts to encourage delivery of targeted projects, conditional on targets being met with regard to start, progress and delivery.

Some authorities have announced a delay to payments by reissuing demand notices already served, coupled with suspending debt recovery and enforcement. There is no statutory basis for these actions in the regulations, so they cannot be formally relied on until new legislation is forthcoming.

One answer may be the extended use of exceptional circumstances relief. This allows authorities to offer relief “where a person responsible for a specific scheme cannot afford to pay the levy”. Currently, this is not automatic. It only applies where a charging authority has given formal notice that the relief is available. Each claim has to be considered individually, but only where a section 106 agreement is in place and the development has not yet begun. The charging authority has to be convinced that the full levy would have an unacceptable impact on viability.

“Some form of CIL relief would be of long-term benefit to developers and councils”

Pre-coronavirus, this was little used but future claims could become more frequent. This procedure will not help schemes already under way, and it is subject to the authority’s discretion.

A government keen to kick-start development could apply it auto-matically to all developments, at whatever stage they are.

A right to review negotiated s.106 contributions where viability has fundamentally changed could also be reintroduced.

Phased developments will benefit from phased payments, however, this phasing must be set out within the consent itself and cannot be retrospectively engineered. Many authorities allow payment by instalments, which could be extended, but this is entirely discretionary.

With far-reaching assistance afforded to many other sectors, and development an important catalyst for economic recovery and growth, some form of CIL relief would be of long-term benefit to developers and councils alike.

Julia Berry is consultant solicitor at Reed Smith LLP

Image credit | iStock

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