Following a Community Infrastructure Levy review which began in late 2015, with the findings being published in a report in early 2017, the Government have now made changes to the CIL regulations via The Community Infrastructure Levy (Amendment) (England) (No2) Regulations 2019 implemented on 1st September 2019.
The Community Infrastructure Levy (CIL) is a planning charge first introduced by the Planning Act 2008 which came into force in April 2010 via the Community Infrastructure Regulations 2010, it is an important tool for local authorities to enable them to deliver their infrastructure requirements to support development within their local area. A local authority must consult on any proposed levy rates and these must be approved and a charging schedule be published before the levy is formally in place.
Development is potentially liable for CIL if it would create a net additional floor space of 100 square metres or more, or creates a new dwelling. There is an opportunity to claim relief or exemption from the levy but set criteria must be met and procedures followed for this to occur.
CIL Review Group
In November 2015 the CIL review group was set up with a specific purpose to:
“Assess the extent to which CIL does or can provide an effective mechanism for funding infrastructure, and to recommend changes that would improve its operation in support of the Government’s wider housing and growth objectives”.
In summary, the remit of the group was to look at the following:
(i) The relationship between CIL and Section 106 agreements in delivering infrastructure.
(ii) The impact of CIL on development viability.
(iii) The exemptions and reliefs from CIL.
(iv) The administration and governance associated with charging, collecting and spending CIL.
(v) The ability of CIL to deliver infrastructure in a timely and transparent way.
(vi) The impact of the neighbourhood portion on local communities’ receptiveness to developmental.
(vii) The geographical scale at which CIL is collected and charged.
Following examination and in consideration of the consultation responses received the key issues were identified in a report published in February 2017 as follows:
(i) A number of local authorities had decided not to introduce CIL at all with the outcome being a heavier reliance on Section. 106 than originally expected. This has also resulted in a number of smaller developers who could afford to make some contribution not being required to pay.
(ii) The amount of CIL raised overall has been much less than originally anticipated and hasn’t been helped by exemptions.
(iii) Where CIL has been produced it had not necessarily worked well for larger sites with complex site-specific mitigation requirements.
(iv) The burden and risk of providing CIL lay with local authorities who may not be well placed to deliver infrastructure in a timely manner.
(v) Necessary infrastructure has not been provided upfront when it is needed to support the earlier stages of development because further CIL money was awaited.
(vi) Where developers were continuing to make traditional S.106 payments difficulty was caused by pooling restrictions for large items of infrastructure that needed to be funded by more than five planning obligations.
Overall, the report concluded that the adoption of CIL did not meet the initial intention of a faster, fairer, simpler more certain and more transparent means of ensuring that all development contributed towards infrastructure need. It was also found that CIL did not compliment S.106 arrangements but rather caused complications and disruptions to them.
The CIL Regulations 2019
The Community Infrastructure Levy (Amendment) (England) (No2) Regulations 2019 which came into effect on the 1 September 2019 is not wholly responsive to the findings of the review group but does make some notable changes summarised as follows:
(i) The removal of Pooling restrictions has occurred which no longer limits the number of contributions from Section 106 agreements to five.
(ii) Monitoring fees have been reviewed and a monitoring fee can be included if it is fairly and reasonably related in scale and kind to the development and does not exceed the local authority’s estimate of its cost of monitoring the development over the lifetime of the related planning obligations.
(iii) The loss of exemption due to failure to serve a commencement notice has now been replaced with a surcharge.
(iv) In the interests of transparency, there is now a requirement for local authorities to publish an annual ‘infrastructure funding statement’ these will replace existing 123 lists. These should include details of money raised by developer agreements for both CIL and S.106 agreements.
(v) Due to uncertainty in how charges should be applied further to a Section 73 permission, amendments have been made to clarify in essence only additional floor space will now be charged at the latest index rate with the previous floor space charged at the rate in place when the original development was first permitted.
(vi) A requirement has also been introduced to undertake consultation if a local authority is considering ceasing CIL charges.
A link to the CIL Regulations can be found here.
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