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New year, new CIL regulations


By Penningtons Manches


Sponsored feature | By Tim Johnson, Penningtons Manches

Section 106 agreements are frequently used in new developments (6772199)
Section 106 agreements are frequently used in new developments (6772199)

The Community Infrastructure Levy regulations (CIL) have been with us since 2010 and already there have been six subsequent amendments.

In December, the government published draft regulations with the consultation period closing January 31, 2019. Unfortunately, the draft regulations merely amend the existing 2010 version rather than consolidate. Below we summarise the major changes - of interest to anyone involved in the development of land, small or large.

Pooling

Regulation 123 is to be omitted. The pooling and other restrictions on the use of section 106 have always been difficult for local authorities and have caused issues on larger developments when required CIL funded infrastructure could not be guaranteed to be brought forward in time or at all.

The problem: it paid little regard to the realities of infrastructure funding, especially for larger developments. Funds received are not ringfenced and there isn’t any certainty that the works supposed to be funded will come forward, which the courts have stated can be a reason for refusing planning permission. This is harsh when CIL will have been paid based upon the need for the works in question. The changes raise a real issue of double payment though section 106 and CIL.

Indexation

CIL indexation provisions have always caused headaches. The 2018 amendments sought to ‘clarify’ these provisions, but more changes are recommended.

Whether the existing regulations were inconsistent or just unfathomable is arguable, but the clarification is welcome. The proposed change is as follows: where a section 73 planning permission reduces or makes no change to the chargeable area CIL will not, as a result of indexation, be greater than that payable under the parent permission; it may be less.

There are some other detailed changes, such as a proposal for two indices, one for residential and one for other developments. A capture of profits? But CIL is meant to be about funding costed infrastructure, which does not have differential costs.

Monitoring fees

The proposal is to allow for the payment of monitoring fees in section 106 agreements. We have some concerns about how it is calculated and the fact that the fee is for monitoring the development rather than just the planning obligations.

Starter homes

There are changes to the relief for starter homes, closing a loophole.

Conclusions

This is not the hoped-for rewrite of the CIL Regulations. They remain a complex and highly technical piece of legislation, one that seems to be heading further down the road of an out and out tax on development and that is still arguably unfit for purpose.

Tim Johnson is a planning partner at law firm Penningtons Manches. PIcture: Simon Denton (6772555)
Tim Johnson is a planning partner at law firm Penningtons Manches. PIcture: Simon Denton (6772555)

Tim Johnson is a planning partner at law firm Penningtons Manches. Contact him at tim.johnson@penningtons.co.uk or call 020 7872 8590.

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