The notoriously difficult Community Infrastructure Levy (CIL) regime is due to be simplified when new regulations come into effect from September 1.
Mark Turner, a solicitor in our Town and Country Planning Department, has been looking at the changes and what it will mean for those affected:
CIL was introduced in 2008 and allows councils to charge developers sums to help pay for infrastructure which supports the development of their area. It can only be charged if a council has introduced a Charging Schedule - Shropshire Council was one of the first to do that in 2012 with Dudley and Walsall authorities following relatively recently. Wolverhampton and Telford & Wrekin Councils have not yet introduced CIL – they say it remains under review.
CIL can be charged in addition to obligations, which councils might secure by way of a Planning Obligation (or s106 Agreement) (such as contributions towards affordable housing or education).
There are various exemptions to CIL, including the self-build exemption for those building their own homes; however, to claim the exemption the relevant forms and notices must be submitted to the council, and received by them, at the right time, and the council must have confirmed that the exemption has been granted.
The system is notoriously tricky to understand and apply and developers (particularly self-builders and small scale developers) often find themselves caught out and face large financial penalties, in some cases even when the rules have been followed (if the council does not receive a notice at the right time, regardless of whether it has been sent to them, it can be very problematic).
The latest changes to the system aim to make it less complex and more transparent, with the Government hoping that developers will get development started more quickly and help meet the Government’s ambition to deliver 300,000 extra homes a year by the mid-2020s. The main changes are as follows:
- removing provisions that resulted in reliefs from CIL (e.g. the exemption for self-builders) being lost entirely, if a notice was not submitted before starting the development. Going forward, a surcharge will be imposed instead. This change is aimed at making the system fairer by removing disproportionate penalties, which particularly affect smaller developers and householders;
- removing the "pooling restriction" which prevents councils from entering into more than five s106 obligations in order to fund a single infrastructure project. It is hoped that this change will address barriers which could otherwise prevent development, and to allow councils to fund single, larger infrastructure projects from the cash received from multiple developments, allowing them to deliver complex projects faster;
- making it easier for councils to introduce CIL and giving them more flexibility to amend their Charging Schedules to take account of changes in viability and local housing market conditions;
- requiring councils to publish an annual statement setting out how much CIL has been collected, how much is spent and what it is spent on. It is hoped that this change will increase transparency for communities and developers, clearly showing how contributions are being used;
- new methods for calculating the levy payable where a planning permission that has been granted is varied.
The changes are welcome, but the regulations remain fiendishly complex, and appeal cases have shown that they are to be applied to the letter – there is no scope for negotiation.
If you require advice about CIL or any planning matter please contact Mark or a member of the planning team.
Mark specialises in a variety of matters including planning applications, appeals, hearings and inquiries, matters involving heritage assets, compulsory purchase matters and judicial reviews, and section 106 agreements. For further advice, please contact him on the details below.