Q What new restrictions on councils’ ability to enter into planning agreements are being introduced?
A Changes to the Community Infrastructure Levy (CIL) Regulations limiting the ability of local planning authorities to pool section 106 contributions take effect on 6 April, with potentially unintended consequences.
Around 20 per cent of planning authorities in England and Wales have adopted a CIL charging schedule, but all the others continue to collect developers’ contributions to infrastructure using section 106 obligations. The revised regulations will soon place a limit on councils’ ability to pool more than five section 106 contributions towards a single item of infrastructure or infrastructure pot.
From 6 April, councils will be prevented from taking planning obligations into account as a reason for granting planning permission where more than five such obligations are funding the same item of infrastructure. In calculating the number of such obligations, all those entered into since 6 April 2010 have to be considered.
Q What is the legal background to these restrictions?
A The provision stems from the original CIL Regulations 2010, which implemented the levy as enacted in the Planning Act 2008. It was included as a means of encouraging councils to adopt CIL schedules in place of using section 106 agreements. However, even though the deadline has been extended from the original date, far fewer authorities have adopted charging schedules than was originally expected.
Q Why is the government taking this step now?
A It was widely expected that the deadline would be pushed back again in the 2015 Budget. The fact that the date has not been changed will be viewed as another limit on the use of section 106 agreements.
Q What are the implications for local authorities, and how can they minimise the effects?
A While the obvious answer may be for local planning authorities to adopt a CIL charging schedule, this will not suit all of them. Many authorities are concerned that adopting CIL may deter investment in their area and reduce their ability to prioritise affordable housing.
If pooled obligations are going to survive, some more sophisticated solutions may be needed. One option would be for planning authorities without a CIL schedule in place to take a more focused approach to specifying developer contribution infrastructure pots. Each smaller pot would then be able to take up the maximum number of pooled contributions. For example, a developer could make a contribution to a specific classroom in a school rather than simply contributing to the expansion of the school.
A more creative solution might see developers making voluntary contributions or authorities taking contributions into account only as a reason not to refuse planning permission, rather than taking them into account as a reason for granting permission. However, this would require a very careful application of the regulations if councils are not to fall foul of their requirements.
Q What are the implications for developers?
A Developers will be concerned that there could be circumstances where a proposed development requires mitigation through contributions towards a larger infrastructure pot, no CIL charging schedule has been adopted and the maximum contributions towards infrastructure have already been received by the council. In that situation, local planning authorities may feel compelled to refuse planning permission for developments that they might otherwise want to allow on the basis that there is no mechanism for addressing the adverse effects on local infrastructure.
John Bosworth is a partner at law firm Ashfords