Legal Viewpoint: Levy regime at crossroads as review gets under way

The government has announced its long-awaited community infrastructure levy (CIL) review. This is timely, with CIL take-up patchy at best. While much of the south, and London in particular, has adopted charging schedules, large swathes of the north have yet to engage with CIL. There are reasons for that, and it will be interesting to see whether reforms affect this.

The arrival of CIL in 2010 was underpinned by four key tenets – speed, fairness, certainty and transparency. These qualities were considered absent from the section 106 planning obligations regime. We are now asked to reflect upon whether these objectives have been – and can be – realised.

What is the key driver behind the review? Perhaps there is a clue in its linking of future improvements to CIL with supporting the government’s wider housing and growth objectives. Once again growth and housing take centre stage, in familiar rhetoric exemplified by this summer’s productivity plan. One wonders whether there is now a hierarchy in play within those basic tenets. After all, the political and economic landscape in 2015 is much changed from 2010. Does speed now sit proudly atop?

The review panel’s terms of reference (Planning, 4 December, p33) are wide ranging. It will assess the extent to which CIL does or could provide an effective mechanism for funding infrastructure. The focus is on several key areas – infrastructure, viability, charge-setting, the regulations themselves as amended, -accompanying guidance, neighbourhood issues and a catch-all assessment of its overall operation. No doubt a multitude of anecdotal evidence will be submitted to demonstrate that many of those areas are compromised in practice.

The more compelling challenge lies in fixing those problems. Could the complexity of the CIL regulations – and some notable inconsistencies in the guidance – be addressed with further legislative amendments? Or is fresh primary legislation required? Is the effectiveness of CIL hampered by the geographical divergences in its take-up? If so, will this naturally resolve itself as the public and private sectors become more familiar with its intricacies and procedures? Will the often uneasy relationship between section 106 agreements and CIL become less pronounced if and when CIL receives greater national coverage?

We may never find out. Time is a precious, given the government’s relentless drive for growth and housing delivery. One thing is clear – submission responses will inform a report to ministers by April 2016. If CIL finds itself at a crossroads now, clarity over its future direction is on the horizon.

Jamie McKie is a senior associate at Dentons

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