Ministers promise new guidance to help councils adopt infrastructure levy

BUDGET 2018: The government has said it will publish new guidance to help local authorities 'adopt and revise' Community Infrastructure Levy (CIL) charging schedules, as well as consider further legal changes to 'improve the operation of the levy'.

New infrastructure: MHCLG outlines changes to developer contributions towards infrastructure
New infrastructure: MHCLG outlines changes to developer contributions towards infrastructure

The announcement was made in the Ministry of Housing, Communities and Local Government's (MHCLG's) response to its consultation on developer contributions in March. The response, published yesterday, sets out a series of changes to CIL and section 106 planning gain agreements.

One of the changes the MHCLG said it will take forward is to remove restrictions that prevent councils using section 106 money to contribute towards infrastructure itemised on their "regulation 123 lists", which outline the items they intend to fund through CIL.

The ministry also said it will remove restrictions preventing councils from pooling their section 106 contributions from different schemes to pay for new infrastructure.

According to the document, the consultation responses signalled a need for improved guidance, "particularly to help provide local planning authorities with certainty around the level of detail needed in establishing an evidence base" to implement CIL charges.

It states: "The government therefore intends to take forward the proposals on which it has consulted by making changes to guidance. This will support local authorities to adopt and revise CIL charging schedules. In developing guidance, the government will consider issues raised, to ensure that levy data requirements do not create unnecessary delays to plan-making." 

Elsewhere, the document says the government will "also continue to consider changes to guidance and legislation that may be required to improve the operation of the levy, including in relation to issues raised by respondents". 

The document states that the MHCLG will:

  • Require reporting of CIL and section 106 income and spending through new statutory "infrastructure funding statements", in an effort to improve transparency.
  • Consult on changes to indexation of CIL rates, proposing that rates for residential development are linked to the house price index and rates for non-residential development linked to the consumer price index. 
  • Retain current exemptions from CIL, such as for self-builders, and look at ways to make it easier for claimants to claim an exemption. 
  • Change the penalties for failing to submit a commencement notice before development starts, to "ensure that any penalty is set at a proportionate level and will not result in the whole liability becoming payable immediately". 
  • Remove the requirement for councils to subject their draft CIL charging schedule to two separate rounds of consultation in all cases. 

However, there was no mention in the response of a suggestion floated in the March consultation, which said that the government was looking at whether developer contributions could "be set nationally and made non-negotiable".

Duncan Field, head of planning at law firm Norton Rose Fulbright, said: "There are some helpful changes to CIL in these proposals, such as the removal of pooling restrictions on section 106 agreements. 

"However, it is difficult to escape the conclusion that demanding more of CIL and making yet more changes to the CIL regulations will add even further complexities and create more of the practical issues which have dogged CIL since its introduction."


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