Draft levy regulations offer clarity in some areas, complexity in others, by Richard Garlick

Just before Christmas, the government issued draft regulations for amending the Community Infrastructure Levy (CIL), the charge that councils can apply to development, and the broader developer contributions system (see News Analysis p09).

This is the latest of a series of consultations and re-consultations, with many radical ideas ditched along the way. At one stage, the Ministry of Housing, Communities and Local Government was considering introducing a non-negotiable developer contributions that would be set nationally. That idea has not made it into the regulations. Nor have proposals in an earlier consultation to "legislate to take forward proposals … to allow local authorities to capture increases in land value where this is justified by infrastructure needs" been carried forward – so far. Those who are keen to see the public purse secure a larger slice of the land value uplift generated by planning permissions must wait for promised guidance intended to help planning authorities use CIL to achieve this.

Instead, the draft regulations, which cover England only, comprise a series of more modest tweaks. If approved, they would remove the pooling restriction which prevents local authorities from using more than five section 106 obligations to fund a single infrastructure project. They would also remove the 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.

With the aim of allowing CIL rates to more closely track the value of development, the regulations propose a change in the indexing system. At the moment, CIL regulations stipulate that charges should rise in accordance with construction cost inflation provided by the Royal Institution of Chartered Surveyors’ Building Cost Information Service. The new regulations instead propose that house price inflation be used to index residential CIL charges, with consumer price inflation used for non-residential schemes.

Among other tweaks, the draft regulations also exempt starter homes for young first time buyers from the levy, and clarify that local planning authorities can seek a sum as part of a section 106 planning obligation for monitoring planning obligations.

The changes don’t sound revolutionary, but some have suggested that the removal of section 106 pooling restrictions is likely to cool many authorities’ interest in continuing with the levy. However, others point to the regulations’ requirement that local authorities should consult before removing an adopted CIL, which they say will make it harder for councils to drop the charge in favour of relying solely on section 106.

The consensus seems to be that, while the draft regulations offer clarity in some areas, they add to complexity in others.

The next print edition of Planning appears on 15 February. Weekly email editions will be published on 25 January, 1 February and 8 February.

Richard Garlick, editor, Planning // richard.garlick@haymarket.com

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