What the new requirement for councils to publish infrastructure funding statements means for you

A new requirement for councils to produce and maintain statements detailing developer contributions funding and spending will place new burdens on them, observers predict, but will also present opportunities for both authorities and applicants.

New homes: developer contributions changes on the way
New homes: developer contributions changes on the way

Earlier this month, the new community infrastructure levy (CIL) regulations, which come into force on 1 September this year, were laid before parliament. Among the key changes (see panel below) is a new requirement for local authorities to annually publish "infrastructure funding statements".

The statements will replace existing Regulation 123 lists, which outline the infrastructure projects a local authority intends to fund through CIL. The regulations state that the documents should include details of how much money has been raised through developer contributions, both from CIL and section 106 planning gain agreements, and how it has been spent. Statements must be published on council websites at least once a year and councils will be required to publish their first statements by 31 December 2020.

In its response to the consultation on changing the system of developer contributions, the Ministry of Housing, Communities and Local Government (MHCLG) said the new statements "will increase transparency to ensure that it is clear how the levy and planning obligations have been spent" and "provide a more appropriate mechanism for considering how the levy and planning obligations are used together". It also promised new guidance detailing how councils should produce their statements.

For the first time, councils now have a legal duty to report on section 106 payments in their infrastructure funding statements, said Rob Krzyszowski, head of planning policy, transport and infrastructure at Haringey Council. "Although many will have reported on them before, this is now an explicit legal requirement," he said. In addition to financial information, the new regulations also state that details should be provided on other elements of section 106 agreements, specifically on affordable housing contributions and the number of school places provided.

Gilian Macinnes, a consultant and former member of the government's CIL review panel, said: "The requirement for saying what you aim to spend CIL on will hopefully be clearer than the current regulation 123 lists. It should be clearer to identify  projects that you are giving spending priority to, rather than a list of everything."

The government's stated aim is to boost transparency around how developer contributions are spent, which some consultants and lawyers believe should assist developers by helping to reduce opposition to new schemes. Planning lawyer Alex Ground, a partner at Russell-Cooke, said: "They should help local communities see the benefits that new development can bring, therefore making them less opposed to new development in principle, with objections focused just on specific identified harm. The reforms should be helpful to the delivery of more homes."

Jason Lowes, partner in the planning team at consultancy Rapleys agreed, saying the statements "may help to communicate far more powerfully the benefits of development to local communities", and help balance the typical been a focus on the "negative impacts of development." Developers should also "welcome greater clarity over how their contributions are spent", he added.

Krzyszowski warned that producing and maintaining the new statements will impose an additional burden on councils, and forecasts that they may need to add a dedicated member of staff. However, the regulations also make it clear that authorities will be able to use section 106 moneys for administration and monitoring purposes, which should offset the additional costs. "That has always been a grey area until now, said Krzyszowski. "It’s good to have that explicit mention."

Rachael Ferry-Jones, principal consultant at the Planning Advisory Service, said: "While the annual infrastructure funding statement will place additional requirements on local authorities, it presents a real opportunity for them to work proactively with infrastructure providers and communities to set out in a clear and transparent manner the infrastructure that they have, and may be funding through CIL and section 106 planning obligations."

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