In September 2019, the Ministry of Housing, Communities and Local Government (MHCLG) updated its Planning Practice Guidance (PPG) on the community infrastructure levy (CIL). In November, it published five more PPG updates on air quality, light pollution, education contributions, healthy and safe communities, and hazardous substances.
Community Infrastructure Levy
The CIL PPG has been updated to reflect new regulations that came into force on 1 September. Key changes affecting local authority monitoring and reporting of planning regulations, revenue spending and setting rates are outlined below.
Monitoring and reporting
What has changed?
By 31 December 2020, local planning authorities will be required to publish annual "infrastructure funding statements", replacing regulation 123 lists, which outline infrastructure projects that a council intends to fund through CIL. The government hopes they will increase transparency around how developer contributions are spent. According to a new section of the guidance, the funding statements should explain how much money has been raised through developer contributions (both CIL and section 106 planning gain agreements), how this has been spent and on what the council plans to spend future revenue. The regulations state that authorities will be able to use section 106 money for administration and monitoring purposes to offset any additional costs.
Planning consultant Gilian Macinnes says regulation 123 lists were "fairly universally misunderstood" and the new statements "should be a more useful and transparent approach for local authorities to set out their developer contribution monitoring and intentions". Macinnes believes the new statements will create more work for councils in the short-term, though this will depend on their "current approach to monitoring and transparency". Nigel Dexter, national CIL coordinator at consultancy Savills, suggests that the statements may help applicants negotiate with a local authority over section 106 because they will be able to see how other developments have been treated in the past.
Spending of CIL revenue
What has changed?
The latest guidance gives local authorities more freedom to decide how to spend CIL money. A statement in the previous version of the guidance that said CIL revenue "should not be used to remedy pre-existing deficiencies in infrastructure provision unless those deficiencies will be made more severe by new development" has been removed. The new version specifies that levy revenue must "support the development of an authority’s area", but councils can decide what infrastructure is needed. Authorities are advised that "charging authorities can use funds from both the levy and section 106 to pay for the same piece of infrastructure". This reflects the new CIL regulations lifting a ban on councils "pooling" funds from both CIL and section 106 agreements to spend on the same project.
Neil Jones, planning partner at consultancy Rapleys, says the new wording on how revenue can be spent appears to "be widening the scope of what CIL tariffs can be used towards". On the new advice on combining CIL and section 106 money, Dexter says there is now a risk that developments could be charged twice through CIL and section 106 for the same infrastructure. However, he adds that the lifting of "severe restrictions" on how authorities use section 106 funds, may allow developers’ more scope to negotiate contributions to their benefit. This could, says Dexter, help applicants ensure that authorities only use section 106 funds to deliver "infrastructure that is entirely necessary to support a development".
Setting CIL rates
What has changed?
Councils have been given more autonomy over how they should consult when setting CIL rates. A new sentence in the guidance states: "It is for charging authorities to decide how they wish to consult." There is now only a statutory requirement for a single consultation on a draft CIL charging schedule, Macinnes notes, rather than the two currently required. The PPG also adds more detail on the evidence that must be considered when setting rates. "The charging authority should have regard to the actual and expected cost of infrastructure, the viability of development, other actual or expected sources of funding for infrastructure and the administrative expenses in connection with the levy," it states. In addition, a new section of the guidance advises councils that, when setting their rates, they can take into account variations in land value uplift created by new development between different areas, allowing them to set divergent rates. Meanwhile, a new section on strategic sites states they may be subject to bespoke rates.
On the change to a single consultation model, Dexter says: "It should be a quicker process, but it means anybody who wants to engage in that process has to be on the ball and involved in that one round. There’s no second bite at the cherry any more." Jones adds: "It might lead to more confusion if different authorities are taking different approaches to how they consult." The new advice stating that strategic sites can be subject to bespoke rates and that land value uplift can be taken into account may offer councils "greater flexibility in setting differential rates while still ensuring viability", says Dexter.