Although unpopular among developers because of its cost burden, the levy is widely regarded as inevitable. Potentially operational from next April, it is a bitter pill to swallow when projects in many parts of the country are at a standstill.
Until now the CIL regime has been trailed as discretionary. Councils could opt to rely on the section 106 regime instead. But in light of the lukewarm response indicating a 50 per cent take-up, the draft regulations seek to "encourage" councils to embrace CIL and prepare charging schedules. They suggest a narrowing of the scope for section 106 agreements and an outlawing of the tariff systems used at some authorities. If the proposals come into effect, planning gain yield would be very much reduced. Councils that decide not to introduce CIL would be penalised, making it hard to do anything other than go down that route. This is unfair because the CIL proposals have until now been a matter for authorities to decide on rather than being a tax imposed by government.
Limiting the scope of section 106 offers some benefits, including reducing the risk of duplication between generic and site-specific contributions. But this only arises when CIL is in operation, so the solution would be to narrow the ambit of section 106 only when a levy is up and running. This limits the risk of double payment, allows councils to continue to operate the section 106 system unimpeded and does not oblige them to move to a "voluntary" CIL regime if they do not want to.
Gary Halman is a partner at commercial planning adviser HOW Planning LLP and a past chairman of the RICS planning and development faculty. The views expressed are his own.