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From a development management perspective (as opposed to the drafting of charging schedules), there are several amendments relating to the calculation of CIL liability that will have immediate effect. This blog focuses mainly on the lifting of the pooling restriction.
Any development granted planning permission on or after 1 September 2019 may be subject to a section 106 agreement contributing to infrastructure that has already benefited from contributions from five or more planning obligations (since 2010); this has not been possible since 2015 or earlier (where CIL charging schedules took effect sooner). It also means the end of devising ‘clever ways’ of developments contributing to a piece of infrastructure than has already benefited from five or more planning contributions, such as each development contributing towards a specific classroom of a school.
The intended effect of this is to allow CIL and planning obligations to fund the same piece of infrastructure and accordingly remove what can be a barrier to development. Whilst many have sought its removal, some in the property sector have raised concern that it will result in ‘double dipping’ (i.e. CIL and s106 contributions from the same scheme paying for the same piece of infrastructure). But in its response to the consultation ‘Reforming developer contributions’, the Government said, in effect, that double dipping doesn’t matter and indeed is a sensible approach if it means the relevant piece of infrastructure will be paid for more swiftly and theoretically come forward more sooner: “This will enable more flexible and faster infrastructure and housing delivery”.
Furthermore, the Government considers that the Infrastructure Funding Statements (IFSs) required annually from 31 December 2020 will allay concerns regarding double dipping by keeping an appropriate audit trail of all contributions to receiving authorities and how they are spent, whether s106 or CIL. There is no penalty for not producing an IFS; the Government says it will consider further changes to legislation if IFSs are not produced (the matters to include in an IFS are listed in new Schedule 2). Given that the matters to include have already been diluted in response to concerns about what to include, it is possible that some contribution receiving authorities might not produce an IFS. That said, given that Plans must set out the contributions expected and the type of infrastructure required (NPPF para 34) and site viability is to be carried out in plan-making, failure to produce an IFS might be a more obvious omission than a failure to address other recent requirements (such as an updated brownfield register or providing sufficient land for everyone on self-build housing waiting list). Before IFSs are produced, the list of infrastructure on which CIL monies are to be spent remains, but no longer needs to be referred to by developers as from 1 September it will be possible to pay s106 contributions towards items on the list.
The lifting of the pooling restriction might affect planning applications that have been approved subject to a s106 agreement but before it has been signed and there is not yet a formal permission – most probably where the pooling restriction has caused difficulties that were only just surmountable. Any changes to the planning contributions might need to be reconsidered by the planning committee, if that was the determination route.
The lifting of the pooling restriction would not affect planning permissions already granted, including outline permissions, although there might be discussion in some future instances about whether a section 73 planning permission would provide different planning obligations to the original planning permission because previous limitations have been removed. The Government is to produce guidance on how changes to the Regulations affect historic s106 planning obligations.
Instead, there are new surcharges that relate specifically to developments granted a form of relief, where the development starts without a commencement notice being submitted. This surcharge must be imposed, and in relation to this, the consultation response provides an interesting insight to the differing approaches of some of the collecting authorities. Some considered a mandatory surcharge inflexible, while others said the penalty was too small to incentivise submission of a commencement notice. On concerns about inflexibility, the Regulations are clear that a collecting authority does not have to impose a surcharge when the cost of chasing it would be greater than the surcharge itself.
New abatement provisions will be introduced for phased planning permissions first permitted before the Levy came into force in an area, which are subsequently amended after a charging schedule is in effect. This will include a mechanism to allow for the balancing of liabilities between phases for developments which were first permitted before the Levy came into force.
The Government is considering providing worked examples of these provisions as it is acknowledged that they are complex, particularly with regard to keeping an audit trail of phasing credits and potential difficulties in calculating the “notional” liability of a pre-CIL planning permission.
The new provisions do not extend to taking into account the floorspace of an ‘in-use building’ when calculating CIL where that building has been demolished by virtue of a pre-CIL planning permission and is therefore not an ‘in-use building’ for the purposes of the subsequent section 73 planning permission.
A future Lichfields’ Planning Matters blog will consider these changes in more detail.
This new index will be produced annually, be made publicly available and will not change through the year. The charging authority will also provide an ‘annual CIL rate summary’.
The Regulations require that the BCIS index applies to planning permissions granted before 1 January 2020. From 1 January 2020 the RICS CIL index that is to be published at the end of this year will be used for planning permissions granted on or after that date.
The BCIS index will reapply if for any reason the RICS CIL index is not produced in November of any preceding year.