The Court of Appeal has overturned a High Court decision and concluded that an Inspector should not have altered a description of development in the course of granting a section 73 (s73) planning permission, as it was beyond her powers.
In Finney v Welsh Ministers the High Court had held that it was acceptable for a s73 planning permission to amend a planning permission for a wind turbine so that it would have a 125m blade tip height even though the original planning permission’s description of development referred to a 100m blade tip height. The Inspector removed the reference to blade tip height from the description of development when granting the s73 planning permission (see Lichfields Planning News, December 2018).
Until now, three High Court cases were relevant to interpreting this element of planning law: R v Coventry CC ex p Arrowcroft Group plc (2001) (‘Arrowcroft’), R (Vue Entertainment Ltd) v City of York Council (2017) (‘Vue’), and R (Wet Finishing Works Ltd) v Taunton Deane BC (2017) (‘Wet Finishing Works’).
In Vue, Justice Collins followed Arrowcroft, which in his view established that it is not open to a local planning authority to vary a condition if that variation means that the precise terms of the original permission (i.e. the description of development) were changed by it.
The Court of Appeal judgment in Finney has ruled that the correct approach to determining whether it is appropriate to use a section 73 planning permission to amend a development is Vue; where Wet Finishing Works contradicts Vue it is wrong and consequently the Finney High Court judgment, which followed Wet Finishing Works, is wrong.
When determining a s73 planning application the decision maker must not consider the description of the development to which the conditions are attached, because s73(2) expressly requires the planning authority to "consider only the question of conditions". The Court of Appeal judgment has found that “the natural inference from that imperative is that the planning authority cannot use section 73 to change the description of the development”.
Lord Justice Lewison said:
“If the inspector had left the description of the permitted development intact, there would in my judgment have been a conflict between what was permitted (a 100 metre turbine) and what the new condition required (a 125 metre turbine). A condition altering the nature of what was permitted would have been unlawful. That, no doubt, was why the inspector changed the description of the permitted development. But in my judgment that change was outside the power conferred by section 73”.
With regard to Counsel for the developer’s concerns that some local planning authorities might seek detailed descriptions of development in order to avoid the possibility of a section 73 planning application being submitted to amend a proposal, Lewison LJ found the answer to be straightforward:
“If a proposed change to permitted development is not a material one, then section 96A [a non-material amendment application] provides an available route. If, on the other hand, the proposed change is a material one, I do not see the objection to a fresh application being required”.
Finney v Welsh Ministers and Others (2019)‘A section 73 permission that varies a description of development can be lawful’, Lichfields Planning News, December 2018,Lichfields Planning Matters, A ‘Minor Material’ clarification (discussing ‘Vue’)
The most recent amendments to the Community Infrastructure Levy (CIL) Regulations (2010) come into force on 1 September and the consequences of many of the changes to the Regulations will be felt immediately. But only in England – this is the second set of amendments to the CIL Regulations that do not apply in Wales (the first were made earlier this year and relate to London only )
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.
The lifting of the pooling restriction and infrastructure funding statements
Clearly, how noticeable are the changes will vary depending on the development proposed and whether or not it is a section 73 planning application. However, beyond the introduction of a consolidated schedule for calculating CIL liability, the most noticeable immediate change is likely to be the lifting of the ‘pooling restriction’, which will arise from the deletion of Regulation 123.
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.
Failure to submit commencement notices will no longer lead to the loss of relief
From 1 September, the CIL Regulations will no longer state that a chargeable development ceases to be eligible for social housing relief if the development starts before a commencement notice is submitted. Similar changes have been made to other types of relief.
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 for s73 phased planning permissions first permitted before CIL was in effect (‘balancing’ and ‘phasing credits’)
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.
New schedule 1 seeks to set out clearly which formulas to apply to different scenarios where a planning permission is amended (see below).
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.
Carrying over of exemption, relief and payment by instalments to s73 planning permissions
The amendment regulations seek to ensure that where a planning permission benefits from exemption or relief, or the right to pay by instalments, this can be carried over into an amended planning permission; currently this is not always the case.
Applying indexation to s73 planning permissions
According to the Government’s response the amended regulations “seek to avoid a new liability for the entire floorspace of the development being calculated at the latest indexed rate where a section 73 application is granted. The regulations ensure that any increases in liability resulting from a section 73 application are charged at the latest rate, including indexation, while previously permissioned floorspace continues to be charged at the rate/rates in place when those elements of the development were permissioned”.
The Government plans to produce guidance to assist interpretation of this amendment.
These amendments are purported to have been introduced in the interests of fairness, but arguably they are only required because some collecting authorities have been seeking to take advantage of potentially unclear drafting in the existing Regulations, when the intention as now set out more clearly was already clear.
Consolidation of key formulas used to calculate the levy
As noted above, the new schedule 1 at the end of the Regulations attempts to consolidate into one place the formulas for calculation of CIL liability and social housing relief, providing various scenarios for amended planning permissions that are clearly identified.
New indexation arrangements from 1 January 2020
The Government will not go ahead with its proposal to use different indexes for residential and commercial development. Instead, the Government has asked the Royal Institution of Chartered Surveyors to produce a bespoke index for the Levy, based on the Building Cost Information Service’s (BCIS) All-in Tender Prices Index, to be known as the ‘RICS CIL index’.
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.
 Community Infrastructure Levy (Amendment) (England) Regulations 2019
 Government response to reforming developer contributions The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019