Joanne Anderton

+44 (0)1733 887641 jmanderton@greenwoodsgrm.co.uk

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Developers and planning contributions – more changes afoot?

Property / 18 January 2019

Are you a property developer?  Have you had to pay the Community Infrastructure Levy (CIL)? Have you had protracted negotiations with the local authority about section 106 planning obligations?  Are you keen to see the process relating to developer contributions simplified?  If so, then you may want to respond to the government’s latest consultation. 

The Ministry of Housing, Communities and Local Government is seeking views on another round of amendments to the CIL Regulations 2010.  The CIL Regulations are widely considered to be extremely complex, technical and confusing, and have been amended several times since being introduced. The latest amendments bring about reforms which were originally proposed and consulted on last year, and the Government now wants to test the robustness of the proposed amendments against real-world developments.

The proposed amendments relate largely to the contributions which developers must pay as part of the planning process in order to fund essential infrastructure – either by way of section 106 planning obligations or the CIL – around which there is much confusion.

The amendments include:

  1. Removing the ‘pooling restriction’ (which currently prohibits more than five section 106 planning obligations being used on a project, as an incentive to local authorities to introduce the CIL in their area).
  2. Abolishing ‘Regulation 123 lists’ (at the moment, local authorities must keep a list of infrastructure projects that CIL payments will be used for and may not use section 106 contributions towards those projects); instead, local authorities will have to publish annual ‘Infrastructure Funding Statements’ detailing what developer contributions have been collected and how they have been spent.
  3. Introducing a new strategic infrastructure tariff to help fund large-scale projects.
  4. Introducing a new CIL exemption for starter homes to help fulfil the government’s commitment to deliver more affordable housing.

Although some confusion is likely to remain about the overlap between CIL and section 106 obligations, removal of the pooling restriction and Regulation 123 lists may help to unlock major developments which previously have been blocked by the constraints of the current legislation – the downside being that this may lead to developers having to pay both CIL and section 106 contributions for the same project.

The proposals should also give councils more options as to how developer contributions may be used to benefit the local community, whilst at the same time requiring them to be more open about publishing the details.

If you have a keen interest in the planning and development process, and particularly if you have direct experience of negotiating developer contributions, the government would like to hear from you.

The consultation closes on Thursday 31 January. You can respond online here, or by emailing DeveloperContributionsConsultation@communities.gov.uk

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