Community Infrastructure Levy update


Posted by Sadie Pitman, 23rd September 2019
Our specialist planning lawyers look at an amendment to a regulation designed to speed up the delivery of housing. The Community Infrastructure Levy (Amendment) (England) (No. 2) Regulations 2019 (“the Amendment Regulations”) came into force on 1 September 2019 but what can you take from it?

Following Keith Lancaster’s blog post, written in anticipation of the Amendment Regulations this July, we can now look more closely at the changes imposed by the Amendment Regulations.

Developer contributions are secured via section 106 obligations and the Community Infrastructure Levy (“CIL”). However, this dual system is often criticised for being overly complex and lacking in transparency. The Amendment Regulations sought to tackle this.

We summarise the key themes of the legislation below:

  1. Removal of the pooling restriction

The Government has removed the restriction that prevents local authorities from using more than five section106 obligations to fund a single infrastructure project.

  1. Changing the penalty for failure to serve a commencement notice

Failure to serve a commencement notice previously had very costly results, namely the loss of a CIL exemption or relief.  The Government was keen to implement a more proportionate penalty (while still providing adequate incentive for a developer to serve a commencement notice). Accordingly, the new penalty is a surcharge of the lower of 20% of the chargeable amount or £2,500.

  1. Introduction of Infrastructure Funding Statements

The Amendment Regulations revoked the former CIL regulation 123, which provided guidance on how a charging authority could publish a list of infrastructure projects which it intended to fund via CIL.

To increase transparency, the new regulation 121A replaces these lists with an annual infrastructure funding statement to be produced by local authorities.  The Government consultation on the Amendment Regulations highlighted concerns in regards to the challenges facing authorities in producing such statements. Consequently, the Amendment Regulations provide for the first annual infrastructure funding statement to be published by 31 December 2020.

  1. Monitoring fees

The Government originally proposed to allow local authorities to seek a proportionate and reasonable contribution towards the monitoring and reporting of section 106 obligations. Following the consultation, the Government acknowledged that further transparency was required as to what constitutes “proportionate and reasonable”. The new regulation 122(2A) has confirmed that the sum must be “paid fairly and reasonably” and must relate “in scale and kind to the development”. The sum must also “not exceed the authority’s estimate of its cost of monitoring the development over the lifetime of the planning obligations which relate to that development”.

Whilst it remains to be seen how such reforms will truly incentivise and speed up the delivery of housing, the clarity over the monitoring fee and the softening of the penalty for failing to serve a commencement notice are welcome changes.

The amended Community Infrastructure Levy Regulations 2010 can be found here.

 

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