The long-awaited further amendments to the Community Infrastructure Levy Regulations 2010 finally came into force on 24 February 2014 by way of the Community Infrastructure Levy (Amendment) Regulations 2014 (SI 2014 No. 385). The changes are intended to iron out “difficulties” and clarify issues that have come to light as CIL has gradually been introduced, primarily still in southern England. This Planning LawBite looks at some of the changes made and what the effects of these might be.
CIL Charging Authorities (CAs) may now set different rates by reference to size of development as well as type. This will enable a distinction to be made, by way of example, between a corner convenience shop and a food superstore. As was always the case, the justification for such differentials must be underpinned by empirical evidence.
CAs must strike a balance between the need to fund infrastructure and the effect that the CIL rates will have on economic viability. This should avoid the practice, successfully challenged at a number of more recent examinations into CIL Changing Schedules, of setting CIL rates that result in a level of affordable housing being provided which would be below the Local Plan target, due to viability issues taking CIL into account.
The ability to apply CIL to each phase of a development as it comes forward has now been extended to full planning permissions. However, for this to be the case, the planning permission, whether outline or full, must make it clear that the permission is phased.
The triggering of liability when all pre-commencement planning conditions are satisfied will now only apply to phased full and outline permissions, provided in the case of phased outline permissions that this occurs before the approval of all reserved matters and it has been agreed in writing beforehand.
For all other outline planning permissions, the trigger for CIL liability will be approval of the last reserved matter for the development or the phase. For non-phased full planning permissions, the trigger will now be the grant of the planning permission.
Calculation of CIL
Regulation 40 of the CIL Regulations has been replaced, yet again, in a further attempt to get it to work. Changes have also been introduced to what may be “off-set” against the gross internal area of chargeable development:
- With in-use buildings, whether to be retained or demolished, the qualifying period is now six months’ continuous lawful use within the preceding three years (rather than one year).
- No CIL will be charged on retained in-use buildings if there has been no change of use unless there is an increase in floorspace or the previous lawful use was abandoned.
These changes should help with the redevelopment of buildings which have been empty for some time including where this has been because planning policies have required evidence of no interest following extensive marketing over time.
Where the set-off for buildings demolished in a phase results in a negative CIL liability for that phase, that may now be off-set against CIL liability on a subsequent phase.
Social Housing Relief
Relief is now available on qualifying communal development. This can be for the benefit of both the social housing and non-social housing elements of a development, provided that the main benefit is not for members of the public or the non-social housing elements. This should avoid arguments which have arisen over whether or not communal areas should be excluded for the purposes of calculating CIL. It will also cover schemes where some public benefit arises, for example, use of communal facilities in a sheltered housing or care home development which are made available to the general public, provided that the main benefit is for the residents of the sheltered housing or the care home. Relief on communal areas must be claimed as part of the social housing relief.
One other welcome change is the ability to recalculate CIL if the level of social housing provision is varied. However, if a Section 73 planning permission does not vary the social housing relief claim already submitted, that claim can be rolled over and applied to the varied scheme without the need for a further relief application.
Discounted Market Housing Relief
Discretionary relief is now available for discounted market housing, defined as that made available at no more than 80% of open market value. As with all discretionary reliefs, the CA must have made a prior policy decision to offer such relief and published a notice to that effect. There is little evidence that other discretionary reliefs have been adopted by CAs and it remains to be seen how many CAs will adopt this one.
Payment in Kind
This has been extended to the provision of infrastructure as well as land but only where the CA has previously indicated that it will accept payments in kind. This is no different from the adoption by CAs of discretionary reliefs.
The infrastructure must not be required to make the development acceptable in planning terms. Accordingly, the ability to offer infrastructure in place of CIL will not be quite the bonus that many developers were hoping for but it may help where a development is not dependent upon the delivery of infrastructure but that infrastructure will nevertheless be required for later development in the long term.
Set-Off of CIL Payments
Previous changes to the CIL Regulations prevented a CA from charging CIL on Section 73 planning permissions unless additional floorspace was provided. Now, where a new planning permission is granted for a scheme already underway, the CIL already paid can be set-off against the CIL due on the new scheme. The application to set-off must be made before the new development is commenced and must be accompanied by proof of payment.
Local Authorities will no longer be able to require a developer to provide highways works under a Section 278 Agreement if those works are included on the Regulation 123 (of the CIL Regulations) infrastructure list of the CA. The exception is where the Section 278 Agreement would be entered into by the relevant Minister or Transport for London relating to works on roads for which the Highways Agency, the Welsh Government or Transport for London are responsible.
Pooling of Section 106 Contributions
The deadline for the pooling of Section 106 contributions has been extended to 6 April 2015. The Government has indicated that there will be no further extension of this deadline. This is an incentive for CAs to get on with adopting CIL. However, progress with adoption has been patchy, with most activity in the southern half of the UK. It is considered likely that many areas further north will still be without a CIL Charging Schedule by April 2015.
This LawBite is intended to be a summary only and is not intended to be a comprehensive guide to the changes to the CIL regime. If you need any advice or assistance in connection with CIL, please contact Neil Baker, Karen Howe or Caroline Waller of our Planning and Environment Team.