Given how eventful the last few days have been in politics, it is not surprising if the Budget feels like ancient history. That said, if the Government is going to keep to schedule*, at least some of the promises made in the last week of October, should come to fruition in the next couple of weeks.
You may recall that alongside the budget, the Government published its response to the consultation on developer contributions, which set out a number of reforms to the CIL regime that the government intended to implement. By way of a recap, these included:
- changing the rules on consultation on draft charging schedules, so that whilst consultation would still be required, two rounds of consultation might not be.
- lifting the pooling restrictions.
- changing the penalties associated with the failure to submit a Commencement Notice prior to development being started. This will ensure that any penalty is set at a proportionate level and will not result in the whole liability becoming payable immediately.
- considering how new guidance could be used to manage the effects of CIL on viability by encouraging authorities to take account of these issues when setting Levy rates and choosing how they use existing powers for discretionary social housing relief.
- committing to bring forward legislation to exempt Starter Homes from the Community Infrastructure Levy.
- extending abatement provisions and changing the indexation measures for CIL to ensure that it is fair and reflects the intentions of the Government.
- dropping its proposal to allow rates to be set with reference to the existing use of the property being developed; and instead will amend guidance to allow charging authorities to set differential rates more effectively.
- amending the indexes for CIL so that residential rates are tied to the House Prices Index and non-residential rates to the Consumer Prices Index.
- taking forward proposals to require reporting of developer contributions from the Community Infrastructure Levy and section 106 planning obligations through the Infrastructure Funding Statement on a statutory basis.
- removing the restrictions governing regulation 123 lists, and instead addressing concerns over double dipping through reporting and the use of Infrastructure Funding Statements.
- allowing local authorities can seek a fee from applicants towards monitoring planning obligations; and
- introducing Strategic Infrastructure Tariffs
Many of these changes require fundamental amendments to the regulations and a consultation on the text of the revised draft had been promised by the end of the year.
The history of the CIL regulations could fairly be described as a long running saga of unintended consequences and legislative 'patch-ups'. Indeed, many of us have spent a number of years telling DCLG (as was) that we do not think the regulations mean what you think they mean**.
Since 2010, the Regulations have been amended six times, largely as a result of errors in the text. Some of unforced errors in earlier iterations, which have now been corrected, included:
- charging developers the entire CIL amount on a scheme again, each time that they made a s.73 application to amend a planning condition;
- errors in the CIL formula itself, which skewed the amount that should be paid to the Council;
- errors in the text which meant that Councils could always recover an uplift in CIL as a result of indexation on a s.73 application, even if there had been no change in the chargeable floor space as a result of the amendment.
As such, it is vital that the text of the new regulations are consulted on, and stress tested, by developers and councils. That way, any further bugs in the system can be thrashed out before the new regulations come into force. Failure to do so would be inconceivable***.
A number of the proposed amendments are genuine improvements to the current regime, not least the changes to penalties for self-build housing, indexation and exemptions for starter homes - so I am probably not the only person who has the draft regulations on their Christmas list this year. I may, however, be the only person willing to admit it! *^
* Which would be a Christmas miracle in its own right...
** to paraphrase the Princess Bride; a movie I quote with great regularity, even in the office.
*** Sorry. I couldn't resist.
*^ Finally, for those who were wondering - yes, the title to this post was chosen purely to justify the use of the baby photo. I make no apologies for this.
The moves appear in a Ministry of Housing, Communities and Local Government (MHCLG) response, published alongside today’s Budget, to a consultation in March on supporting housebuilding through developer contributions. The ministry said it will consult on draft regulations later this year to put the revised arrangements in place. Among the key points in the response, the government says it will: enable combined authorities with strategic planning powers to take forward a strategic infrastructure tariff lift the pooling restrictions on section 106 contributions in all areas take forward proposals to allow local authorities to seek a fee from applicants towards monitoring planning obligations