New CIL Regulations proposed to come into force from 1st September 2019
Earlier this month, changes to the Community Infrastructure Levy (CIL) regulations were laid before parliament, with the intention that these will come into force on the 1st September 2019. The key amendments to be aware of are summarised below:
Infrastructure Funding Statements
These will replace the existing Regulation 123 lists which outline the infrastructure projects a local authority intends to fund through CIL.
The new statements are intended to increase transparency and ensure that it is clear how the levy and planning obligations are being spent. In addition to this, Councils will also have a legal duty to report on Section 106 payments in their statements which must be published on Local Authority websites at least once a year (as of 31 December 2020).
Whilst this may impose additional burdens on Councils through producing and maintaining new statements, the regulations stipulate that Councils will be able to use Section 106 contributions for administration and monitoring purposes which will offset the costs.
As of September 2019, Local Authorities will be allowed to charge a fee through Section 106 Agreements to contribute towards the cost of monitoring and reporting on developer contributions.
The regulations state that this fee should be "fair" and "reasonable" and should not exceed the authority’s estimate of its cost of monitoring over the lifetime of the planning obligations which relate to that development.
Restrictions on the ‘Pooling’ of Section 106 Planning Obligations
Local authorities are currently allowed to pool no more than five developer contributions to fund a single infrastructure project. The regulations remove any upper limit on the number of contributions that can be put towards a single piece of infrastructure in the hope that this will ease restrictions and allow Councils to fund single, larger infrastructure projects thus giving a greater deal of flexibility to deliver complex projects at pace.
Consultation on CIL
Charging authorities will now only be required to conduct one round of consultation rather than two, as previously required, with any further consultation at the authority’s discretion. This will essentially mean that CIL can be adopted and implemented at a much faster rate.
Authorities will also be required to conduct a consultation if they are considering stopping CIL charging, setting out the expected impacts and how any lost funding will be replaced.
Under the current regulations, developers can lose their entire benefit of a CIL exemption by failing to submit the appropriate Commencement Notice. As of 1st September, failure to do so will equate in a surcharge equal to 20% of the notional chargeable amount or £2,500, which is the lower.
A new bespoke national CIL Index produced by the Royal Institution of Chartered Surveyors (RICS), otherwise known as the RICS CIL Index, will be used to calculate CIL liability. This will be published on the RICS website in October 2019 and updated annually thereafter.
Local Authorities will be required to publish an annual CIL rate summary which provides the updated CIL rates for the subsequent year.
In respect of Section 73 applications, the revised regulations state that CIL should be charged on any additional floorspace at the latest indexed rate. The remainder of the floorspace would be charged at the rate that was in place when the development was first granted planning consent.
Where this would result in a reduction in the chargeable areas this would still be charged at the rate that was in place at the time the original consent was granted.