Further reforms to developer contributions: a new consultation on the Community Infrastructure Levy
The reform of developer planning contributions continues with a (brief) consultation into the new draft regulations amending the Community Infrastructure Levy Regulations 2010. These are intended to improve the operation of the Community Infrastructure Levy ("the Levy") by reducing complexity and increasing market responsiveness and transparency.
The changes form part of the wider package of reforms heralded by the Community Infrastructure Levy Review (February 2017). In July 2018 the revised National Planning Policy Framework and accompanying Viability national planning guidance introduced steps to clarify and standardise developer contributions (largely relating to s.106 Agreements). Meanwhile, changes to the Levy were consulted on in March 2018, with responses published in October 2018, leading to the publication of the draft Community Infrastructure Levy Regulations 2010 (SI 2010/948) on 20th December 2018 by the Ministry of Housing, Communities and Local Government (MHCLG).
This consultation focuses on the technical implementation of the proposed reforms. Key changes in the draft regulations include:
- The removal of the current requirement for two rounds of consultation on the Levy, replacing it with a statement setting out how the local authority has sought an appropriate level of engagement;
- The removal of the restriction which prevent local authorities from using more than five section 106 obligations to fund a single infrastructure project (the pooling restriction), provided certain criteria have been met;
- The introduction of a more proportionate approach to administering exemptions, including the introduction of a 'grace period' for Commencement Notices;
- The extension of abatement provisions to phased planning permissions secured before the introduction of the Levy, allowing Levy liabilities to be balanced between different phases of the same development;
- Changes to indexation. This will now apply where a planning permission is amended. Indexing rates will also be aligned to the local House Price Index (for residential developments) and the Consumer Price Index (for non-residential);
- The removal of Regulation 123 restrictions and the introduction of an annual Infrastructure Funding Statement. This is intended to provide greater clarity on 'what has happened' to revenues from developer contributions in terms of how they have been applied, and will be applied in the future;
- Assistance to deliver more starter homes, which are exempt from the Levy where the dwelling is sold to individuals whose total household annual income is no more than £80,000 (£90,000 in London)
The government has expressed a particular interest in comments from developer contributions practitioners.
The consultation closes on 31 January 2019 and relates to England only.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.