It will recommend a major policy U-turn, stripping CIL back to its original purpose by funding local infrastructure with a simple, national base tax on all new developments.
Section 106 charges would return for infrastructure requirements on large developments.
The changes are expected to be considered after parliament’s summer recess. The recommendations come from the Department for Communities and Local Government’s CIL review panel, set up as an
independent working group chaired by former British Property Federation chief executive Liz Peace.
Changes are likely to need primary legislation and could be inserted into the Neighbourhood Planning and Infrastructure Bill.
|CIL NOW||CIL PROPOSALS|
|The rate is optional and set by individual local authorities, which can charge all at once or in phases||Compulsory low-level tariff across all new developments|
|Rates can vary by geographic area or use or size||S106 infrastructure payments reintroduced for large developments|
|S106 payments are only used for affordable housing provision and site-specific mitigations||Local authorities to integrate CIL charging schedules into Local Plans|
CIL was introduced in 2010 to create a “fairer, faster and more certain and transparent” levy than s106 payments, which can require lengthy negotiations.
However, the regulations have been amended every year, adding layers of complexity (see below).
Barratt Developments’ group land and planning director Philip Barnes said: “We were hoping that when CIL was introduced it would give us more clarity and certainty, but actually we are finding we often have to negotiate s106 on top of CIL. If these changes were introduced they would give developers greater flexibility, whichcould speed up the delivery of larger sites.”
Details yet to be determined include how the base tariff would be set, whether any types of development would be exempt, and howmedium-sized developments could avoid being hit by both CIL and s106 requirements.
CBRE’s chairman of UK planning Stuart Robinson said: “The key questions will be, who will set the tariff and on what basis? And how will does affordable housing fit in?”
Simon Ricketts, partner at law firm King & Wood Mallesons, said he would not want a lower CIL rate subsidised by higher s106 payments. He added: “If there is a shortfall between what is needed and a new, low CIL, that should not come from s106, which would add extra complexity.”
The recommendations are in line with those put forward by the BPF in response to the government’s consultation on proposed changes, which ended in January.
Chief executive Melanie Leech said: “The BPF has long been pushing for government to introduce a more flexible approach to CIL for complex, large-scale development sites and for the introduction of a simpler, lower charge for smaller developments so to see government take such recommendations forward would be very welcome.”
CIL: a complicated history
2010 Introduced as an optional alternative to s106 for councils to charge for developer contributions towards local infrastructure
2011 Changes brought in as part of the Localism Act included regulations defining appropriate evidence for a charging schedule
2012 Regulation changes included correcting errors on the formula for calculating liability and social housing relief
2013 Use it or lose it introduced – new rules to make communities repay the charging authority if the levy is not used within five years
2014 Measures implemented to ensure granting planning permission cannot be dependent on a s106 or s278 agreement for infrastructure
2015 New rules introduced restricting local authorities from pooling more than five s106 obligations to pay for infrastructure projects