Parliament approves government’s CIL and s.106 changes

This week, Parliament approved regulations that will change the way in which local authorities review and collect on developer contributions, raised through the Community Infrastructure Levy (CIL) and s.106 payments.

 In one of the biggest announcements of the new regulations, Councils will now be required to publish annual infrastructure funding statements, outlining how much has been raised through CIL, as well as which infrastructure projects are to be funded wholly or partly by the levy. Statements must be placed on Council websites at least once a year from 2020; Parish Councils will also be expected to prepare to report “for any financial year in which they receive CIL receipts”.

 Under the new regulations, Councils will for the first time have a legal duty to report on how s.106 payments have been paid on local community/infrastructure projects. Although the Local Government Association (LGA) warned this could place “new burdens” on local services, a number of figures in the sector have welcomed the change, suggesting it will help developers to better communicate the benefits of their developments. It is anticipated further that the change to allow local authorities to charge a fee through the s.106 to help meet the costs and reporting on developer contributions, will aid in minimising any potential extra burdens placed on Council services.

 Responses to news that the restrictions on the ‘pooling’ of s.106 planning obligations to fund infrastructure will be removed has been mixed. Whilst the government has argued the removal of the restrictions will make the delivery of large regeneration projects quicker, the British Property Federation (BPF) expressed concerns Councils could use the rule change to ‘double-dip’ charging developers twice for the same piece of infrastructure, through both CIL and s.106 planning obligations.  

Whilst the new rule changes have been broadly welcomed by the sector as a genuine attempt by the government to help fund the delivery of new homes, more wide sweeping change is needed to remove the red tape surrounding planning services and in strengthening the relationship between communities and developers. The practical implementation of the changes to CIL and s.106 will make for interesting viewing over the coming year, particularly against the ongoing uncertainty dominating the development sector regarding Brexit.

Avnesh Modhvadia - Senior Account Executive