New Draft Community Infrastructure Regulations – Reforming Developer Contributions

26th February 2019

Proposed changes to the Community Infrastructure Regulations (CIL) were put out to consultation in March 2018 and as a result, further draft regulations have been published with the new consultation period finishing on 31st January 2019. The aim is to make the system of developer contributions more transparent and accountable.

As a result of the consultation last year the Government has decided to proceed with the changes proposed and has added one further important element, namely the requirement that Local Planning Authorities (LPAs) should consult before removing an adopted CIL. The Government is keen that LPAs continue to use CIL.

The main changes proposed to the existing CIL Regulations are:

  • Removing the existing pooling restriction for five contributions or more for infrastructure collected through a Section 106 obligation to ensure that development is not frustrated by the LPAs inability to accept suitable mitigation for recognised harm caused by a scheme. This will mean that LPAs will once again be able to collect contributions from various developments via S106 to fund the same infrastructure.
  • Changes to the way CIL is indexed. Until now this has been in accordance with the RICS Building Cost Information Service and it is proposed to alter this to a three-year rolling house price inflation for residential development and consumer price inflation for non-residential development.
  • Limiting the CIL exemption penalty for missing the deadline for filing a commencement notice from the full amount of the CIL to a cap of £2,500 to make a more proportionate approach to CIL. The Government has decided not to implement the ‘grace period’ for service of the Commencement Notice which was proposed in 2018. The amendment is welcome as the existing regulations means that the penalty for failure to serve a CIL notice are extremely onerous as has most recently been considered by the High Court in R(Shropshire Council) v Secretary of State 2019 which upheld the Council’s decision to insist on the whole CIL being payable despite the self-building exemption having been applied for and granted considerable mitigating circumstances which had led to significant confusion.
  • Introduction of CIL exemption for starter homes for first-time buyers – announced in a Written Ministerial Statement in 2015. This exemption applies to a dwelling sold to an individual where the household annual income is no more than £80,000 (£90,000 in Greater London)
  • Introduction of an annual publication of an Infrastructure Funding Statement setting out how developer contributions have been spent.

Unfortunately, the Government has not taken the opportunity to consolidate the seven separate changes to the original 2010 regulations. Whilst keen to make the Regulations more simple, the effect of these recent amendments are to make the regulations more complicated and the need to cross-reference the various changes continues.

For more information please contact us on 01256 766673.

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