The Ministry of Housing, Communities and Local Government (MHCLG) has published a consultation into proposals for reforming developer contributions, including the Community Infrastructure Levy (CIL) and s106 obligations.
In February 2017, the Government published the results of its independent review into CIL and its relationship with planning obligations. The Review found that the system of developer contributions was not as fast, simple, certain or transparent as originally intended. It also suggested that this was in part caused by the significant number of exemptions to CIL that had been established. It recommended replacing the CIL with a system including “no or very few exemptions”.
In the 2017 Autumn Budget, the Chancellor announced a package of reforms, aimed at complementing proposed changes to the NPPF and making the system of developer contributions more transparent and accountable by:
- Reducing complexity and increasing certainty for local authorities, developers and communities
- Supporting swifter development
- Improving market responsiveness of CIL
- Increasing transparency over where developer contributions are spent, and
- Introducing a new tariff to support the development of strategic infrastructure
Rather than replacing the CIL regime wholesale – as was suggested by the independent Review – the consultation aims instead to give Local Planning Authorities (LPAs) more flexibility in their approach to CIL, as well as considering limiting the use of s106 agreements to an extent. This should mean that organisations already benefiting from the charity exemption from CIL will continue to do so.
CTG responded to the consultation (which closed on 10 May 2018) in a joint submission with the Charities’ Property Association and Churches’ Legislation Advisory Service. The response welcomed the retention of the charity exemption from CIL and called for explicit confirmation that this would extend to any complementary or successor Tariffs.
Importantly, in a summary of responses document, the Government has confirmed that it “intends to retain current exemptions” (despite recent parliamentary pressure) which include the charity exemption, which is very reassuring news for charities and highlights the importance of continued lobbying on this point.