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Section 106 and Community Infrastructure Levy Reforms, what you need to know

The Government is committed to delivering 300,000 new homes a year by the mid 2020s. In order to make this goal a reality the Government implemented reforms, as of 01 September 2019, to the Community Infrastructure Levy (CIL) and Section 106 agreements.

In short it is hoped that these reforms will mean communities can see how 'developer cash' benefits them, speed up payments to councils and help building works start more quickly.

What are the reforms?

• Charging Authorities are currently required to undertake two rounds of consultation on proposed CIL rates before they can introduce or revise the Levy. The reform will reduce the statutory requirement to a single round of consultation, authorities will be able to exceed the minimum where appropriate.
• 'The Pooling Restriction' Local Authorities will no longer be prohibited from using more than 5 section 106 planning obligations to fund a single infrastructure project. This should remove any barriers of uncertainty and delay which prevented otherwise acceptable planning permission being rejected.
• The CIL regulations allow for certain development (such as residential extensions and self-build housing) to be exempt, or gain relief, from the Levy. This is dependent on the developer submitting a commencement notice to the charging authority. If the commencement notice is not submitted or is delayed the exemption or relief can removed, and the full chargeable amount becomes payable. However, a more proportionate penalty may be implemented; either a surcharge of 20% or £2,500, whichever is lower.
• To remove all restrictions on Section 106 planning obligations in the regulations regarding the disposal of land by principal councils. An annual funding statement will be introduced instead to improve transparency and accountability.
• New abatement provisions will be introduced for phased planning permissions first permitted before the CIL came into force in an area. This will help to prevent overpayment by the developer due to the previous regulations being drafted unclearly.

How might the reforms affect Registered Providers?

• Reduce timescales and increased efficiency in the planning process
• Improved transparency and accountability regarding what the funds raised by Section 106 agreements and the CIL are being used for.
• There is also a draft regulation intended to exempt starter homes from the Levy which may be brought into effect… watch this space.

For more information contact Emma-Louise Fox in our Housing & Regeneration department via email or phone on 01257 24828. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Housing & Regeneration department here

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