Out-Law News 3 min. read
16 Oct 2012, 5:08 pm
This is intended to cater for various circumstances where developers were at risk of suffering a 'double hit' by being charged twice. However, the majority of the proposals for reform which the Government consulted on at the end of 2011 have not been implemented.
A draft of the CIL Amendment Regulations 2012 has been laid before Parliament. The commencement date is not specified, although it is expected that they will come into force some time in November. Section 73 permissions granted before the Amendment Regulations come into force will still be liable for CIL, before transitional provisions start to operate.
The Regulations set out calculation of CIL charges for section 73 permissions. The concept of "chargeable development" is re-defined and new transitional provisions which affect the calculation of the "chargeable amount" are established. Section 73 permissions will still be liable for CIL, although in many cases that liability will be £0 or at least restricted to the amount due on the uplift in consented development.
Where CIL liability applies to both the original planning permission and the section 73 permission, i.e where the original planning permission was secured after local CIL came into effect, only one charge will apply. A new process called "abatement" will operate to allow developers to claim a credit for CIL which has already been paid.
Where CIL liability only applies to the section 73 permission, i.e. where the original planning permission was secured after local CIL came into effect, a charge will only apply for the difference between the CIL liability of the two permissions – that which is attributable to the net addition of consented development.
Other changes made under the Regulations include allowing the levy to be charged on development granted consent under neighbourhood development orders made under section 61E of the TCPA; exempting replacement planning permissions granted under Article 18 of the Town and Country Planning (Development Management Procedure) Order 2010 and clarifying that CIL can be spent on the operation and maintenance of infrastructure and not just in capital expenditure.
The Regulations also amend the calculation for CIL. This is intended to correct a technical error regarding the application of "off-set" rules for existing floorspace which is to be demolished or retained as part of a redevelopment scheme. The error meant that such developments could be overcharged. Other amendments include changes to the calculation of social housing relief and operation of a Mayoral instalment policy.
The Government first consulted on the proposed amended regulations last year and published draft regulations intended to come into force in April this year. The proposals included a number of amendments which have not been included in the draft Regulations now published.
Omissions include a proposed requirement on local authorities to pass a "meaningful proportion" of the funds raised through the levy to neighbourhood bodies. Proposals to introduce an option for local authorities to use CIL funds to provide affordable housing have also been left out. The Government had also proposed provisions dealing with CIL activities relating to the Mayoral Development Corporation and its charging area, which again have been left out.
"The biggest criticism of the CIL Amendment Regulations will be their complexity", said Marcus Bate, planning expert at Pinsent Masons. "They are far from user-friendly and will exacerbate the feeling that planning legislation is written by lawyers for lawyers. The rules for calculating CIL liabilities for S73 permissions are complex and not easy to penetrate – something which those familiar with CIL will have reluctantly expected given experience of the legal regime. That said, those reforms were well overdue."
"Once the transitional period is over, strategising about scheme variations should revert to form and function more naturally, reducing reliance on the overly-strained S96A process. S73 permissions should again become a cost effective mechanism for optimising scheme value and functionality," Bate said.
"However, those looking for some breathing space to allow the law to settle down should not raise their hopes," he added. "There are at least half a dozen key reforms which the Government by its own admission needs to address, including the key issue of localised CIL for neighbourhoods which affects rate-setting, spending and development management. Beyond that, there is a long list of wider reforms relating to charge-setting and implementation issues which need to be enacted to make the system fit-for-purpose, particularly for strategic schemes. The Government has shelved these reforms for too long. Expect further Amendment Regulations in 2013. Experience suggests that one set of Amendments is needed each year."
