New CIL Regulations to be published by the end of the year

The DCLG has published its response (19-page / 134KB PDF) to a consultation on further CIL reforms launched in April. It said that new regulations would be introduced to implement a number of reforms to CIL, including a requirement for local authorities to strike an appropriate balance between the funding of infrastructure from the levy and the potential effects of the levy on the viability of development.

The new regulations will move the transition deadline to the levy from April 2014 to April 2015 by pushing back the date for when authorities will be restricted in their use of planning obligations for pooled contributions, under which they may seek financial contributions from up to five separate planning obligations to fund an item of infrastructure not intended to be funded by CIL.

Charging authorities will be allowed to set differential rates by reference to the proposed size of development as well as to the proposed number of units or dwellings. The DCLG said it would not implement a proposal to extend the consultation period on the draft charging schedule from "at least four weeks" to "at least six weeks". "After consideration we believe that this is more appropriate to be left to authorities' discretion," it said.

A draft Regulation 123 list, which identifies the projects or types of infrastructure an authority intends to fund or part fund with CIL receipts, will be required to form part of the available evidence during the rate setting process, including at examination.

The regulations will also extend current rules, under which charging authorities can accept land as payment in respect of part or all of a CIL liability, to allow authorities to also accept on-site or off-site infrastructure as payment.

The current 'vacancy test' under which existing floor space can be off-set against a CIL liability when a building has been in continuous lawful use for at least six of the previous 12 months, will be extended to cover buildings that have been in use for a continuous period of six months in the last three years.

"This reflects the fact that the impact on infrastructure will be limited where there has only been a relatively short gap between occupiers and provides an incentive for bringing empty buildings back into use," the DCLG said.

The new regulations will also allow CIL payments made to be "fairly credited" against a revised full planning application for changes to the same development.

The announced reforms have been welcomed by the property industry. “We’re pleased the Government has listened to the concerns of the property industry and has agreed to amend a policy that would have otherwise held back development and put a brake on economic growth," said British Property Federation chief executive Liz Peace in a statement. "As ever, the devil will be in the detail and we look forward to seeing the revised regulations and guidance when they are published."

“Despite the proposed changes there are still concerns that some charging schedules are being set too high, particularly for some uses. Local authorities should provide a proper evidence base and assess whether or not their CIL will stifle rather than support growth,” Peace said.

The DCLG said it expects the new regulations to come into effect by the end of January 2014, subject to the Parliamentary process.