As April 2015 edges ever closer, we thought it worth revisiting the terms of the CIL Regulations and considering the impact on local authorities that failing to have a charging schedule in place by then will have.
There is of course no statutory obligation for local authorities to charge CIL. Indeed Savills have reported, in their recent report on CIL: The Countdown to 2015, that only 12% of planning authorities have charging schedules in place and 68% are unlikely to do so before the April date. That does not necessarily mean that the 68% intend to never charge CIL, although some have made that decision. Wherever they may be up to in the process come April, all planning authorities will thereafter be ruled to some extent by the CIL Regulations.
The Regulations already provide that s106 obligations cannot be used as a reason to grant consent if they fail to meet the statutory tests in Reg 122 (note that s106 obligations that do not meet the tests can still be given, they just can’t be taken into account in the decision to grant consent).
So as to avoid double-recovery of funds from developers, the Regulations go on to provide that from the date on which a charging schedule is in place, or from 6 April 2015 regardless, a s106 obligation also cannot be taken into account as a reason for granting consent if:
1. the obligation provides for the funding or provision of those infrastructure projects or types of infrastructure listed on the authority’s website as infrastructure that it intends to fund through CIL (a “Reg 123 list”);
2. the obligation provides for the funding or provision of any infrastructure where no Reg 123 list has been published;
3. the obligation requires an agreement under s278 Highways Act to be entered into and no Reg 123 list has been published; or
4. the obligation provides for the funding or provision of an infrastructure project or type of infrastructure and 5 or more obligations for development in that area which also provide for the funding or provision of the same project or type of infrastructure have been entered into on or after 6 April 2010.
These provisions present a real and significant restriction on the use of s106 agreements to secure infrastructure payments or provision, and therefore a serious risk of funding gaps becoming an issue (if they are not already), particularly in relation to the pooling provisions, which may be a concern from ‘day one’ as authorities will need to look back to all planning obligations given since 2010.
If CIL is being charged, and a Reg 123 list has been published, then authorities may feel more in control of the situation but if not they may find themselves determining applications for development proposals which will have significant infrastructure demands and finding that they cannot rely on developer covenants in order to mitigate those impacts.
Can careful wording help the situation? Where a Reg 123 list refers to infrastructure in a very general sense (eg “education”), the ability to collect monies through s106 obligations will be severely curtailed. It will make sense in many situations to refer to particular projects much more specifically (especially as there is no obligation to actually spend monies on the items in the Reg 123 list).