Written and recorded by Richard Quenby
Hello. Welcome to the state of war, whether now, which will provide an update into proposed government changes to the community infrastructure levy regime, as we all know, community infrastructure Levy or C I. A. L. I was first introduced in 2010. His introduction was decidedly controversial and in the eight years in which see I'll has been with us, it has been amended by regulations in six of those years in orderto iron out. For greater or lesser extent, the wrinkles which existed within the regime take up has not been his widespread or as rapid as the government had hoped. At present, only 138 local authorities in England and Wales have adopted CL schedules. Nearly 230 have published a draft charging schedules which are currently out for consultation, which leaves around 1/3 of authorities. You have no published plans for C I A. L at all. A consequence of this late adoption of C I. A. L is that considerably less revenue has been generated. That was expected in the ideas since C. I. A was introduced An independent review in CL commissioned by the government in 2015 concluded that the current system of developer contributions was not sufficiently fast, simple, certain or transparent, and the development was actively being delayed by negotiations for Section 106 planning obligations, which were often required alongside levy contributions. In response, the government announced that the autumn budget in 2017 but it would be consulting on reforms to the system in order to reduce complexity and to increase certainty. In March 2018 the Ministry for Communities, Housing and Local Government published for consultation proposals to reform the current system of developer contributions, focusing specifically on community infrastructure levy Onda Sexual 106 planning obligations. That consultation is open until the 10th of May 2018. Along with the publication of the consultation, the ministry also published a research report which it had commissioned in relation to the interaction between Section 106 planning obligations and the community structure Levy. That report produced four main conclusions. First, it noted that the aggregate value of planning obligations in the year 2016 to 2017 was £6 billion 85% of which came from Section 106 agreements. Secondly, it concluded that C. I. A. L was at its most effective on small, uncomplicated sites in areas of high demand. Thirdly, it investigated the delays to the planning process caused by Section 106 agreement in negotiations and reach the conclusion that the negotiation process frequently causes delays for the planning process. But nonetheless, negotiations were invariably necessary a great many cases. Finally, it noted that there is significant variability and approaches to monetary between local planning authorities and also that the proceeds of planning obligations are not clearly consistently or transparently communicated to communities. The ministry's proposed amendments just set out in its consultation paper a relation to changes to the regime for seeking CL contributions on the interaction with Section 106 Planning obligations has the clear aim of reducing complexity and supporting swift development. While some of the proposed changes, which are look at in more detail in due course, such as the abolition of the regulation 123 pooling restriction in certain areas, including those which have see I'll charging schedules already in place, are likely to be welcomed in principle, the breath of the potential reforms will, in the short term probably create further uncertainty. This is particularly so in areas where authorities are currently in the process of preparing or advising their existing C I. A. L charging schedules, developers and charging authorities will need to monitor which of the proposals. The government will actually take forward. What's in the meantime, carrying on under the current rules as set out in the original 2010 regulations as frequently amended? Interestingly, the consultation paper also inside a significant change as to possible future direction. It notes that the government wants to to continue to explore other options, including making provision for contributions to affordable housing and infrastructure, to be set nationally and to become non negotiable. We'll turn now to look at some of the key features of the consultation paper on, therefore, to examine the proposals which the government is putting forward as potential changes to the community infrastructure. Lefty Regime. First, the government is proposing to streamline the process for authorities to set and revise their CL charging schedules by aligning the requirements for evidence on infrastructure in need and viability. With the evidence which is required for local plan making, regulations and guidance will make clear that viability evidence accepted for plan making should and, in the words of the consultation paper, usually be considered sufficient for setting rates of levy subject to being endorsed as being of inappropriate standard by an examiner where they have been significant changes in market conditions. Since that evidence was juiced, it may be appropriate simply to supplement existing information rather than procuring new and costly evidence was a further aspect of the streamlining of the process. Evidence of local infrastructure in need developed for plan making should, in the ministry's opinion, be sufficient for the purpose of setting breaks of living, Where evidence shows a funding gap significantly greater than anticipated levy income? Further evidence of infrastructure funding need not be required. Secondly, the government is proposing to make it easier to prepare under mend CL charging Central's. It aims to do this by replacing the current statutory consultation requirements, which required two rounds of conference siltation before a charging schedule could be adopted or amended with a requirement to publish what the consultation paper describes as a statement of engagement. As to how an authority has sought an appropriate level of engagement, this statement would be examined during the C I A. L examination process and guidance will stress the need for consultation to be proportionate to the scale of any charge which is being introduced or amended. The government's third proposal for Ripple for reform is to dis apply the regulation 123 pooling restriction. This is a restriction which currently prevents a local planning authority from using more than five Section 106 planning obligations to fund a single infrastructure project. Now this won't be a blanket. Abolition of the 123 polling restriction proposal on the parts of the ministry is that Theo the abolition should only apply firstly in areas which have adopted the community infrastructure levy. Secondly, where authorities full under a threshold based on the 10th percentile of average new build house prices. This is on the basis of the government believes so. You see infrastructure levy cannot feasibly be charged in such areas, and third, in respect of specific strategic sites where significant development is plan. The government's proposal here is either to remove the pooling restriction in relation to a limited number of authorities and across the whole authority area. When a set percentage of homes set out in a plan are being delivered through a limited number of large strategic sites or, alternatively, to amend the restriction across England, but again only for large strategic sites identified it plans so that all planning obligations from a single strategic site counters one planning obligation. Of course, at the moment, there is no definition of what would be a large strategic site for these purposes on. The ministry recognizes, as part of the consultation that such a definition may have to be set out in statute or regulations. The fourth proposal for reform is to replace the requirement on authorities in regulation 123 to publish lists of infrastructure they intend to fund with C I A. L, with a requirement to provide public infrastructure of funding statements. Those statements will be used to report on how the levee and accompanying section one of six contributions have been used rather than how they are intended to be used to fund infrastructure. Fifthly, the government is proposing to allow CL charging schedules to set differential rates based on the existing use of land. So, for example, on authority could set out different rates for residential development, depending on whether the land was previously in agricultural or industrial use. No relation to this. Authorities will be encouraged in guidance to set a single see I'll rate, including a new right where appropriate, four strategic sites with complex uses. Authorities will be required to calculate the C I A L liabilities on the basis of the majority existing use for smaller sites. Authorities will be required to charge community infrastructure levy on the basis of the majority useful, larger but not strategic sites where differential rates apply. But 80% or more off the site is in a single existing use when differential rates would apply to a largest site in multiple existing uses, but where no single existing use accounts for 80% or more. Off that site, C I O rates could either be apportioned between the existing uses or a distinct on individual rate could be set for that particular site and last liberation schedules. Authorities will be required to class land in an ancillary use on a development site the same way as the main use. So, for example, a car park from industrial site would itself be classified as having industrial use. The sixth principle reform proposed by the ministry is to allow community infrastructure levy, which relates to residential development, to be indexed by reference to regional or local authority. House prices in relation to non residential development. C i A L rates could be indexed to a factor of house prices on the consumer price index or indeed, the ministry proposes toe that index alone. The concentration paper also puts forward a proposal which would allow combined authorities and joint committees where they have strategic planning powers, to introduce what will become a strategic infrastructure tariff. Such a tariff will operate in the same way as the London May or or community infrastructure levy, including revision for the same exemptions and reliefs, and will operate alongside any CL and Section 106 obligations. Such a tariff should only be used to contribute to the funding of specific strategic large scale infrastructure projects which cross administrative boundaries and ultimately, the consultation paper proposes a relax ation of the requirement for developers to submit a commencement notice before beginning works on site. The benefit from exemptions by providing a grace period that will allow the exemptions to apply, provided a commencement notice is served within two months of the start of the works, call by provision would continue to apply as they do now, in most cases from the date of commencement on the requirement fitted for developers to obtain the exemption prior to commencement would also remain. The last proposal is an amendment of the abatement provisions, which apply where a development permitted before community infrastructure levy came into force in an area which is then amended through a Section 73 application. After the levy has been adopted To ensure that where such a development is implemented in faces, any resulting increases in Cielo abilities in one face can be offset against decreases in another face. As I say, the consultation exercise will be conducted until May off 2018. The expectation is that the government's response is unlikely to come out before the end of this year. But there is clearly an opportunity for developers, local authorities and others who are interested in this area to submit their responses. That concludes. This webinar on all that remains is for me to thank you for listening
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