Developers warned of further changes to the S.106 and CIL Regime

Earlier this month the Secretary of State for Communities and Local Government published the Housing White Paper “Fixing our broken housing market” and its accompanying consultation. The consultation will run until 2 May 2017.

The publication includes a long-awaited review into the Community Infrastructure Levy (C.I.L.), as well as a consultation on the Build to Rent sector, both of which are hot topics for developers here in Shropshire.  The report has so far received a mixed reaction from developers.

In the report, the Government continues to support the principle that developers are required to mitigate the impacts of development, in order to make it acceptable to the local community and pay for the cumulative impacts of development on the infrastructure of their area.  It recognised however that the relationship between s.106 and C.I.L. under the current system means delivery is not as fast, simple, certain or transparent as originally intended.

The review stopped short of recommending the abolition of C.I.L., but has instead proposed extensive reform to create a twin layer system of securing developer contributions. Under the proposed system:

  • All development would be liable for a Local Infrastructure Tariff (L.I.T.), a low level charge aimed at meeting an area’s wider cumulative infrastructure needs; and
  • Larger development, that calls for direct mitigation to make it acceptable in planning terms or very specific major infrastructure on or close by the development including infrastructure delivered up-front, would be required to deliver site specific mitigation secured by a section 106 agreement.

The review also recommended legislating to allow combined authorities to create an additional Strategic Infrastructure Tariff (S.I.T.) for major infrastructure contributions.

The Government has confirmed that it is exploring an improved and simplified approach to developer contributions, including ensuring direct benefit for communities.  An announcement will be made in the Autumn Budget later this year.

The reviews also committed to reform section 106 agreements and address certain practical issues in the application of those agreements. Proposals include a standardised open-book approach and greater transparency to reduce disputes and delays, and improve on monitoring their delivery - all which should be good news for developers.

Should you have any queries regarding the report then please call, Terry Jones Solicitors (Contact: Ian Bowker) on 01952 297979.

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