The background to planning obligations and the Community Infrastructure Levy

Planning obligations are a tool used by Local Authorities to mitigate the impact of unacceptable development to make it acceptable in planning terms. Obligations should meet the tests that they are necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind.

Planning obligations can come in a number of forms and have traditionally been secured through Section 106 agreements or Unilateral Undertakings. In 2010 the Government introduced the Community Infrastructure Levy (CIL) in an effort to change the way planning obligations were secured and to make it fairer, faster and more transparent than the previous system.

The rate of uptake by Local Authorities has varied dramatically across the country, dependent in part on the status on the local planning policy and preparations of development plan documents. Some local planning authorities have already been through the process of examination of their CIL charging schedules and some have formally adopted the measure. Some Councils have decided not to introduce CIL at all, at least for the foreseeable future.

Recent and forthcoming changes to planning obligations

In November the Government introduced new planning guidance which changed the thresholds on which developments were liable for planning obligations, specifically small-scale and self-build development. These changes were effective immediately.

In April 2015 regulation 123 will come into force nationally, even in those authority areas where CIL is not yet adopted. Regulation 123 of the CIL Regulations limits the use of planning obligations meaning that section 106 requirements should be scaled back to those matters that are directly related to a specific site, and are not set out in a regulation 123 list (a list of infrastructure developments which the LPA has…..) This will have the effect of dramatically curtailing the amount of obligations that have traditionally been secured through section 106 agreements. The shortfall will, where it is in place, be picked up by CIL.

What does this mean for developers

There is a window of opportunity for development to come forward on sites that would otherwise not be viable in financial terms.

What is the situation in this region?

 In this general area the only Councils who have already adopted CIL are Poole, Purbeck and Southampton. The New Forest District Council have adopted CIL but have resolved not to introduce it until April 2015. Some Councils have published a Draft Charging Schedules for consultation, including Christchurch, East Dorset, and Test Valley. Weymouth and Portland Borough Council along with West Dorset District Council have jointly submitted their proposed charging schedule for examination and are waiting to hear back from the Inspector if it is found to be sound. Bournemouth is lagging some way behind, having only just released a Preliminary Draft Charging Schedule and the New Forest National Park has, to date, taken the decision not to introduce CIL although this position may change now the Government have revised their threshold guidance.

Helen Harris from Tanner & Tilley commented; ‘There is a real window of opportunity for developers at the moment. Since the government changed the threshold for development contributions at the end of November it’s allowed developers to bring forward smaller sites that they otherwise might not have attempted to secure a permission on.

‘These are the sort of sites that have probably been on the back burner for a while, whether that’s because the sums don’t add up due to straight forward economies of scale, or because of more complicated and site specific considerations which affect development viability such as remedial works, difficult topography, or other mitigation requirements; now is the time to bring them forward.’