CIL – Time for a re-think?
January 11th, 2017When CIL was launched in 2010 it was fanfared as the substitute for Section 106 agreements. Councils would be both incentivised by the possibility of great riches to fund infrastructure and limited in the way they could use Section 106 agreements for such matters. Developers in return would have a clear understanding of the size of cheque they would be asked for by the local planning authority if consent were granted.
However, ideas generated by the boffins in the ivory towers of Westminster and Cathays Park rarely pan out on the ground in the way they are intended. The need for CIL to follow the adoption of new development plans has delayed its introduction across much of England and Wales. While the rates are supposed to be set by an assessment of infrastructure costs, developers were never going to be able to fund everything; and with the scythe that the Government has taken through local government budgets, the prospect of CIL actually delivering big ticket items is now a pipe dream in many cases.
The reality is therefore now in many cases that both developers and Councils try their best to bypass CIL and deal with contributions in other ways. Not allowed to ask for Section 106 contributions for infrastructure on the Regulation 123 list? Easy – just narrow down that list to exclude projects that you expect funding to cover. Worried about the pooling restrictions? Make sure each request covers a separate part of a project so that it can be differentiated from other contributions and not regarded as pooling. The most ridiculous skirt-around of CIL concerns highway contributions.
The Regulations expressly restrict the ability to ask for Section 106 contributions towards highway infrastructure. However it is now common practice for Section 106 agreements to be contingent on Section 278 Agreements that themselves require a financial payment.
There are then those non-infrastructure items such environmental management of Special Protection Areas, for which CIL just doesn’t work and the restrictions on pooling could prevent compliance with requirements of the Habitats Regulations. Councils are forced to agree Section 106s and assert that it isn’t really pooling when everyone knows that it is. These dodges, skirt-arounds and boundary stretches are not just the tools of cash strapped Councils.
Even Inspectors and the Courts have been inconsistent in their approach towards the legitimacy of infrastructure contributions and tariff based contributions contained in Section 106 Agreements. The result is that CIL is now a confused mess that does not provide Councils or developers with certainty and seemingly (because of its rather patchwork implementation) does not generate the cash for infrastructure either. It does seem that rather than channel funds towards appropriate infrastructure, this particular levy (sic) has suffered a terminal breach.