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Government consults on changes to developer contributions

30 Jan 2019

Immediately before Christmas 2018, the Government issued a consultation on proposed changes to legislation surrounding developer contributions.

Developer contributions in the planning process are sought through s106 agreements and the Community Infrastructure Levy (where in force).  The Government confirmed that the estimated value of section 106 agreements and CIL levied in 2016/17 was £6billion.  Section 106 agreements in 2016/17 secured £4billion for the provision of affordable housing and 50,000 affordable homes.  CIL levies by local authorities totalled £771million, with £174million additionally secured by the Mayor of London.

Clearly, developer contributions make up significant sums of money with the potential to secure vital infrastructure needed for development and regeneration.  Launching the consultation, Minister of State for Housing Kit Malthouse MP stated that the reforms “will accelerate the pace of homebuilding”.

The consultation seeks views on proposed amendments to the Community Infrastructure Levy Regulations 2010, including:

  • Removing the restriction on local planning authorities from entering into more than five section 106 agreements to fund the same project or infrastructure;
  • Removing the restriction on s106 agreements securing items set out on the CIL Regulation 123 list (ie. allowing s106 to fund the same item of infrastructure as intended to be funded by CIL);
  • Removing the existing requirement for two rounds of consultation on draft CIL Charging Schedules before adoption;
  • Index linking CIL for non-residential development to the CPI and for residential development to a three year average of the annual local House Price Index;
  • Requiring local planning authorities to publish annual Infrastructure Funding Statements to identify revenue/spending and proposed revenue/spending;
  • Allowing local planning authorities to charge monitoring fees in s106s (subject to being proportionate and reasonable); and
  • Exempting CIL on Starter Homes (homes sold to households earning less than £80,000 (£90,000 in Greater London)).

The consultation closes on 31 January 2019 and is available here.

If you need advice on the CIL or planning matters, please contact Chloe Karamian

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