10 homes or less – are you still paying CIL?

The changes in planning obligations required for sites of 10 homes or less have arisen following a Government consultation in March this year. The stated reason for the changes is that they are designed to address concerns about the disproportionate burden on developer contributions on small-scale developments.

David Richardson and I have been considering the changes and have concluded that they are not as wide reaching as they first seem.

What the changes have done is to remove the burden of “tariff based contributions” (referred to as Section 106 obligations) on developments of 10 or less units.  

As a key point, we have concluded that “tariff style contributions” in this context do differ from “CIL”.  There are a couple of reasons for this:

• the CIL Regs do not have a de minimis threshold- the idea being that CIL brings in more money than s106 did; and 
• if the Government meant CIL they would have said CIL- the consultation is about ‘section 106 obligations’, and CIL is not a s106 obligation but a separate charge.

So the changes do not remove the requirement to pay CIL. But they do mean that obligations imposed by local authorities towards wider infrastructure cannot be requested. 

In terms of affordable housing, it looks like it will come down to local policy.  If local policy requires on-site provision, than it would seem that can still legitimately be requested.  If local policy is to seek a contribution for off-site provision then that will fall within the exemption, and so will not be a legitimate request.

Also, the changes do not prevent the local authority from seeking any planning obligations on developments under the 10 unit (or 5 unit- see next para) thresholds. So contributions which relate to site specific infrastructure e.g. improvements to road access, street lighting etc. can be requested if they will make the development acceptable in planning terms.

The changes do not apply to development on rural-exception sites. Nor do they apply to designated areas under section 157 of the Housing Act 1985, which includes National Parks and Areas of Outstanding Natural Beauty- in this case local authorities have the option to choose to apply to a lower threshold of 5 units or less.

There is no obligation on LPAs to re-open negotiations on sites already consented, but there is also nothing which restricts the making of a new application on a site which is already consented. So developers will be considering renegotiating any existing obligation- with a backstop that they re-apply!  As always, until someone litigates on this, it is all a bit up for grabs!

The changes have been applied to the National Planning Policy Guidance (“NPPG”) and came into effect on 28 November 2014.

For more information please contact Mark Howard, partner in the Planning team at mark.howard@michelmores.com or on 01392 687621.