A summary of the September reforms to the Community Infrastructure Levy (CIL)

The CIL reforms which came into force on the 1st of this month, will make developer contributions “less complex and more transparent” according to the “Government’s Response to Reforming Developer Contributions” published in June.

The main changes that developers should be aware of include:

1. The reduction in the penalty where a CIL exception applies and a Commencement Notice was not submitted (the lower of 20% of the CIL amount or £2,500). Previously, the failure to submit a Commencement Notice resulted in the full amount of CIL becoming payable.
2. The extension of “abatement provisions” to allow the offsetting of CIL liability between phases (in phased development) where the first phase pre-dates the adoption of CIL and the phases have been amended through S.73 applications.
3. Clarification that in the situation where the CIL amount payable has been calculated and a subsequent S.73 application has been submitted, the recalculation of CIL liability will be charged at the original index rate and not at the index-linked rate of the date of the CIL assessment as a result of the S.73 application.
4. The introduction of a “monitoring fee”. Previously there were no fees imposed on developers for producing regulation 123 lists. However, Local authorities are now allowed to seek a “fair and reasonable” contribution from developers, towards the monitoring and reporting of planning obligations through S.106 agreements.

There are also several changes that charging authorities should be particularly mindful of. These include:

1. The reduction of two rounds of consultation to just one round where a local authority intends to introduce or revise a CIL rate. Additionally, a local authority no longer needs to public newspaper notices when amending the CIL rate.
2. The removal of the limit on using no more than five S.106 obligations to fund an infrastructure project (“the pooling restriction”).
3. The requirement to publish an Annual Funding Statement which replaces Regulation 123 lists. These statements will contain detail on the intended infrastructure projects to be funded by CIL, how much CIL and S.106 obligation monies have been received by the local authority and what has been spent over the past year. These Annual Funding Statements will have none of the restrictions of Regulation 123 lists, which will allow local authorities to use capital from both the levy and S.106 planning obligations to fund the same piece of infrastructure.  

Finally, a new exemption from CIL liability for starter homes is planned for later in the year.

If you have any questions regarding the changes to CIL or CIL liability generally, then please contact the Planning Team.