The Community Infrastructure Levy (CIL) is a levy that local authorities can charge on new developments, in place, to a large extent, of imposing obligations under planning agreements (section 106s).
The “section 73 issue”
Under the Community Infrastructure Levy Regulations 2010, (CIL regulations), liability for CIL does not arise in respect of a development if, on the day planning permission is granted for that development, it is situated in an area in which no CIL charging schedule is yet in effect.
Under section 73 of the Town and Country Planning Act 1990, you can apply to vary a condition subject to which a planning permission has been granted and the result of such a successful application is that a new consent is granted.
If this is granted after a CIL charging schedule comes into force, the varied development could, under the terms of the original CIL Regulations, attract a CIL charge. This therefore risks a development being subject to both a negotiated section 106 package (pursuant to the original consent) and a CIL liability (pursuant to the section 73 consent).
When in force, The Draft Community Infrastructure Levy (Amendment) Regulations 2012 will provide that there will be an offset of the CIL payable pursuant to a section 73 consent to the value of any CIL which would have been payable if the development was permitted by the original consent on the same date that the section 73 consent first permitted it.
The result of this will be that if the section 73 consent does not result in an increased floor space compared to the original consent, no CIL will be payable.
The regulations are not retrospective and will only apply to section 73 consents issued after the regulations come into force.