The Government has released a consultation paper on significant reform to the Community Infrastructure Levy (‘CIL’) regime. CIL was introduced in 2010 and the legislation has already been subject to three sets of amendments. Only a limited number of charging schedules have come into effect, after which an authority may collect CIL.

The consultation paper seeks to address a number of the problems the development industry has raised with the Government.

The headline issue within the consultation paper is to postpone the cut-off date for local authorities being able to treat pooled funds paid through S106 Agreements as a reason for granting planning permission. This is now proposed to be April 2015 to allow authorities sufficient time to reflect the proposed legislative changes.

Other significant proposals include:

  • Allowing authorities to accept payments in kind to offset CIL. This could be the provision of infrastructure on and off-site but cannot be secured by a S106 Agreement.
  • Relaxing the rules on what existing floorspace can be offset against CIL. As long as the existing floorspace is not demolished until after approval of the last condition and the use has not been abandoned, CIL will generally not be chargeable other than on increases in floorspace.
  • Permitting local authorities to choose to accept that new applications may not incur a CIL charge if there is a permitted and commenced scheme in existence and no new floorspace is proposed.
  • Amending the regulations to recognise phasing within ‘hybrid’ applications to correct the failings of the current drafting.
  • Various amendments to charging schedule setting.  

Many of the proposed changes will be welcome to developers and practitioners but their effectiveness will depend on the detail of the drafting. However, one inevitable consequence will be to further complicate the CIL Regulations and it will be many years before it is fully known how the system will work in practice.

The consultation paper can be viewed on the Department of Communities and Local Government website and the consultation period ends on 28 May 2013.