Planning - Community Infrastructure Levy
With the gradual adoption of Community Infrastructure Levy (“CIL”) by Local Authorities any developers or landowners considering applying for planning permission in the near future need to carefully consider the timing of that application.
Initial indications show that in almost all cases the scheme would be more expensive to develop where CIL is brought into use.
We are all familiar with the scenario of a Section 106 Agreement obliging a developer to contribute to additional facilities required in the immediate locality as a direct result of the development.
This would include items such as an education contribution, affordable housing, open space etc.
The introduction of CIL as an extra layer of cost in that more broad ranging and larger projects can be financed by a local authority via its Charging Schedule.
Contributions to new roads, hospitals and community facilities are more likely to be covered by CIL. With a percentage of the CIL likely to go to Parish Council’s, CIL is perhaps best viewed as like a sinking fund in a commercial building.
On the subject of timing being key, I recently acted for a client who had 4 days to complete a Section 106 Agreement before CIL came into force and would have cost them considerably more under CIL. I managed to negotiate and complete the Section 106 Agreement in 3 days.
In many cases it is likely that the financial viability of the scheme overall will be brought into question because of additional contributions required by CIL. This does not sit comfortably with the various policies designed to ensure that schemes that have already been granted permission but are no longer financially viable can in effect be unpicked and renegotiated in order to bring the schemes forward for development.
It is very much a question of watch this space.
Please do contact Vicky Stoodley, Head of Planning for further information.