Under existing regulations, local authorities will be restricted in their use of planning obligations for pooled contributions, under which they may seek financial contributions from up to five separate planning obligations to fund an item of infrastructure not intended to be funded by CIL, from 6 April 2014. The DCLG has proposed to move the date to April 2015.
"Whilst the Government is wholly committed to the levy, in view of recent regulatory changes and the changes that could result from this consultation, we are proposing to move the date for transition to the levy from April 2014 to April 2015 to allow charging authorities sufficient time to reflect the proposed changes in their approach," the consultation document said.
The DCLG proposes to allow charging authorities to choose to accept provision of on-site or off-site infrastructure in satisfaction of a developer's CIL liability. Currently, local authorities can accept such payments in the form of land payments. However, the proposals would allow them to accept either land payments, infrastructure provision or a combination of both.
"We intend to make it clear through guidance that in kind payments of infrastructure should only be accepted where the charging authority considers that it would bring cost savings and/or timing or other benefits compared to the procurement of the infrastructure through levy funds," the document said.
The DCLG also proposes to introduce a requirement for local authorities to demonstrate that they have struck an appropriate balance between the desirability of funding infrastructure from the levy and the potential effects of the levy on the economic viability of development across the area. Currently, local authorities must "aim" to strike such a balance and use "appropriate available evidence" to inform their decision.
"To assist the examiner in reaching a view as to whether the correct balance has been reached, we propose to make this a more evidence-based test by requiring the charging authority to strike an appropriate balance that they will need to justify through evidence at the examination," the document said.
Other proposals set out in the document include allowing differential rates based on the scale of a development, an extension of the consultation period for a draft charging schedule from minimum a four of weeks to a minimum of six weeks and a requirement for local authorities to make their list of infrastructure they intend to fund by the levy available during the rate setting process.
"We urgently need to build more homes and the proposed changes to the levy will help increase housing supply and help those businesses keen to grow," said Planning Minister Nick Boles.
The British Property Federation has welcomed the proposed reforms. "If the homes and jobs that are so desperately needed are to be forthcoming, it is imperative that schemes are not held up by flaws in the mechanics of the community infrastructure levy," said chief executive Liz Peace.
"We are delighted that Government has worked with the industry and listened to our concerns, and that many of these issues are to be consulted upon," she said.
“Today’s consultation marks an important step in the hard work done by a number of people to try to configure CIL in a way that causes least damage to the property market," said John Rhodes of planning consultancy Quod, who chaired the cross industry group to push forward the reforms.
"Even with these changers, further reforms would be desirable but we are very grateful to CLG for working so openly with us to achieve these changes – at least in draft. The consultation document is not perfect but it opens the opportunity for real change and everyone with an interest should study the changes and respond. We do remain concerned however that CIL is having an unhealthy impact on economic recovery," Rhodes said.
