Housing White Paper: Developer contribution system to be reviewed

An independent review of the existing community infrastructure levy (CIL), published alongside a 'white paper' on housing policy reform more widely, concluded that the current system was "not as fast, simple, certain or transparent as originally intended". However, the government does not intend to formally respond to the paper until the Autumn Budget, beyond a general statement of support for developer contributions generally.

In the short term, the government will address some "practical issues" around the operation of so-called 'section 106 agreements', which the CIL was partially intended to replace. It intends to consult on "standardised" s106 agreements which will "reduce disputes and delays", and on how best to monitor and report on the effect of planning obligations.

Planning law expert Rebecca Warren of Pinsent Masons, the law firm behind Out-Law.com, said that the white paper was "something of a damp squib" as far as CIL was concerned.

"We are to wait a further nine months to hear how the government intends to address the reforms," she said.

"This is really disappointing as there are many councils waiting to receive direction on the government's approach to CIL structuring before progressing with their CIL hearings. This is likely to further delay a number of large, strategic developments where viability is crucial given the significant infrastructure costs of delivering large sites and where CIL can often tip the balance for an unviable site: lobbying for a nil rate of CIL is not always successful for such sites despite evidence being presented to CIL hearings," she said.

CIL was first introduced in April 2010 as a way of allowing local authorities to raise funds from the owners or developers of land undertaking new building projects in their area in order to fund local infrastructure. Where CIL is adopted, planning obligations under section 106 of the 1990 Town and Country Planning Act should be scaled back in order to address only the site specific issues required to make the development acceptable in planning terms.

The government said in its white paper that it "continue[d] to support the existing principle that developers are required to mitigate the impacts of development in their area, in order to make is acceptable to the local community and pay for the cumulative impacts of development on the infrastructure of their area".

"The government will examine the options for reforming the system of developer contributions including ensuring direct benefit for communities, and will respond to the independent review and make an announcement at Autumn Budget 2017," it said.