Where the development is within a parish council with no neighbourhood plan, 15% of the CIL funds must be passed on.
The regulations require parish councils to apply the receipts "to support development" of its area, including funding towards "the provision, improvement, replacement, operation or maintenance of infrastructure" or "anything else that is concerned with addressing the demands that development places on an area".
Local parish councils that 'misapply' CIL receipts passed to them may be liable to repay the funds to the charging authority. If the parish council either does not spend the money received to "support development" within five years of receipt, or if it has spent the money for other purposes, the charging authority may request that some, or all, of the receipts are refunded.
Where a development is not within a parish or community council, the charging authority is also required to spend the CIL receipts to "support the development" of the relevant area where the development is located.
The regulations also set out transitional provisions for when a Mayoral Development Corporation (MDC) becomes, or ceases to be, a charging authority. These include an entitlement for a charging authority to receive CIL funds where a new charging authority has subsequently taken over control of the area where the chargeable development is located.
The regulations further enable the Mayor of London to start preparatory work on a CIL charging schedule for a MDC prior to the MDC becoming a charging authority.
Plans to pass on CIL funds to parish councils were first announced by Planning Minister Nick Boles in January.
“This Government is determined to persuade communities to accept more housebuilding by giving them a tangible share of the benefits it brings," said Boles in a statement at the time. "By undertaking a neighbourhood plan that makes space for new development, communities can secure revenues to make the community more attractive for everyone,” he said.
“There is good political and legal sense behind these latest Regulations on how CIL must be spent," said Marcus Bate, planning expert at Pinsent Masons, the law firm behind Out-Law.com.
"In prioritising strategic infrastructure over affordable housing, CIL risked weakening the local argument in favour of new development just when local support was most needed to support a step-change in the volume of sustainable new development. As a ‘local finance consideration’, CIL can lawfully be taken into account when planning decisions are made to the extent that it is material to the planning application. Locally spent CIL is particularly suitable to be given weight in planning decisions due to the likely physical and/or functional link between the infrastructure funded and the new development proposed," he said.
“These changes will, however, raise additional implication headaches for local planning authorities, at a time when they are currently grappling with the Government’s proposals for further fundamental reforms of the CIL regime. These authorities will be responsible for carrying out further consultation before spending local CIL in certain scenarios, for example where no neighbourhood development plan is in place," Bate said.
"Arguments about who should be consulted, when and for how long are inevitable. At rate-setting stage, authorities will often be able to do no better than make a best guess about whether 15% or 25% needs to be ring-fenced for local infrastructure, anticipating whether and when neighbourhood development plans will be promoted in their areas. This will leave them vulnerable to criticisms and objection when preparing the infrastructure planning and funding evidence to support their Draft Charging Schedules," he added.
The CIL amendment regulations came into force on Thursday last week.
