CIL vs S106 The Regulation 123 list

The levy cannot be expected to pay for all of the infrastructure required: – 10-30% – Consider CIL as just one part of a more complex blend of funding The Funding Pie

Planning Obligations (Site specific negotiations) Community Infrastructure Levy (Charging Schedule) Scope What Type of Infrastructure can it support? Only items justifiable within the 3 legal tests: a) necessary to make the development acceptable in planning terms b) directly related to the development c) fairly and reasonably related in scale and kind to the development All infrastructure necessary to support development of the area Can it be used to secure Affordable Housing? Yes - use to prescribe a proportion of affordable housing contributions No Geographic ApplicationSite specific impacts that may or may not reach beyond the ‘red line’ Must cover whole Planning Authority Area with no exceptions (room for differential rates) What types of development are eligible to pay CIL? All development (but the time consuming nature of the process means only the largest are charged) Any development over 100m 2 Building that people would normally go into. (some further exemptions existing for charities and social housing) Eligibility of Capital & RevenueCapital & Revenue both eligible (Revenue for maintenance & agreed revenue items) Capital & Revenue for ongoing maintenance Can the money be pooled?Not for long. After April 2014 you will not be able to collect s106 contributions from 5 or more developments CIL is effectively a pooling mechanism with complete flexibility over spending priorities Once the money is collected how easy is to change what it is spent on? Items agreed within the s106 Agreement (this is often inflexible). It cannot be spend on items identified for CIL investment CIL can be spent on any infrastructure. Authorities need to set out the items they intend to fund using CIL in a Reg 123 list. Setting Charging Levels Is there a need to establish a list of Infrastructure requirements The authority needs to justify s106 is necessary based on the 3 legal tests (as above) Yes. Need costed infrastructure list to prove local need (there is no emphasis on prioritisation at the evidence gathering stage and explicit recognition that the list will change over time) Setting differential ratesNegotiated proposal taking each development on its merits Differences in rates should only relate to viability in different zones or of different uses (not infrastructure costs or the impact of a proposed development) Charging UnitsFlexiblePer m 2 of additional floor space only (all uses) Testing ViabilityCase by case basis (leaving room for negotiation during pre-application discussion) Viability is tested at a borough-wide level at the evidence gather stage, then CIL payments are mandatory A comparison of CIL vs S106

Implication of the New Guidance

“double dipping” is a concern for Developers Regulation 123 is the requirement for a published list of infrastructure projects or types of infrastructure that the Charging Authority intends will be, or may be, wholly or partly funded by CIL, those infrastructure projects or types of infrastructure. …put another way you cannot collect s106 to spend on items within your Reg 123 list Purpose of the Reg 123 list

Devising it: A draft Reg 123 list will now be part of the examination Post Examination: should be based on the draft list examined with the charging schedule Need to explain the reason for change Appropriate local consultation Where a change to the regulation 123 list would have a significant impact on viability evidence requires a review of the charging schedule 123 Golden Thread Relevant Plan Infrastructure Evidence CIL Infrastructure Evidence Regulation 123 List Funding GapProject List

When a charging authority introduces the Community Infrastructure Levy, section 106 requirements should be scaled back to those matters that are directly related to a specific site, and are not set out in a regulation 123 list 3 legal tests: a) necessary to make the development acceptable in planning terms b) directly related to the development c) fairly and reasonably related in scale and kind to the development Planning Obligations can be secured through: – In-kind and financial contributions e.g. through the provision of land and facilities, or funds – On-off payments and phased payments, and maintenance payments – Pool contributions – Unilateral undertakings by developers – the applicant undertaking to the Authority to deal with specific planning issues before planning permission is granted s106 Obligations

Planning Obligations may be: Unconditional or subject to conditions Positive, requiring the developer to do something Negative, restricting the developer from doing something Relate to specific financial payments based on formula and often referred to as commuted Timing is important : If a planning obligation specifies a timescale within which the developer is required to undertake certain actions If the planning permission refers to the phasing of development, the planning obligation may be linked to this phasing arrangement If the planning obligation is a commuted sum are the money must be spent within a specified period. s106 Obligations

1.Infrastructure Evidence: – What, Where, How it will be funded 2.Viability evidence – CIL & s106 as a development cost – The extent to which s106 targets have been met (performance on Affordable Housing & the performance of tariffs) 3.Regulation 123 List – intentions for your CIL receipts 4.How s106 policies will be varied – A draft Supplementary Planning Document? the Examination

Planning Obligations Strategy Local context Strategic Sites vs Small Sites CIL Technical Viability Developme nt market Affordabl e Housing Objective s When to use s106? When to use CIL? (not to forget alternative funding sources) Recognition of delivery mechanisms Planning Obligations Approach

The greater demand on and for Council resources to deliver Implications on Council Resources Education Transport Education Transport Community Facilities Green space Health The more comprehensive the Reg 123 List

Discuss in small groups the particular challenges in your Councils that you will face in producing a draft regulations 123 list and position on s106. Specifically, consider – What will your Reg 123 list cover? – What will your s106 position ‘statement’ be? – What is the internal process you need to go through to agree this before Examination? Exercise 2