Budget 2017: Disappointing CIL Reforms & Other 'News'
It is probably a good thing that I have not been waiting on today's CIL announcement with bated breath.
For one thing, the Government's response has been delayed so many times that I would have suffocated by now; and for another, the response that we got today does not actually commit them to do anything.
Instead, we have been promised a consultation on proposals which, at best constitute little more than some minor tinkering around the edges; and at worst, threaten to make the what is already a byzantine and procedurally complex system significantly worse.
The consultation announced today will contain "detailed proposals" on the following:
- lifting the restrictions on pooling s.106 contributions in limited circumstances - most notably for strategic sites in areas where the local authority has already adopted CIL, or in areas which already have issues with development viability across the board. This would actually be a limited improvement, but will disappoint those who wanted pooling scrapped completely.
- making the procedure for setting and adopting CIL faster and more streamlined "to make it easier to respond to changes to the market". This is ringing a LOT of alarm bells: As far as I can tell, the intention is to make the rate-setting process an even lighter touch procedure than the current regime, which I personally would not welcome.
- Allow charging authorities to set rates based on the uplift in land values between an existing use and a proposed use. This would allow one charging rate to be applied to a residential development built on former agricultural land and a different rate to exactly the same development built on former industrial land. The result of which being that prospective developers may end up with several potentially applicable charging rates for the same type of development. The deciding factor between these rates being the local authority's view as to what the existing land use of the development site might happen to be. Given that it can be rather difficult to bottom out what a site's existing use actually is, and that historically councils have been somewhat imprecise when it comes to drafting their CIL charging schedules* this particular proposal has the potential to cause no end of problems.
- changing indexation of CIL rates to house price inflation, rather than build costs. Actually, this is a good idea and somewhat overdue; and
- giving Combined Authorities and planning joint committees with statutory plan-making functions the option to levy a Strategic Infrastructure Tariff (SIT) in future. This is the only recommendation from the CIL review panel which the Government appears to be minded to adopt. Without addressing all of the panel's other recommendations, I really do not see how it can be considered an improvement. It simply allows Combined Authorities to set additional CIL charges in their area, which will be charged in addition to the local council's local charging rates and any s.106 contributions required by local planning policy. This is a system which those of us who work in London will be familiar with, but which is likely to come as a bit of a nasty surprise to those with a more regional focus.
I will be keeping a close eye out for the consultation and strongly recommend that you all do the same. I suspect that we will need to do an awful lot of damage limitation work when it is released.
In other budget 'news':
- The Government had recommitted to protecting the green-belt. A political pledge which is made so frequently that I am surprised it has not been turned into a lapel badge;
- More money has been promised for a Land Assembly Fund; five new garden towns; remediation and infrastructure works on small sites; and strategic planning in the south-east;
- Ministers are to intervene in local authorities who have failed to progress their local plans - and the power to direct joint plan preparation will be 'activated' shortly;
- New minimum density standards will be introduced for developments in city centres and near transport hubs;
- We are promised new planning policies and permitted development rights to make it easier to convert empty space above shops to residential use; convert retail and employment land to residential use; and allow the demolition of commercial buildings and the construction of purpose built housing in their place;
- The government will introduce, and then strengthen over time, the much vaunted 'housing delivery test' set out in the Housing White Paper;
- A requirement will be placed on councils to bring forward 20% of their housing supply on small sites;
- Some of the exemptions to the 'deemed discharge' procedure for planning permissions will be removed, which will make the procedure available to a wider range of developments; and
- a central register of planning permissions will be published and a review panel set up to look at the reason for the gap between housing completions and the amount of land allocated for development or granted planning permission.
Most of these initiatives either featured in the Housing White Paper or have already been announced, so can hardly be described as 'new'. That said, the ability to demolish and re-build under permitted development rights does have the potential to be interesting. And the requirement for 20% of housing allocations to be small sites should provide a boost to smaller development companies, who can struggle to compete for sites with the larger house-builders.
In short: Not a great budget for those hoping for major CIL Reform, and disappointing for anyone looking for a silver bullet to the housing crisis, but one or two interesting ideas hidden in the small print.
** Hands up anyone who has ended up in an argument over whether any of the following should be charged CIL at 'residential' rates: care homes, extra care units, supported living units, hotels, student accommodation, ancillary car parking, detached garages, basement carparks, garden sheds....
DCLG will launch a consultation with detailed proposals on the following measures:
•removing restriction of Section 106 pooling towards a single piece of infrastructure where the local authority has adopted CIL ....
•speeding up the process of setting and revising CIL to make it easier to respond to changes to the market.
•allowing authorities to set rates which better reflect the uplift in land values between a proposed and existing use.
•changing indexation of CIL rates to house price inflation, rather than build costs.
•giving Combined Authorities and planning joint committees with statutory plan-making functions the option to levy a Strategic Infrastructure Tariff (SIT) in future, in the same way that the London Mayoral CIL is providing funding towards Crossrail. ”