CIL and section 106 contributions

Ministers have announced proposals for changes to the planning system in relation to planning obligations, the s106 regime.

The move has been prompted by the introduction of the Community Infrastructure Levy (CIL), the regulations for which come into force on April 6.

As well as consulting on the reshaping of the s106 regime, in England, the Communities and Local Government has published guidance to local councils who plan to make use of the CIL scheme.

The proposed new policy on planning obligations is designed to clarify the purposes of planning obligations in the light of CIL and expressly prevents Councils from ‘double charging’ through the use of planning obligations and CIL.

CLG has stressed that “planning obligations should aim to secure necessary requirements that facilitate the granting of planning permission for a particular development, while CIL contributions are for general infrastructure need”. The new policy also puts tariff-style charges on a better statutory basis

The CIL regulations which kick in shortly reform planning obligations in three respects:

•putting the Circular 1/85 (11/95 in England)tests on a statutory basis for development which are capable of being charged CIL.
•ensuring the local use of CIL and planning obligations does not overlap; and
•limiting pooled contributions towards infrastructure which may be funded by CIL.


Planning minister John Healey said: "Government investment is helping build the homes this country needs, and keep workers on sites across the country. But we also need to cut red tape and get the developments under way without unnecessary delay.

"That's why I want councils to make full use of the new Community Infrastructure Levy, so the necessary changes to local roads, schools and hospitals can be made to support these new developments.

In a related development the Government has published research undertaken by Cambridge University and the University of Sheffield into the value and use of s106 agreements.

This showed that the value of the obligations secured in England has increased since 2005-06. Those secured in 2007-08 are worth £4.9bn, of which approximately half is for new affordable housing. This represents an increase of just under a quarter, compared with the £4bn negotiated in 2005-06. It is, however, smaller than the 57 per cent increase experienced between 2003-04 and 2005-06, reflecting in part the smaller rise in development values in the more recent period.

Welsh authorities on the other hand have been slow in using section 106's and the values obtained has been pitifully small. We wait to see if Welsh authorities introduce policies requiring the use of CIL. I suspect they will be slow to adopt policies and local Welsh communities will again lose out.