The future of CIL and s106

17th February 2017
By Mark Powney

The recent Housing White Paper postpones consideration of the future of CIL and s106 to the autumn at which time the Government will respond to the paper prepared by the CIL Review Team. Titled ‘A New Approach to Developer Contributions’ the paper takes a comprehensive look at the current operation of CIL and its relationship to s106.
The members of the CIL Review Team are experienced professionals and this is reflected in the paper’s clear and concise understanding of the current deficiencies with CIL. The paper details, where ‘in a perfect world’, the situation could be improved. The conclusions around the perceived success of the London Mayoral CIL; the lengthy and costly process for implementing a CIL; and the negative impact a rigid CIL charge is having on reducing Affordable Housing delivery; all resonate with my own experiences.

What the paper doesn’t cover, which may be because it falls outside of the Review Team’s scope, is that CIL has never operated in a ‘perfect world.’ Since its inception, the CIL Regulations have changed multiple times; restrictions on Affordable Housing contributions on smaller sites has been introduced, removed and introduced again; the same with Vacant Building Credit; and s106 pooling restrictions have come into play which has both acted as a stick for Local Planning Authorities (LPAs) who adopted a CIL, whilst removing the effectiveness of s106 to mitigate all but the least costly scheme impacts. This changing landscape impacts viability which is a key consideration in bringing forward a CIL charge and has also resulted in Local Plan delays as LPAs grapple with potential impacts on their planning policies. All the while LPAs still struggle with resourcing issues resulting in the slow delivery of Local Plans not to mention CIL Charging Schedules in some areas.

The appropriate solution(s) are therefore both difficult to identify and implement effectively. Much of the Review Team’s conclusions around adoption of a Local Infrastructure Tariff (LIF), similar to the London Mayoral CIL but based on a national formula, has merit. However this approach could be argued to be more effective on a regional basis such as is the case in London which seemingly harks back to the days of Regional Spatial Strategies now abolished. Also a new system; regardless of how streamlined; would likely result in further indecision and delays in bringing forward Local Plans and Planning Contributions SPDs as the implications of a LIF are considered. In this regard, maybe what is most needed in the wider planning system is a period of calm particularly given many of the problems with CIL and its relationship with s106 is systematic of changes in the wider planning regulatory system and subsequent tinkering with the CIL regs.

In conclusion, CIL and its relationship with s106 is far from perfect. Those LPAs that have adopted a CIL have done so after committing significant resource and many have made sound decisions in working through the complexities of the 2 track system; for instance by nil CIL rating strategic sites in favour of securing enabling infrastructure and Affordable Housing through s106 . It is hoped the Governments consideration of the CIL Review Team’s recommendations appreciates the impact changes to the wider planning system has on CIL and s106 as well as the likely impact any wide ranging changes to the current s106 / CIL system will have on scarce Council resources. In this regard, a sensible approach may be to relax the pooling restrictions on s106 allowing LPAs that don’t have a CIL to fully utilise s106 up until they bring forward a LIF; while those that have a CIL can continue to utilise their CIL Charging Schedules alongside a more flexible s106 regime up until the point where property market movements render their CIL Charges out of date. At this point they can move to the LIF system.