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Simple, predictable, and on their way out?

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LGC’s essential daily briefing.

Prepare to say goodbye to the short-lived era of supposedly simple, predictable, and transparent contributions to councils that accept development.

Communities secretary Sajid Javid confirmed this week that he will be taking a hatchet to the new homes bonus, diverting part into the black hole of social care and heavily reducing its availability.

Now, as LGC reports this afternoon, a government-commissioned review has concluded the community infrastructure levy (CIL) is unworkable and should go.

Both were based around the idea that councils would get a pre-determined financial contribution in return for granting planning consents, whether related to council tax from the new homes bonus or infrastructure costs from CIL.

No more would developers pay according to tortuous individual negotiations, but simply stump up a tariff payment as though they were in a restaurant.

Things didn’t work out like that. Only 130 councils set a CIL since its 2010 inception. The rest - mostly in lower value areas - feared it would make desirable developments unviable.

Those that did set a CIL found it was paid in stages so they did not get the money upfront, leading to mismatches of developments with no infrastructure rather than infrastructure being ready and waiting for projects.

To add insult to injury, councils were barred from borrowing against future CIL income.

The review concluded that “CIL has not provided the universal and therefore ‘fair for all’ approach to developer contributions that was originally envisaged”, had raised “much less than anticipated”, and had been much more complex than intended.

It proposed three replacements. The first was a low universal tariff set nationally but charged by size and local property values, which would contribute to infrastructure unrelated to specific sites, such as new roads to serve a growing population.

The second was a levy available to combined authorities for a few large pieces of identified infrastructure.

The third was an old friend, section 106 of the Town and Country Planning Act 1990. This allowed originally for negotiations between councils and developers over contributions towards infrastructure of all kinds and it has survived under CIL mainly for affordable housing.

Now it could be back to the future with section 106 used once again for both affordable homes and anything that a council can - with a straight face - define as ’site specific’ infrastructure.

The probable fates of both CIL and the new homes bonus mark the waning of an approach supposed to make development’s contributions to public funds fixed and transparent, rather than the result of lengthy, contentious, and somewhat opaque negotiations.

For those more adept at handling section 106 discussions, the demise of CIL might not necessarily be a bad thing.


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