Community Infrastructure Levy & S106 Workshop
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- Gerard Gibbs
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1 Community Infrastructure Levy & S106 Workshop
2 Introduction Changes to the planning system in both England and Wales over recent years. Means of securing planning contributions or infrastructure improvements has changed significantly. Set against the backdrop of the economic decline and Local Government reorganisation. Significant implication upon landowners, housing associates, developers, agents, etc. Presentation objectives Clarify definition of CIL & s106 Explain main differences between the two Set out the procedures relating to both Advise on the take up on CIL in Wales Definition of affordable housing option to secure Case Study Vale of Glamorgan Summary of best practice advice
3 Community Infrastructure Levy (CIL) Introduced by the Planning Act 2008 Came through the Community Infrastructure Levy Regulations 2010 What is CIL? LA s able to charge CIL on new development to support infrastructure needed by growth, includes education, community facilities and transport improvements Includes various improvements historically sought via s106 agreements Intended to simplify system to apply charges based on size and type of development, with charging authorities to set differing rates by type, size and location CIL not devolved to Welsh Government guidance comes from Department of Communities and Local Government (DCLG) Supporting guidance produced by Welsh Government CIL only in LPA s that have progressed LDP s to an advanced stage (Reg 123) So far, only few LPAs in Wales with adopted LDPs have adopted CIL
4 Which South Wales LPAs have adopted CIL? Caerphilly CBC (July 2014) Charges for residential (C3) development: Lower Viability Area Nil Mid-Range Viability Area - 25 Higher Viability Area 40 Merthyr Tydfil CBC (June 2014) Charges for residential (C3) development: Merthyr Tydfil - 25 Mid Valleys Nil Lower Valley - 25 Rhondda Cynon Taf CBC (December 2014) Charges for residential (C3) development: Zone 1 Nil Zone 2-40 Zone 3-85 Cardiff Council draft proposals at 70/m2 (September 2016). Monmouthshire draft proposals /m2 (March 2016). Both Cardiff and Monmouthshire have reductions for strategic sites. Carmarthenshire draft proposals 60/m2 within viable areas. Newport (Inspectors Report August 2016) adoption early Range from 20 to 45/m2
5 CIL Charging Schedule LPA prepares a Charging Schedule that identifies the level of CIL that will be applied to each type of chargeable development within its authority CIL is mandatory and will be charged against all new development that meets the qualifying criteria The CIL Charging Schedule must be informed by an appropriate evidence base (comprehensive viability study) Key Stages for Adopting a CIL Charging Schedule: Stage 1: Publication/Consultation on Preliminary Draft Charging Schedule Stage 2: Publication/Consultation on Draft Charging Schedule Stage 3: Submission for Examination Stage 4: Examination of the Draft Charging Schedule Stage 5: Adoption of the Charging Schedule and Implementation of CIL
6 CIL Process & Procedure
7 CIL Exemptions & Relief A number of developments may benefit from relief but this will depend upon the charging authority (some compulsory but others discretionary). Exemptions include; Minor development less than 100 square/metres Social housing relief Charitable relief Self build plots Exceptional circumstances relief If a relief or exemption is to be sought, must obtain formal agreement from charging authority prior to commencement, completing relevant forms Cannot obtain relief retrospectively.
8 S106 Contributions - Definition Section 106 of the Town and Country Planning Act 1990 (as amended) commonly known as s106 agreements, developer contributions or planning obligations mechanism to make development proposal acceptable in planning terms, that would not otherwise be acceptable site specific mitigation of the impact of development linked to a planning permission
9 S106 Contributions -Function Commonly used to secure affordable housing and to specify the tenure and phasing of this housing Also used to secure delivery of other infrastructure improvements or financial contributions towards such improvements However these are not the only uses for a s106 obligation which can: restrict the development or use of the land in any specified way require specified operations or activities to be carried out in, on, under or over the land require the land to be used in any specified way; or require a sum or sums to be paid to the authority..
10 S106 Contributions Regulation 122 The legal tests for when you can use a s106 agreement are set out in Regulation 122 and 123 of the Community Infrastructure Levy Regulations 2010, as amended. The tests are: 1. necessary to make the development acceptable in planning terms, 2. directly related to the development; and 3. fairly and reasonably related in scale and kind to the development. Must be demonstrated that obligations satisfy these tests not sufficient to rely on LPA s standard per plot requests (especially at appeal/jr).
11 S106 Contributions Procedure The general process for agreeing the main obligations, drafting an agreement and completion is as follows; Review, negotiate and agree level of contributions with LPA can start at pre-application advice stage but often not finalised until application appraisal stage Completion of development appraisal/viability testing of proposal, if required Determination of the application with main heads of terms agreed Instruction of solicitors to draft legal agreement can be prepared in advance of determination but this is down to discretion/resourcing of the LPA Following review and agreement over any modifications, agreement is signed by both/all parties and engrossed Once legal agreement is signed the planning permission is released
12 S106 Contributions Amendments Under s106(a) a person bound by the obligation can seek to have the obligation modified or discharged after five years. Before 5 years, the agreement can only be modified in agreement with the LPA The Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 set out the procedure for making an application to amend planning obligations, including use of standard forms. The principles for modifying an obligation are that it "no longer serve a useful purpose" or "continues to serve a useful purpose equally well. Can also seek to vary a s106 through the use of a Deed of Variation most often used when details of the original permission have changed.
13 S106 Contributions Enforcement The planning obligation is a formal document, a deed, which states that it is an obligation for planning purposes, identifies the relevant land, the person entering the obligation and their interest and the relevant local authority that would enforce the obligation If the s106 is not complied with, it is enforceable against the person that entered into the obligation and any subsequent owner The s106 can be enforced by injunction In case of a breach of the obligation the authority can take direct action and recover expenses The obligation can be a unitary obligation (UU) or multi party agreement (S106/bilateral). The obligation becomes a land charge.
14 Differences between s106 & CIL CIL expected to replace much funding historically secured via s106 Area wide infrastructure as opposed to site specific CIL, unlike S106 contributions, is not negotiable CIL Regulations introduced restrictions on use of S106 (April 2015) to avoid duplication (maximum of five pooled contributions) S106 is a devolved matter whilst CIL is not LPA s required to publish list of infrastructure projects it intends to fund (knows as Reg 123 list). S106 contributions can only be sought for projects, considered to meet the relevant tests and not included on the Reg 123 list.
15 Affordable Housing Tan 2 definition housing where there are secure mechanisms in place to ensure that it is accessible to those who cannot afford market housing, both on first occupation and for subsequent occupiers. However, it is recognised that some schemes may provide for stair casing to full ownership and where this is the case there must be secure arrangements in place to ensure the recycling of capital receipts to provide replacement affordable housing. Affordable housing includes: Social rented housing - provided by LPA s & RSL s Intermediate housing - prices or rents above those of social rent but below market prices/rents. All other types of housing are referred to as market housing - that is private housing for sale or rent where the price is set in the open market and their occupation is not subject to control by the local planning authority.
16 Affordable Housing S106 or Condition WG advises that the provision of affordable housing can be secured either by condition or through s106 agreement. Most LPA s favour the use of s106 as opposed to conditions, whereas PINS routinely accept the use of conditions (avoid complication of inclusion legal agreement) However, lenders often insist on S106s because it is perceived they provide greater certainty TAN 2 offers a number of example situations setting out where the different options might be favoured; 1. Where site is being developed privately with a proportion of affordable units are to be transferred either s106 or conditions could be employed with details required to secure trigger points of delivery, tenure, definition of provision, etc. 2. Where RSL develops and manages houses WG s regulatory control should normally be provide sufficient safeguards; exception is rural exception sites where either conditions or s106 could again be employed to include cascade mechanism 3. Where site is being developed privately with a proportion of affordable units are to be transferred, but no RSL is involved a s106 should be employed Understood that differing contract situations favour differing mechanisms (securitization) discuss? Need to engage in early dialogue with Planners and Housing Officers to agreed preferred method
17 Case Study/Example - 50 unit scheme in Vale of Glamorgan CIL VoG don t have LDP (therefore no Reg 123 list) and so CIL not currently applicable S106 LPA s standard wish list as per their SPG would be as follows; Affordable Housing 35-40% (80:20 split [social:intermediate]) Education 2,264,061 Public Open Space 114,000 Sustainable Transport 100,000 Community Facilities 49,425 Admin Fee 3,800 or 2% S106 contributions (if greater) 2,531,286 Total cost* *Does not include affordable impact which would be equal to discount of 1,768,616 [42% ACG provided to developer for social & 70% OMV for intermediate.
18 Case Study/Example - 50 unit scheme in Vale of Glamorgan S106 Whilst the LPA would point to such requests being in accordance with SPG, the guidance does say where applicable and more importantly Reg 122 needs to be considered. LPA s rarely test the requests received which are normally based on a worst case scenario. The requests made need to therefore be investigated as follows; Affordable Housing Education - Is the % in line with Policy - Does the requested mix, size, type accord with Housing Needs Survey - Is capacity available in schools within catchment - what is the forecasted numbers on roll - what school age population is the development likely to generate - apartment provision? - in this example demonstrating capacity in primary schools (14 places predicated) the request would be reduced by 1,619,885
19 Case Study/Example POS what provision is available within the vicinity of the site what level of provision is available to for the ward if a surplus it will be difficult for LPA to argue for more is provision being made on site? The provision of a LAP may avoid the need to make any off-site contribution (but costs of implementation and maintenance costs would need to be considered) Sustainable Transport how sustainable is the sites what existing transport opportunities are available within the vicinity what provisions does the development proposal already make (pedestrian links, cycle storage, green travel plan, etc.). Community Facilities what provision is available within the vicinity what provision is available within ward again, if surplus difficult for LPA to argue need for additional Admin Fee - recent case law Three Dragons/Appraisal process
20 Summary Advice CIL CIL is not negotiable; only able to influence charging schedule upon review Social housing is exempt however Must ensure CIL notices are completed and returned at appropriate stages S106 S106 still applicable but will be for limited means Must review LPA requests to ensure comply with Reg 122 If resultant contributions still unavailable will need to progress development appraisal LPA s under resources and more often rely on DV expect delays
21 Asbri 2 offices 14 Planners 3 Highways Consultants Cardiff Unit 9, Oak Tree Court Cardiff Gate Business Park Cardiff CF23 8RS T: E: barrie@asbriplanning.co.uk Questions? Contact Details Swansea Suite 4 The J Shed Kings Road Swansea SA1 8PL T: E: richard@asbriplanning.co.uk phil@asbriplanning.co.uk
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