Category Archives: Community Infrastructure Levy

Out of date assessments no barrier to development plan or CIL Schedule

Challenges to a local planning authority’s adoption of a development plan document will rarely succeed. The task of testing the soundness of a development plan document is a matter for planning judgment, exercised within the relevant statutory scheme and against the background of relevant policy and guidance, rather than for the court.

In the Court of Appeal case of Oxted Residential Ltd v Tandridge District Council [2016] :the issue was: was it lawful for a local planning authority to adopt a development plan document and a Community Infrastructure Levy (“CIL”) charging schedule to underpin a core strategy prepared under national planning policy for housing land supply that had been superseded by the National Planning Policy Framework (“the NPPF”) in March 2012?

The first issue

In Gladman Developments Ltd. v Wokingham Borough Council [2014] Lewis J. had concluded that the inspector was “not required by reason of [the NPPF] to consider an objective assessment of housing need in order to assess whether this development plan document was sound”.

The Court of Appeal said whether a particular policy of the core strategy, or of the local plan was up to date within paragraph 49 of NPPF was a question that would arise in the making of a decision where an application had been made for planning permission for housing development – when it might be contended that the council is unable to demonstrate a five-year supply of housing land so that it’s “[relevant] policies for the supply of housing should not be considered up-to-date”.

So the council had not been required to consider an objective assessment of housing need before adopting the local development plan document.

The second issue

Given that there was no up to date local plan the appellant said:

1. it was impracticable for a charging authority to make a rational assessment of the need for infrastructure in it’s area.

2. Any calculation of the contributions to be made by developers in the form of CIL would depend on the amount of development properly planned for.

3. If there was no up to date local plan, with the required five-year supply of housing land, and the authority continued to rely on an out of date plan, the CIL charging schedule would bear no reasonable relationship to the infrastructure required or the source of contributions to that infrastructure.

Disagreeing the court said there was no statutory obstacle to the adoption of a CIL charging schedule when a relevant development plan document is, or may be considered, out of date in the light of subsequently issued national policy or guidance.

There is no requirement in the legislative framework which required a recently adopted plan to be in place before a CIL Schedule can be adopted, and there is no legal reason why a charging authority can only produce a CIL schedule if it has recently produced a plan.

Far from it being necessarily unreasonable for a charging authority to adopt a CIL charging schedule in such circumstances, it would often be the most practical approach to take

It had not been unreasonable for the examiner to accept the council’s argument that, although a review of the core strategy was now anticipated, in the meantime, it would be logical and sensible to have a CIL charging schedule in place to deal with the development planned in the core strategy as adopted, and to revise the CIL charging schedule in the light of the review of the core strategy, or earlier, under the legislative power to do so in section 211(9) of the Planning Act 2008.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Unnecessary Section 106 Contributions offended CIL Regulations

Regulation 122(2)(a) of the Community Infrastructure Levy Regulations (CIL) 2010 provides that:

“A planning obligation may only constitute a reason for granting planning permission for the development if the obligation is:

(a) necessary to make the development acceptable in planning terms;

(b) directly related to the development; and

(c) fairly and reasonably related in scale and kind to the development.”

In the High Court case of Midcounties Co-Operative Ltd, R (on the application of) v Forest of Dean District Council Trilogy & Anor [2015] the Claimant said that the Defendant planning authority adopted an inconsistent and therefore irrational approach to contributions being required under a section 106 agreement; and/or (b) there was a breach of Regulation 122(2)(a).

Special complaint was made against paragraphs of the Planning Officers’ report in which it was stated :

on the one hand that the section 106 contributions were:

– “necessary” to make the development acceptable in planning terms; and
– directly related to the development; and
– fairly and reasonably related in scale and kind to the development

even though they would not overcome or offset the impact of the scheme on the
town centre

and were therefore compliant with Regulation 122; and

on the other hand that even without the section 106 benefits
the grant of planning permission was justified here despite the conflicts with
planning policy.

Given that the second of these assertions was repeated several times in the Officer’s Report, the Claimant said the section 106 benefits were NOT actually “necessary” in order to render the development acceptable and Regulation 122 had been infringed.

The Court said that in fact nowhere in the Officers’ report had it been explained why the section 106 benefits were “necessary” to make the development acceptable.

To the contrary, the report explained elsewhere that the section 106 benefits could be ignored and the development would still be acceptable in planning terms.

Accordingly, the approach taken by the planning authority to the balancing judgment infringed the CIL regulations and so was flawed by an error of law.

Nor would the Court exercise its discretion to decline to quash the planning permission on this ground.

The balancing judgment was for the planning authority. The Court could not anticipate what the outcome would be if the planning authority undertook the exercise in accordance with a legally correct approach. It may be different.

So the planning permission was quashed on this ground. It was quashed on another ground too but this one would have sufficed.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Planning Obligation need not spell out specific mitigation measures

An obligation can only be imposed on a planning applicant under a Section 106 Agreement or Unilateral Undertaking if (amongst other things) it is necessary to make the development acceptable in planning terms.

In considering whether mitigating measures might make the adverse impacts of a proposed development acceptable in planning terms, the decision-maker must consider the nature and extent of the forecast adverse impacts and how the measures will deal with those impacts.

But, following the case below, that does not mean that the precise detail of the measures has to be specified at or before those planning obligations are entered into, and then concreted into those obligations. Especially when the planning authority is going to have control over the monies committed by the developer.

In the High Court case of Trashorfield Ltd, R (on the application of) v Bristol City Council & Ors [2014] the Claimant said the Planning Officers’ Report had admitted that the requirements (above) would only be met if a specific package of measures were identified and agreed following consultation. In other words that the Planning Committee had approved the application only on the basis) that that package of measures would be so identified and agreed with relevant stakeholders before any Section 106 Agreement was entered into.

In fact no such consultation or specific measures had been identified or agreed prior to the Section 106 Agreement. Nor had these yet happened.

So the Claimant said the Section 106 Agreement was:

(1) at odds with the legislative regime, especially regulation 122(2) of the Community Infrastructure Levy Regulations 2010 (“the CIL Regulations”) which limits section 106 obligations to those which are necessary to render the proposed development acceptable in planning terms; and

(2) beyond the powers of the relevant Planning Officer under his delegated powers.

The High Court Judge had last year ruled on the similar case of R (Hampton Bishop Parish Council) v Herefordshire Council [2013].

With reference to the proposed Retail Impact Risk Management Package the Officers’ Report had reminded the Council’s Planning Committee that:

“It is essential that any future scheme of mitigation is compliant with Part 122 of the [CIL] Regulations. This states that measures have to be necessary to make the development acceptable in planning terms; directly related to the development and fairly and reasonably related in scale and kind to the development.”

So in deciding as they did the Planning Committee plainly had this requirement in mind.

The judge said the grant of planning permission was inconsistent with neither (i) the basis upon which the Planning Officer approved the application, and thus was not outside his powers as delegated to him by the Planning Committee; nor (ii) the CIL Regulations.

The potential Retail Impact Risk Management Package would involve a total developer contribution of £202,500. split between management and project costs over a 3 year period. The split would be subject to agreement with the Council, stakeholders and other community groups.

The essence of the Officers’ Report was that if the developer retained control over the monies it had committed to retail impact mitigation, a mechanism would be needed in the planning agreement to make sure that there was proper consultation on the steps to be taken and that the developer was tied into consulting on and performing the measures that the Council considered appropriate. Otherwise, the measures might not be appropriate and as a result, the planning obligation might not be such as to make the development acceptable in planning terms.

In fact the developer did not commit a sum of money that they would spend on retail impact mitigation measures. Instead the developer paid a contribution to retail impact mitigation over to the Council, in two instalments, so that the Council’s commitment to apply funds to a town centre manager apart, the measures it was spent on, and their appropriateness in planning terms, were subject to consultation with those involved with the Town Centre and also to some tweaking to reflect the circumstances at the time of expenditure, but otherwise entirely in the control of the Council.

As the moneys were to be controlled by the Council, there had been no point deciding now what specific measures should be taken.

In fact to have pre-agreed and enshrined in the planning obligation “specific identified measures” for projects funded by that money, that would be implemented possibly five years hence, would have been difficult, unwise and (in terms of the CIL Regulations) quite unnecessary.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Council misapplied material considerations to out of town retail scheme

In the Court of Appeal case of Midcounties Co-Operative Ltd, R (On the Application Of) v Forest of Dean District Council [2014] the Claimant (“the Co-op”) had a supermarket in Cinderford town centre.

The developer (“Trilogy”) had agreed to contribute £471,000 under section 106 of the Town and Country Planning Act 1990 (“section 106”) towards town centre enhancements in line with the adopted Cinderford Town Centre Regeneration Scheme.

The Co-op challenged the Defendant Council’s (“the Council”) grant of outline planning permission to Trilogy for an out-of-town retail store (“the Site”) to be operated by Asda Stores Limited (“Asda”) on the main grounds that:

i) The Committee failed to have regard to a material consideration i.e. how the contributions to be made under section 106 would encourage trips to a town centre left “crippled” by the new out-of-town store and in any event had failed to give proper reasons.

The court found the Council’s reports provided no evidence on which they could have based an analysis of how the harm created to the town centre by the development would or might be mitigated by the section 106 contributions.

ii) The planning permission breached of regulation 122(2) of the Community Infrastructure Levy Regulations 2010 (“the CIL Regulations”), because the section 106 obligations imposed on the developer weren’t “necessary to make the development acceptable in planning terms”.

The findings under ground i) meant it was inevitable there had been a breach of regulation 122(2)(a) of the CIL Regulations . The Council’s failure to provide an adequate explanation for how the section 106 contributions would increase trips to the town centre meant that they could not be considered enough to make the development acceptable in planning terms.

iii) The Committee hadn’t provided a rational and adequately reasoned basis for departing from an earlier 1999 decision of the Secretary of State to refuse planning permission for a similar development at the Site where similar section 106 contributions/obligations had been on the table.

The Court found that the Council’s the Planning Committee had failed to distinguish this Scheme from the crucial findings of the Inspector and Secretary of State in 1998-9 that enhancements such as those incorporated into the section 106 obligations would not, of themselves, encourage people to visit a town centre seriously harmed by the planned out-of-town development. Nor were any analysis or reasons given for departing from it. In fact that earlier decision was indistinguishable.

iv) The Committee materially misconstrued paragraph 14 of the National Planning Policy Framework (“the NPPF”).

The court said paragraph 14 of the NPPF only applied where there is a policy lacuna so this ground was based on the wrong paragraph. Where (as here) there was an out-of-town retail development that would have a significant adverse impact on the vitality and viability of a town centre, and no such lacuna, paragraph 27 of NPPF applied. That created a presumption in favour of refusal of planning permission. The planning committee had been misdirected on this by a report which had indicated that the NPPF somehow supported the planning application.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Handing site to Council legitimate planning obligation

Regulation 122 of the Community Infrastructure Levy Regulations 2010 (“the CIL Regulations”) is a codification of principles developed in the case law – for example, in Tesco Stores Ltd v Secretary of State for the Environment [1995] – and provides:

“122(2) A planning obligation may only constitute a reason for granting planning permission for the development if the obligation is –

(a) necessary to make the development acceptable in planning terms;

(b) directly related to the development; and

(c) fairly and reasonably related in scale and kind to the development.”

Hampton Bishop Parish Council, R (On the Application Of) v Herefordshire Council [2014] concerned Hereford Rugby Club’s proposal to relocate from their current ground to an out-of-city ground. The club proposed development included nearly two hundred dwellings which would finance the new sports facilities.

One of the planning obligations entered into under section 106 of the Town and Country Planning Act 1990 (“1990 Act”) was for the transfer of the Rugby Club’s existing ground to the Council for £1 on completion of the move to the new site.

That proposed obligation was taken into account by the Council as a material consideration favouring the grant of planning permission.

The issue here was whether the Council thus acted in breach of regulation 122 of the CIL Regulations.

The Claimant said that the obligation to transfer the existing ground to the Council was not “directly related to the development” within the meaning of paragraph (2)(b) of the CIL Regulation:

1. The development would be several kilometres away from the existing ground.

2. The users of the development would have no continuing connection with the old ground.

3. The obligation related simply to the transfer of the freehold interest in the ground to the Council, with no restriction on use.

The transfer proposal had formed no part of the Rugby Club’s original application for planning permission but emerged, in a way that has never been explained, between the date of the planning officer’s first report (which strongly recommended against the grant of planning permission) and the Planning Committee’s first meeting.

In a judgment which took a wide view of the CIL Regulation the Court of Appeal said the transfer obligation was directly related to the development.

The existing ground would be released as a direct result of the development which was the subject of the planning application.

So, the ground’s future use was one of the land use consequences of the Council’s decision.

The ground’s existing use for sport might have continued anyway but the transfer to the Council, even without a restriction, would make that more likely.

This was very different from the Council “buying” planning permission which was what had been alleged.

It fitted comfortably within the requirement that the planning obligation be directly related to the development.

The same arguments could apply in a lot of cases and it will be interesting to see if others follow suite.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Recent changes to the Community Infrastructure Levy on Developing Property

On 24 February 2014 the Community Infrastructure Levy Regulations 2010 (CIL Regulations) were amended by the Community Infrastructure Levy (Amendment) Regulations 2014.

Mainly and in brief:

Under the CIL Regulations Councils can already adopt differential rates of CIL in their district based on locality and the sort of development envisaged be it for example retail, employment or housing.

CIL can now be charged at differential rates based on the scale of the development allowed by the planning permission – for example, dependent on how much floorspace, or how many units are planned within the development. So smaller schemes may be charged at a lower rate.

The CIL Regulations say that the rates of CIL must strike a balance between the desirability of receiving infrastructure funding from CIL and the impact on the viability of development in the council’s district. At the same time too low a rate of CIL could amount to unlawful state aid to Schemes under EU rules.

– A new formula for calculating what CIL is chargeable, with changes to the ‘vacancy test’ to avoid charging existing floorspace to be reused or demolished in the course of the build.

Under the old rules, to qualify to be discounted in this way, such floorspace must have been in lawful use for a continuous period of at least 6 months in the 12 months immediately preceding the date on which planning permission first permitted the development.

That had nasty timing implications for any scheme that needed get vacant possession during a period less than 6 months prior to the existing buildings being cleared.

The vacancy test now gives greater flexibility:

– pre existing buildings being retained for uses already lawful without new planning permission will not be subject to the vacancy test; and

– for all other pre existing buildings that the developer wants to be discounted from CIL, the ‘vacancy test’ now requires them to have been occupied for six months in the three years immediately previous to the date when planning permission first allows the development (not 12 months as previously).

In the case of a full planning permission the ‘date when planning permission first permits development’ will be the date on which the planning permission is granted.

Under the old rules it was the date of satisfaction of the last pre-commencement planning condition.

For an outline planning permission, the ‘date when planning permission first permits development’ will be the date of approval of the last outstanding reserved matter to be approved.

Where a planning permission is phased, the ‘date when planning permission first permits development’ for each phase is to be separately determined. It will be either the date of approval of the last outstanding reserved matter to be approved for that phase or, if there are no reserved matters for that phase, the date when the last pre- condition to commencement is discharged in respect of that phase.

Where the demolition of existing buildings qualifies for a CIL discount under the vacancy test the benefits of that discount now be spread across the phases of the scheme.

Hitherto the CIL Regulations only permitted phasing on ‘outline’ planning permissions. Phasing has now been extended to ‘full’ planning permissions also.

– Exempting residential annexes and extensions

To be exempt from CIL residential annexes must comprise only one new dwelling that is built entirely within the curtilage of an existing dwelling.

To be exempt from CIL extensions to existing dwellings must not comprise a new dwelling.

– Exempting self-build housing.

To be self-build houses exempt from CIL, these must be built by a person for occupation by that person as their main residence.

The exemption extends to self-build communal facilities built to benefit more than one occupier of self-build housing.

A self-built house can still be a self-build house if built on their behalf by a builder or developer rather than through the physical work of the individual occupant.

If the dwelling ceases to be occupied by the self-builder within three years the exemption allowed for self-build housing may be clawed back.

– Measures to reduce the requirement for developers to enter into highway agreements where the relevant infrastructure could be paid for by CIL.

The CIL Regulations prevent a condition being imposed in a planning permission that would require a developer to carry out highway works where those works are infrastructure for which CIL is payable.

The CIL Regulations also limit councils’ ability to get developer contributions towards infrastructure through section 106 agreements to prevent developer being required to carry out or fund infrastructure under section 106 agreements in addition to having to pay CIL.

This now extends to highway agreements.

– Local authorities now have until 6 April 2015 to adopt a charging schedule before the use of planning obligations under section 106 agreements becomes limited.

Changes to the rules on social housing relief.

– Discount market housing sold at 80% or less of its market value now attracts a new discretionary relief.

– The types of social housing that qualify for automatic relief include discounted rent housing where the rental is no more 80% of market rate.

– Communal areas can get CIL relief where and to the extent that they are intended for use by occupiers of qualifying social housing.

Appeals procedure changed to allow time for responding to representations to be extended by agreement.

CIL can now be paid for in kind by the developer providing infrastructure in lieu of CIL payment so that the cost of the infrastructure would be taken off the CIL charge.

Infrastructure being provided anyway by the Developer under a planning obligation cannot be treated as payment in kind.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Examiner had wide discretion to approve Community Infrastructure Levy Charging Schedules for Developments

The Community Infrastructure Levy (“CIL”) enables a local planning authority to levy on development in its area to fund infrastructure. It stems from Part 11 of the Planning Act 2008 (“the 2008 Act”), as amended by the Localism Act 2011.

Regulation 14 of the CIL regulations requires the charging authority to make judgments setting rates in a charging schedule. It must strike “an appropriate balance” between:

– the desirability of funding necessary infrastructure and

– the possible effects of CIL on the viability of development.

Other questions to be considered are whether:

– it is desirable to fund the total cost of infrastructure wholly from CIL, or only in part;

– what infrastructure is required “to support the development of [the charging authority’s] area”, and when it will have to be provided;

– what other sources of funding there are likely to be; and

– the likely ability of development to bear the burden of CIL and still provide enough profit for developers to make it worthwhile.

These questions require judgment by the charging authority.

In Fox Strategic Land and Property Ltd, R (on the application of) v Chorley Borough Council & Ors [2014] the claimant, Fox Strategic Land and Property (“Fox”) was a large landowner in the north-west. It was promoting housing development and wanted to ensure CIL did not unduly reduce the value of the land.

Here it challenged the CIL charging schedule for residential development adopted by Chorley Borough Council (“Chorley”), and two neighbouring authorities.

The three councils consulted on their proposed CIL charges and then submitted their revised draft charging schedules for examination.

Fox objected to the proposed CIL rate which was £65 per square metre.

An examination into the submitted charging schedules was held by an examiner appointed by the councils.

Fox argued that if CIL were charged at that level it would threaten the viability of housing development in Central Lancashire.

The examiner concluded that the charge of £65 was justified.

Fox sought an order to quash Chorley’s charging schedule for residential development.

In rejecting that application the court said that was a claim for judicial review.

In such proceedings the court did not hear an appeal against the conclusions the examiner had reached.

A claimant could not:

– re-argue a case presented and rejected at a CIL examination, or

– pursue a case on the merits put forward for the first time, or

– pursue enhancements, in evidence and submissions made before the court but not made at the examination.

The court could not interfere with the examiner’s judgment on matters of valuation or planning merit. Its jurisdiction is confined to the ambit of public law i.e. whether the decision was within the range that a reasonable tribunal properly constituted could have made based on material considerations.

This blog has been posted as a matter of general interest. It does not replace the need to get bespoke legal advice in individual cases.