Tag Archives: CIL

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.

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.