where 5 or more s106 obligations have already been entered into since April 2010 for the same project or type of infrastructure. This is a serious restriction on pooling. Bearing in mind that the regulation relates to obligations, and not agreements, 5 can be reached very quickly. It is not unusual for 2 or even 3 obligations in one deed to relate to the same item of infrastructure. Consider, for example, one obligation to pay monies and a second not to commence until the payment is made or infrastructure built. There are also potential evidential problems - how is a developer to find out what planning obligations already exist in relation to the development? Will charging authorities voluntarily supply lists of such obligations?


Bearing in mind the above, and considering also the current expectation that CIL will bring in around twice as much infrastructure revenue as s106 agreements currently do, it can perhaps be expected that most local authorities will bring CIL charging rates forward in the next couple of years.


…Get Set….


Before a charging schedule comes into effect, it must go through 2 stages of public consultation and a subsequent examination. Consultees are specified in the regulations and include neighbouring authorities, local residents and businesses.


As part of the evidence base for a charging schedule, an up-to-date development strategy for the area is vital. Local planning authorities must therefore decide early-on whether their adopted development plan is sufficiently up-to-date to support the introduction of CIL in their area.


The first stage of consultation is on a preliminary draft charging schedule and it is for each authority to decide how to consult and for how long. When considered ready for examination, the draft charging schedule must go through a more prescribed consultation process whereby the draft schedule and supporting evidence must be published and representations called for over a period of four weeks.


THE TERRIER - Summer 2012


At the examination stage, Government guidance suggests that the independent examiner will check for procedural compliance, appropriate supporting evidence and viability issues.


In setting their rate or rates, the authority must take into account the potential effects on the economic viability of development across its area and balance this with the desirability of using CIL to fund infrastructure.


Under the Regulations, authorities are under an obligation to keep their rates under review and report annually on what they have received and spent. However, there is no obligation to formally review the charging schedules at particular intervals. Given that changing a CIL rate would require further consultation and examination, there are concerns amongst some developers about whether CIL rates will be flexible enough to keep up with changing market conditions.


As well as setting the rates of CIL, charging schedules also need to deal with whether an authority will offer relief from the liability to pay the levy. The Regulations relating to exemptions are complex but suffice to say here that there are mandatory exemptions for charities and affordable housing, but each charging authority can also elect to offer a discretionary relief for investment activities by charities and for “exceptional circumstances”. The ‘exceptional circumstances’ relief can only apply to developments which are also subject to s106 obligations and then only if the authority considers that the s106 obligations impose a greater cost than the CIL payable and that paying the CIL in addition to meeting s106 obligations would have an unacceptable impact on the development’s economic viability.


Authorities should also consider at this stage whether to offer an instalment policy for the payment of CIL, and publish this on their website if they decide to do so.


…Go!


Once the charging schedule is in place, the authority’s job is far from done. The


introduction of CIL places a number of additional administrative burdens on authorities in relation to the calculation, collection and enforcement of CIL payments.


After granting planning permission, the charging authority must issue a liability notice on persons specified in the Regulations, setting out the amount to be charged. Liability ultimately rests with the landowner (although others can assume liability to pay) and the trigger for payment is the commencement of the development.


When calculating the amount due, authorities should bear in mind that no liability will arise in respect of non- residential, new build development of less than 100 sq m. There is also a statutory de minimis payment of £50 (below which no CIL is payable) and offset provisions for existing buildings which have been in use for at least 6 months in the 12 months leading up to the grant of consent. Further, CIL cannot be charged for planning permissions granted before a charging schedule came into force. That said, if (following a s73 application) a further consent is granted after the introduction of a CIL charging schedule, liability to the levy will arise. This is the case even where a s106 agreement has been entered into in relation to the original consent. This gives rise to one development being caught by both s106 obligations and CIL liability. In response to calls for amendment, the Government has stated that it hopes to bring in new arrangements by October 2012. Until then, developers will be concerned to negotiate s106 terms to counteract the risk of double liability.


Any claims for reliefs from liability must be made before development commences. A collecting authority must notify its decision on claims for any type of relief “as soon as practicable” as the claim will lapse where development commences before notification of the decision.


After receiving notice of the intended commencement of development (or after otherwise determining that development has commenced), the authority must serve a demand notice


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