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Home Builders Federation
February 2015
Community Infrastructure Levy
Regulation 123 (3) Post 5 April 2015
Report Commissioned by the Home Builders Federation
February 2015
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Report Commissioned by the Home Builders Federation
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Introduction
This paper has been jointly prepared by Savills and Charles Russell Speechly for the HBF in order to highlight the issues that
will be faced by the house building industry in seeking to provide infrastructure that is necessary to enable residential
development to come forward post 5 April 2015.
The introduction of the Community Infrastructure Levy (“CIL”) is intended to generally shift the funding or provision of, in
particular, strategic infrastructure, that is required to make a development acceptable in planning terms, away from the use of
section 106 planning obligations to CIL receipts.
The purpose of CIL is to make the system for the funding or provision of infrastructure fair and transparent. However, the extent
of this shift depends on whether (or how) any charging authority has chosen to implement CIL. Many are seeking to retain the
use of planning obligations on large sites or within defined development areas. Developers and Local Planning Authorities want
to see infrastructure that is necessary, directly related and fair and reasonably related to a the proposed development delivered.
Regulatory Background
Regulation 123 of the Community Infrastructure Levy Regulations 2010 (as amended) is intended to restrict the use of planning
obligations as a reason for granting planning permission in favour of the collection of CIL. It is split into two distinct parts:
1.
from midnight on 5 April 2015 regulation 123(3) will prohibit all local planning authorities in England and Wales from
requiring a planning obligation that pools funds for infrastructure provision;
2.
if regulation 123(3) does not prohibit the requirement for that planning obligation and the charging authority has a
charging schedule in place then regulation 123(2) will apply. That prohibits a planning obligation from constituting a
reason for granting planning permission where it provides for the funding or provision of infrastructure that is stated or
should have been stated to be funded through CIL receipts.
The issues
By 6 April 2015 it is anticipated that around 75% of charging authorities will not have a charging schedule in place. Whilst
regulation 123(2) will not be a consideration for those authorities regulation 123(3) will have effect in restricting the use planning
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February 2015
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obligations for infrastructure provision as a reason for granting planning permission. Without any CIL receipts to fund that
infrastructure the concern is that development may stall. There is a risk that planning applications that would have relied upon
the use of planning obligations to meet the infrastructure requirements necessarily for, directly related and fairly and reasonably
related to that proposed development are likely to be refused or not determined.
A secondary issue is that, in order to allow an informed consideration of whether a requirement for a planning obligation as a
reason for granting planning permission is lawful, there is a need for an accurate and up to date record of planning obligations
that have been entered into on or after 6 April 2010.
In the absence of a clear solution to these two issues, there are very significant risks of delay to housing delivery post 5 April
2015.
Solutions
Whilst regulatory change is likely, in the short term, to be out of the question, further guidance on the use of planning obligations
and how LPA’s should consider infrastructure provision where there is not a charging schedule in place post 5 April 2010 would
be welcome.
There is a relatively simple solution to the evidential issues in respect of details of planning obligations entered into on or after 6
April 2010. This paper outlines a model Planning Obligations Disclosure Schedule, which we consider should be produced and
made public by all LPAs ahead of the 6 April 2015 deadline.
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February 2015
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Regulation 123 Restrictions
After 5 April 2015, the ability for Local Planning Authorities (LPAs) to secure funding for infrastructure through planning
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obligations pursuant to section 106 will be restricted by regulation 123 of the Community Infrastructure Regulations 2010 (as
amended).
There are two parts to regulation 123, for the purposes of this paper regulation 123(3) should be considered first. Only if a
planning obligation that is a reason for granting permission does not fall foul of the restrictions in regulation 123(3) and there is a
charging schedule in force does regulation 123(2) need to be considered.
In circumstances where a proposed obligation passes the regulation 123(3) and 123(2) tests, consideration must be given at all
times to the provisions of regulation 122(2) where by a planning obligation may only constitute a reason for granting planning
permission if that obligation is:
(a)
necessary to make a development acceptable in planning terms;
(b)
directly related to the development; and
(c)
fairly and reasonably related in scale and kind to the development.
Regulation 123(3) restricts the use of planning obligations as a reason for granting planning permissions where five or more
planning obligations had been entered into within the area of a charging authority on or after 6 April 2010 for funding or
provision of the same type of infrastructure or the same infrastructure project.
Whilst the regulation refers to the area of a charging authority this will usually equate to the area of a local planning authority. In
two tier areas that means that the planning obligations that count towards the five entered into on or before 6 April 2010 will
those entered into with the District and the County.
The purpose of the regulation is to restrict pooling of receipts from planning obligations towards infrastructure types and
infrastructure projects. The restriction, which, before 6 April 2015, applies only to local planning authorities with a charging
schedule in force in their area, will, from midnight on 5 April 2015 apply across all of England and Wales.
1
Town and Country Planning Act 1990
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One point worth noting here is that regulation 123(3) only applies to a planning obligation that constitutes a reason for granting
permission. On the face of it an LPA faced with a regulation 123(3) restriction could simply state that the offending planning
obligation offered to secure an infrastructure type or project was not considered as a reason for granting planning permission
and thus circumvent the regulation 123(3) restrictions. Our view is that taking such an obvious stance intended to avoid the
effects of regulation 123(3) would leave any grant of planning permission open to a successful judicial review challenge.
The potential that regulation 123(3) restrictions may have on the delivery of housing are clear. Faced with such a restriction a
local planning authority will have few choices where it regards the provision of infrastructure types or projects material,
necessary, relevant and fair and reasonable in order to the grant of planning permission for the proposed development:

to refuse the application on the grounds that the infrastructure or some of the infrastructure that is necessary, directly
related and fair and reasonably related in scale and kind to a proposed development cannot be secured; or

to approve the application without securing that infrastructure through the use of planning obligations; or

to fail to determine the planning application hoping for a legislative change.
Whilst there may be other methods of securing the necessary infrastructure to avoid unnecessary delay clear guidance is
required in that respect.
If there is not any regulation 123(3) restriction on the use of the planning obligation as a reason for granting permission then, if
the charging authority has brought a charging schedule into effect Regulation 123(2) will apply.
Regulation 123(2) prohibits a planning obligation that provides for the funding or provision of relevant infrastructure once a
charging schedule is in place constituting a reason for granting planning permission. Relevant infrastructure is defined as the
list of infrastructure projects or types of infrastructure published on the charging authorities website or, if no such list has been
published, infrastructure as defined (widely) in section 216 of the Planning Act 2008.
The web site list should form part of the evidential base used for the examination of the charging schedule and should not be
varied without consultation.
The intention of Regulation 123 is to ensure that both the requirement and justification for planning obligations is clear and to
encourage charging authorities to pursue CIL rather than planning obligations as a method of securing all but site specific
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infrastructure delivery.
The fact that the power to secure planning obligations remain, reflects the intention that certain
obligations, specific to a development proposal, may still constitute a reason for granting planning permission.
For smaller (say 150 dwellings and less) developments the purpose and use of CIL may (if the issues outlined above can be
satisfactorily dealt with) be successful. The experience of HBF members is that this is not the case with larger (150 dwellings
and above) developments. For smaller developments those requirements would have previously used pooled funding and are
an ideal use of CIL.
For larger developments, where the large scale project specific infrastructure provision is frequently required, the use of CIL is
often inappropriate and there are, as outlined above, serious issues with the continued use of planning obligations. Our advice
is that such larger schemes should be exempt from CIL and, though legislative change be exempt from the regulation 123
restrictions. In the event that larger scale schemes were exempted from CIL, the tests required by regulation 122(2) should
remain, and the provisions of both regulation 123(3) and 123(2) would continue to apply to smaller scale schemes.
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Post 5 April 2015 Charging Schedule Progress
By the end of 2015, it is anticipated that 201 charging authorities will not have a charging schedule in place, equivalent to over
half (57%) of all LPAs.
A minority of charging authorities, 7%, are currently not pursuing or committed to the idea of
implementing a charging schedule. By 6 April 2015, it is anticipated that up to 75% of charging authorities will not have a
charging schedule in place. As at 4 February 2015, 57 charging authorities have charging schedule in place, with a further 56 at
Examination (circa 32% of the total).
Figure 1 provides the breakdown. Figure 2 provides an indication of the timing of likely CIL implementation.
Figure 1: Progress on CIL Implementation in England & Wales to date (February 2015)
Source: Savills (correct as at 4 February 2015)
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Figure 2: Indication of Onward Progress on CIL Implementation (February 2015)
Source: Savills (correct as at 4 February 2015)
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Post- 5 April 2015 – Two Scenarios
As discussed in this paper post-5 April 2015 all charging authorities (and thus LPA’s) will be subject to Regulation 123(3) (see
Diagram 1).
Diagram 1: LPAs’ Planning Obligations – Post 5 April 2015
CIL Charging Schedule in place
BEFORE 6 April 2015?
YES
Regulation 123(2) - “Relevant Infrastructure List” should be
NO
Regulation 123(2) does not apply.
produced stating the infrastructure that may be partly or wholly
funded by CIL. A planning obligation that provides for the
Regulation 123(3) (Section 106 restrictions) –
funding or provision of the infrastructure projects or types of
LPAs should provide details of all the planning obligations
infrastructure on that list may not constitute a reason for
entered into on or after 6 April 2010 that relate to planning
granting planning permission.
permissions granted within their area (Planning Obligations
Disclosure Schedule). This information will guide what
Regulation 123(3) (Section 106 restrictions) –
infrastructure projects or types of infrastructure may constitute
LPAs should provide details of all the planning obligations
a reason for granting planning permission.
entered into on or after 6 April 2010 that relate to planning
permissions granted within their area (Planning Obligations
Regulation 122(2) tests will need to be satisfied for the
Disclosure Schedule). This information will guide what
planning obligation to be lawful, that is the planning obligation
infrastructure projects or types of infrastructure may constitute
must be:
a reason for granting planning permission.
(a)
necessary to make a development acceptable in
planning terms;
Regulation 122(2) tests will need to be satisfied for the
(b)
directly related to the development; and
planning obligation to be lawful, that is the planning obligation
(c)
fairly and reasonably related in scale and kind to the
must be:
development.
(a)
necessary to make a development acceptable in
planning terms;
(b)
directly related to the development; and
(c)
fairly and reasonably related in scale and kind to the
Note: Estimated to be up to 75% of LPAs
development.
Note: Estimated to be up to 25% of LPAs
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The Planning Obligations Disclosure Schedule
In order for clear and transparent interpretation of Regulation 123(3) all charging authorities (and thus) LPAs should be
encouraged to prepare and publish a ‘Planning Obligations Disclosure Schedule’. The Disclosure Schedule will be a factual
statement and outline where each charging authority/LPA stands in respect of Regulation 123(3). In preparing the Disclosure
Schedule, it is important that a charging authority/LPA considers carefully whether a planning obligation relates to the funding or
provision of an infrastructure “types” or an infrastructure “project”. A model proposed Disclosure Schedule is set out below.
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PLANNING OBLIGATIONS DISCLOSURE SCHEDULE
Community Infrastructure Levy (CIL) Regulations (2010) (As Amended):
Regulation 123(3) – Further limitations on use of planning obligations
Name of Charging Authority.......................................................................
CIL Charging Schedule in place?
Y/N
Date.......................................
The following provides a Disclosure Schedule in respect of CIL Regulation 123(3). It is a statement of fact in respect of those
planning obligations entered into on or after 6 April 2010 for development proposals within the administrative area of the
charging authority/LPA. The purpose of the Disclosure Schedule is to identify the circumstances where any obligation “may not
constitute a reason for granting planning permission” (emphasis added).
Important Notes
The Disclosure Schedule should be updated by the charging authority/LPA as any new planning obligation is entered into
pursuant to section 106 of the Town & Country Planning Act 1990 (as part of the planning register updates). It must outline all
of the relevant planning obligations entered in to on or after 6 April 2010 and must be duly published on the charging
authority/LPA website.
It should be noted that in the context of Regulation 123(4), relevant planning obligations will be all of those listed overleaf,
including those that apply to:

implemented and unimplemented planning consents;

part or unimplemented extant consents; and

consents which have expired.
In two-tier authorities it is important to ensure that planning obligations related to County Council or other local planning
authority permissions for development within that charging authority’s area are recorded (e.g. waste, minerals and education
obligations). It is therefore strongly advised that a charging authority/LPA takes a co-ordination role, particularly in two-tier
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authority areas to ensure that the Disclosure Schedule includes all planning obligations entered into for defined infrastructure
“types” and “projects” on or after 6 April 2010.
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Which planning obligations should be included on the Disclosure Schedule?
Note: planning obligations refer to those entered into pursuant to section 106 of the Town and Country Planning
Act 1990 (as amended)
INCLUDE
 All planning obligations entered in to on or after 6
 Planning
obligations
that
relate
to
planning
April 2010 (including all those enforceable by the
permission that are no longer extant or capable of
County, District or other local planning authority, those
implementation are relevant
that
relate
to
developments
granted
planning
permission by the LPA, the secretary of state or as a
EXCLUDE
result of a section 73 application)

Planning obligations entered into in respect of an
 Planning obligations where the planning permission
appeal of called in application where that appeal or
has been implemented but not completed (i.e. has
call in does not result in the grant of a planning
commenced)
permission
 Planning obligations where the planning permission
has been implemented in full (i.e. has completed)
 Planning obligations that are included in both
Unilateral undertakings or multilateral agreements
are relevant
 Planning obligations that are related to revoked
planning permissions are relevant
 Planning
obligations
that
relate
to
planning
permissions that have not been implemented are
relevant
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THE DISCLOSURE SCHEDULE
Infrastructure Type and any
relevant Projects within the Type
Relevant
Planning
Decision
(LPA
Reference)
Date of
Obligation
Obligation Type
(and any relevant
information, i.e.
Unilateral)
Clause
Number
Obligation
(exact wording)
Number of
Obligations
related to
Infrastructure
Project or
Type
(Cumulative)
A)
ROADS
&
OTHER
TRANSPORT FACILITIES
LIST (for example items which
were previously pooled)
Relevant Projects
[LIST] (all Projects within the type)
B) FLOOD DEFENCES
LIST (for example items which
were previously pooled)
Relevant Projects
[LIST] (all Projects within the type)
C)
SCHOOLS
&
OTHER
EDUCATIONAL FACILITIES
LIST (for example items which
were previously pooled)
Relevant Projects
[LIST] (all Projects within the type)
D) MEDICAL FACILITIES
LIST (for example items which
were previously pooled)
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Infrastructure Type and any
relevant Projects within the Type
Relevant
Planning
Decision
(LPA
Reference)
Date of
Obligation
Obligation Type
(and any relevant
information, i.e.
Unilateral)
Clause
Number
Obligation
(exact wording)
Number of
Obligations
related to
Infrastructure
Project or
Type
(Cumulative)
Relevant Projects
[LIST] (all Projects within the type)
E)
SPORTING
AND
RECREATIONAL FACILITIES
LIST (for example items which
were previously pooled)
Relevant Projects
[LIST] (all Projects within the type)
F) OPEN SPACES
LIST (for example items which
were previously pooled)
Relevant Projects
[LIST] (all Projects within the type)
G) OTHER INFRASTRUCTURE
TYPES/ PROJECTS
e.g. Libraries
e.g. Community
e.g. Police
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