CIL vs S106
The Regulation 123 list
The Funding Pie
The levy cannot be expected to pay for all of the infrastructure
required:
– 10-30%
– Consider CIL as just one part of a more complex blend of funding
Value
Regional Growth
Fund
Local Government
Grants
Borrowing
Capital reciepts
Business Rate
Retention
CIL
s106
A comparison of CIL vs S106
Planning Obligations
(Site specific negotiations)
Scope
What Type of Infrastructure can
it support?
Only items justifiable within the 3 legal tests:
a) necessary to make the development acceptable in
planning terms
b) directly related to the development
c) fairly and reasonably related in scale and kind to the
development
Yes - use to prescribe a proportion of affordable housing
contributions
All infrastructure necessary to support development of
the area
Geographic Application
Site specific impacts that may or may not reach beyond
the ‘red line’
Must cover whole Planning Authority Area with no
exceptions (room for differential rates)
What types of development are
eligible to pay CIL?
All development (but the time consuming nature of the
process means only the largest are charged)
Eligibility of Capital & Revenue
Capital & Revenue both eligible (Revenue for
maintenance & agreed revenue items)
Any development over 100m2
Building that people would normally go into.
(some further exemptions existing for charities and social
housing)
Capital & Revenue for ongoing maintenance
Can the money be pooled?
Not for long. After April 2014 you will not be able to
collect s106 contributions from 5 or more developments
CIL is effectively a pooling mechanism with complete
flexibility over spending priorities
Once the money is collected how
easy is to change what it is spent
on?
Is there a need to establish a list
of Infrastructure requirements
Items agreed within the s106 Agreement (this is often
inflexible). It cannot be spend on items identified for CIL
investment
The authority needs to justify s106 is necessary based on
the 3 legal tests (as above)
Setting differential rates
Negotiated proposal taking each development on its
merits
CIL can be spent on any infrastructure. Authorities need
to set out the items they intend to fund using CIL in a Reg
123 list.
Yes. Need costed infrastructure list to prove local need
(there is no emphasis on prioritisation at the evidence
gathering stage and explicit recognition that the list will
change over time)
Differences in rates should only relate to viability in
different zones or of different uses (not infrastructure
costs or the impact of a proposed development)
Charging Units
Flexible
Per m2 of additional floor space only (all uses)
Testing Viability
Case by case basis (leaving room for negotiation during
pre-application discussion)
Viability is tested at a borough-wide level at the evidence
gather stage, then CIL payments are mandatory
Can it be used to secure
Affordable Housing?
Setting
Charging
Levels
Community Infrastructure Levy
(Charging Schedule)
No
Implication of the New Guidance
Purpose of the Reg 123 list
• “double dipping” is a concern for
Developers
• Regulation 123 is the requirement
for a published list of infrastructure
projects or types of infrastructure
that the Charging Authority intends
will be, or may be, wholly or partly
funded by CIL, those infrastructure
projects or types of infrastructure.
• …put another way you cannot
collect s106 to spend on items
within your Reg 123 list
123 Golden Thread
Devising it:
• A draft Reg 123 list will now be
part of the examination
Post Examination:
• should be based on the draft list
examined with the charging
schedule
• Need to explain the reason for
change
• Appropriate local consultation
• Where a change to the
regulation 123 list would have a
significant impact on viability
evidence requires a review of
the charging schedule
Relevant Plan
Infrastructure
Evidence
CIL Infrastructure
Evidence
Funding Gap
Project List
Regulation 123
List
s106 Obligations
• When a charging authority introduces the Community Infrastructure
Levy, section 106 requirements should be scaled back to those matters
that are directly related to a specific site, and are not set out in a
regulation 123 list
• 3 legal tests:
a) necessary to make the development acceptable in planning terms
b) directly related to the development
c) fairly and reasonably related in scale and kind to the development
• Planning Obligations can be secured through:
– In-kind and financial contributions e.g. through the provision of land and
facilities, or funds
– On-off payments and phased payments, and maintenance payments
– Pool contributions
– Unilateral undertakings by developers – the applicant undertaking to the
Authority to deal with specific planning issues before planning permission
is granted
s106 Obligations
Planning Obligations may be:
• Unconditional or subject to conditions
• Positive, requiring the developer to do something
• Negative, restricting the developer from doing something
• Relate to specific financial payments based on formula and often
referred to as commuted
Timing is important :
• If a planning obligation specifies a timescale within which the
developer is required to undertake certain actions
• If the planning permission refers to the phasing of development, the
planning obligation may be linked to this phasing arrangement
• If the planning obligation is a commuted sum are the money must be
spent within a specified period.
Expenditure @ the Examination
1. Infrastructure Evidence:
– What, Where, How it will be funded
2. Viability evidence
– CIL & s106 as a development cost
– The extent to which s106 targets have been met
(performance on Affordable Housing & the
performance of tariffs)
3. Regulation 123 List
– intentions for your CIL receipts
4. How s106 policies will be varied
– A draft Supplementary Planning Document?
Planning Obligations Approach
• When to use s106?
• When to use CIL?
• (not to forget alternative
funding sources)
• Recognition of delivery
mechanisms
Local
context
Affordabl
e Housing
Objective
s
Developme
nt market
Planning
Obligations
Strategy
Strategic
Sites vs
Small
Sites
CIL
Technical
Viability
Implications on Council Resources
Education
Transport
Education
Transport
Community
Facilities
Green space
Health
Education
The greater demand on and for Council resources to deliver
Exercise 2
Discuss in small groups the particular challenges in your Councils that
you will face in producing a draft regulations 123 list and position on
s106.
Specifically, consider
–What will your Reg 123 list cover?
–What will your s106 position ‘statement’ be?
–What is the internal process you need to go through to agree this
before Examination?