UPDATE - New Guidance relating to Planning and Community Infrastructure Levy and S106

In addition to the recent measures announced by the Government aimed at stimulating the housing market (refer to our summary here) the Government also published on 13 May 2020 new temporary guidance aimed at making it easier for the planning system to operate and to give greater assistance to developers and the housing market

The measures introduced by the Government include:

• Changes to the planning process
• Changes to the application and processes relating to Community Infrastructure Levy and payments due pursuant to S106

The full text of the guidance can be found here but here is a brief summary of these new measures:

Planning

• Permitted Development Rights - A new time limited emergency permitted development right has come into force which allows development by or on behalf of a local authority or health authority body for the purposes of dealing with emergencies. The right enables development including, but not limited to, change of use for existing buildings and new temporary modular buildings. The rights could be suitable to provide permission for a range of uses including use as hospitals, health facilities, testing centres, coroner facilities, mortuaries, additional residential accommodation and storage and distribution, including for community food hubs.
  There is no application process, and health service bodies and local authorities who are not the planning authority are required only to notify the local planning authority of the use of the development on a site as soon as practicable after commencing development.
• Validation of Applications - Many local authorities have recommended that planning applications are submitted online to avoid the need for staff to work in the office. Whilst paper applications are still accepted, online applications are now encouraged.
• Determination Dates - The Government has indicated that it does not intend to change the current timescales for determination of planning applications but it does acknowledge timescales may not be met in all cases. Developers should be encouraged to agree extensions of time where necessary but retaining the timescales means there is still the option to appeal to the Secretary of State on the grounds of non-determination.
• Publicity and Consultation for Planning Applications - Local planning authorities now have the flexibility to take other reasonable steps to publicise applications if they cannot discharge the specific requirements for site notices, neighbour notifications or newspaper publicity. These steps must be aimed at notifying people who are likely to have an interest in the application and indicate where further information about it can be viewed online. These steps can include the use of social media and other electronic communications and must be proportionate to the scale and nature of the proposed development.
  The Government will issue further guidance on this in due course.
• Virtual Planning Committees - New regulations were introduced in early April to provide the power for local authorities to hold virtual meetings. To ensure planning decisions continue to be made, the Government has recommended that local planning authorities take advantage of these powers to hold virtual planning committees – rather than deferring committee dates – and use ‘urgency powers’ within their constitutions to give senior officers delegated authority to make decisions.
• Local Plans - The Government have made it clear that they wish to see Local Plans being progressed through the system despite the difficulties that the current restrictions may cause. Local authorities are encouraged to make efforts to progress the Local Plans.
• Neighbourhood Planning - The Government has introduced changes to the neighbourhood planning process to support local authorities and provide some reassurance to communities with neighbourhood plans that are awaiting referendum. Regulations linked to the Coronavirus outbreak mean that no elections or referendums can take place until 6 May 2021, and this includes neighbourhood planning referendums. These provisions will be kept under review and may be amended or revoked in response to changing circumstances.
  The Government has set out that neighbourhood plans awaiting referendums can be given significant weight in decision-making, and will allow local authorities to make claims for new burdens grants at an earlier point in the neighbourhood planning process.
• Compulsory Purchase Orders - The government wants to see CPOs continue to be progressed, but they recognise the statutory process for making and confirming a CPO under the Acquisition of Land Act 1981 has several requirements which are more challenging to achieve within current public health guidelines, such as in relation to public access to documents. The Government has stated that Acquiring authorities should consider pragmatic ways of adhering to these requirements given the exceptional circumstances.

Community Infrastructure Levy

The Government has stated that it is recognised that smaller developers may need help during the current restrictions to ease the burden that CIL may have on their cash flow. To help address this, the government has proposed to amend the CIL Regulations to give CIL Charging Authorities more discretion to defer payment for small and medium sized developers without having to impose additional costs, penalties and interest.

The measures proposed can be summarised as follows:

• Instalment Policies - CIL Charging Authorities already have the power to allow CIL to be paid in one or more instalments and can set the date(s) on which each payment is due.
  In the absence of such a policy, CIL is payable - in full - at the end of the period of 60 days beginning with the intended commencement date.
  The Government intends to allow CIL Charging Authorities to bring into effect new instalment policies at any time but are likely to only apply to chargeable developments commencing after the new instalment policy comes into effect. Each phase of a phased development is considered to be a separate chargeable development for CIL purposes so later phases that have not yet commenced could be subject to the new instalment policies. 
• Enforcement - CIL collecting authorities are to be given more discretion as to how they deal with the late payment of CIL in order to ease the financial pressure on developers. A CIL collecting authority has the power to stop development until the outstanding amount has been paid but authorities are being encouraged to think carefully about imposing such measures in the current climate.
  Similarly, a CIL collecting authority has the ability to impose surcharges on developers that have not paid CIL. However, the imposition of these surcharges is at the discretion of the authority and CIL collecting authorities are therefore being encouraged to use discretion more widely where appropriate.
  CIL collecting authorities currently have no discretion to ‘disapply’ the accrual of interest on late payments. To address this, the Government has proposed to enable collecting authorities to i) defer payments, ii) to temporarily disapply late payment interest and iii) to provide a discretion to return interest already charged where they consider it appropriate to do so for developers that have an annual turnover of less than £45million. This may include interest that has accrued in the period between the introduction of the lockdown and the regulatory changes coming into effect. It is intended that this relaxation will not be open-ended and will be removed when the economic outlook has improved. 

Whilst many of these changes will need to be debated in Parliament and formally ratified by way of amendments to the CIL Regulations (which is likely to cause delay) CIL collecting authorities are able to immediately consider:

• the introduction of instalment policy (or amend an existing instalment policy) 
• use discretion when considering enforcement action in respect of unpaid CIL liabilities 
• take a positive approach to their engagement with small to medium sized developers, to ensure CIL liabilities do not cause undue burdens over the period of disruption caused by the coronavirus; and
• CIL authorities should note the existing flexibilities they have around enforcing CIL for larger developers, including flexibilities over the imposition of surcharges. Late payment interest will remain mandatory where such flexibilities are used.

Section 106 Agreements

The Government has stated that where the delivery of a planning obligation, such as a financial contribution, is triggered during the current health crisis, local authorities are encouraged to consider whether it would be appropriate to allow the developer to defer delivery.

Deferral periods could be time-limited, or linked to the government’s wider legislative approach and the relaxation of CIL provisions as set out above and recommends that deeds of variation are used to agree these changes. Local authorities are encouraged to take a pragmatic and proportionate approach to the enforcement of section 106 planning obligations during this period with the aim of removing barriers for developers and minimising the stalling of sites.

Comment

This would appear to be a positive step by the Government with a view to reigniting the housing market but it remains to be seen how effective they will be and how the local authorises will react to the “encouragement” to be more flexible. It will also be interesting to see if and how quickly the necessary legislative processes will take to bring into force some of the changes proposed to the CIL Regulations.

The Government will also need to monitor the impact of these proposals on the timely funding and provision of infrastructure and other community projects funded by CIL and S106 receipts.

Given the cliff edge decline in the housing market over the last month or so would a much called for relaxation to Stamp Duty rules have been a more welcome measure or would that have been a step to far and removed the prospect of using Stamp Duty concessions in the future if these measures do not have the desired effect?