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15th November 2018

Government response to developer contributions consultation

Government has published its response to the consultation on “Supporting Housing Delivery Through Developer Contributions”.
The main proposals are:

  • Removing all restrictions on s106 pooling towards a single piece of infrastructure; and

  • Removing restrictions on the use of s106 to fund items on the Council’s regulation 123 list.

This is a welcome reform because the restrictions have proved to be a bar to making contributions to projects which are recognised by all parties to be valuable.  Reliance will be placed on more transparent reporting of the use of developer contributions to avoid double dipping (i.e. charging developers twice for the same infrastructure).

CIL is to be retained, but it will be reformed by:

  • Simplifying the process of setting a higher zonal CIL in areas with high land value uplift; and

  • Modifying the currently severe penalties for failure to submit a Commencement Notice on time.

The government also proposes to introduce a Strategic Infrastructure Levy for combined authorities and joint planning committees with strategic planning powers.  This is to support large scale infrastructure which benefits multiple authorities. 

These proposed reforms follow the revised guidance on the NPPF (2018) relating to viability assessment, which encourages early viability assessment and robust local plan policies setting out the requirement for developer contributions.

The thinking behind this is to reduce the opportunity for developers to use late viability arguments to reduce contributions.  There is also the thought that robust clear s106 contribution requirements in Local Plans (and appropriate levels of CIL) will depress development land values and capture a fairer share of the benefit of uplift in land value for the public, through infrastructure provision.

  • The process of consultation on the setting of CIL levies is to be streamlined.  A second round of consultation will not always be necessary; and

  • There will be further consultation on the indexation of levy rates.
For more information on this update please contact Deborah Sharples on 01223 532757 or click here to email Deborah.
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