Draft Community Infrastructure Levy (Amendment) Regulations 2011

The Committee consisted of the following Members:

Chair: Mr Andrew Turner 

† Baldwin, Harriett (West Worcestershire) (Con) 

† Campbell, Mr Ronnie (Blyth Valley) (Lab) 

† Cunningham, Mr Jim (Coventry South) (Lab) 

† Dromey, Jack (Birmingham, Erdington) (Lab) 

† Hemming, John (Birmingham, Yardley) (LD) 

† Hollingbery, George (Meon Valley) (Con) 

† Howell, John (Henley) (Con) 

Jackson, Glenda (Hampstead and Kilburn) (Lab) 

† Lee, Dr Phillip (Bracknell) (Con) 

† Murray, Sheryll (South East Cornwall) (Con) 

† Neill, Robert (Parliamentary Under-Secretary of State for Communities and Local Government)  

† Rotheram, Steve (Liverpool, Walton) (Lab) 

† Rudd, Amber (Hastings and Rye) (Con) 

Sheerman, Mr Barry (Huddersfield) (Lab/Co-op) 

Simpson, David (Upper Bann) (DUP) 

† Smith, Angela (Penistone and Stocksbridge) (Lab) 

† Wiggin, Bill (North Herefordshire) (Con) 

† Wright, Simon (Norwich South) (LD) 

Anne-Marie Griffiths; Lydia Menzies, Committee Clerk s

† attended the Committee

Fourth Delegated Legislation Committee 

Tuesday 15 March 2011  

[Mr Andrew Turner in the Chair] 

Draft Community Infrastructure Levy (Amendment) Regulations 2011 

4.30 pm 

The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill):  I beg to move, 

That the Committee has considered the draft Community Infrastructure Levy (Amendment) Regulations 2011. 

It is a pleasure to serve under your chairmanship, Mr Turner, in this distinguished Committee Room to consider this important but technical delegated legislation. I will be as brief as possible in introducing the proposal before answering any questions hon. Members may have. 

As I am sure Committee members know, the community infrastructure levy––often called the CIL for brevity and perhaps out of affection––allows local authorities to choose to charge a levy on new development in their area in order to raise funds to meet the resultant infrastructure needs and enable growth. The levy will support growth by providing infrastructure and can be applied to, for example, roads, schools, hospitals and parks. 

The CIL was introduced by the previous Government through the Planning Act 2008, part 11 of which provides for regulations to allow the imposition of the levy. The Community Infrastructure Levy Regulations 2010 made the first use of those powers, bringing the levy into effect from 6 April 2010, so it was introduced fairly recently. The instrument before the Committee amends those regulations. 

The purpose of the amendments is to increase local flexibility on the collection of payments, to ensure the effective administration of the levy, to reduce administrative burdens and to make other minor amendments to clarify the operation of the existing regulations in light of our brief experience so far. 

It is fair to say that there is a broader context to the reforms to the CIL that does not entirely fall subject to this instrument, so I will not go into too much detail, but it is part of a package of reforms. In a nutshell, the levy was introduced by the previous Government and the regulations came in shortly before the general election. They allowed councils to begin the process of considering and setting a charge within their areas. Many councils are in the process of implementing a charge, with the first expected to have their charging schedules in place later this year. 

In advance of the general election, the Conservative party announced its intention to retain the CIL as part of its broader package of planning reforms but to reform it to ensure that it both supports and incentivises local development and growth because we believe that

we can give more control to local councils over the use of those funds and ensure that more of the money directly benefits the neighbourhoods where new developments are built. That is consistent with the general thrust of our planning reforms and with the planning policy reforms that were incorporated in the coalition agreement, much of which will be carried out through the Localism Bill and its attendant secondary legislation, which will probably keep many of us occupied for a goodly time. 

The amendments are confined to taking forward those aspects of the reform package that can be made under the existing 2008 Act powers. They are not the whole package but the bits that existing provision can deal with in advance of the passage of the Localism Bill. They do not touch on several issues on which further regulation will be made. Unless I am tempted to in the course of the debate, I will not go into the detail of those parts. That is the broader context, but here we are dealing with some specifics. 

First, the amended regulations give local authorities the power to decide what payment provisions are right for their areas. That will enable authorities to better reflect local circumstances and, in particular, it offers the option to pay by instalments. That could support development by allowing for charges to be better aligned with developers’ cash flows and therefore help development come forward. It is a practical change in the light of experience, not a matter of any deep philosophy. It seems sensible to help bring about the intentions of the regulations. 

Secondly, the regulations reduce administrative burdens for both local authorities and developers and will therefore make the administration of the levy more effective. The amendments achieve that by removing the requirement to notify local authorities about development that will not give rise to a charge. They remove prescriptive and needlessly onerous requirements to notify all residents in the local authority when a change is being made to a draft charging schedule. I am not criticising those who drafted the regulation. At the time, it was a new thing and there was a natural tendency to seek to be all encompassing. In light of feedback and experience so far, we think we can reduce some of the details required. The amendments will allow local authorities to collect charges that are due but where a developer has failed to fulfil their duty to notify. They are technical amendments to smooth things along and make them more proportional. 

Thirdly, the regulations allow local authorities to suspend liability to pay a charge where planning permission is granted in respect of the land but the owner is not party to the development and does not consent to the development progressing. As we all know, it is perfectly possible and legally permissible for someone who is not the owner of the land to apply for and obtain planning permission. Sometimes there are good reasons for that. The provision in relation to the CIL regulations is necessary because planning permission can be granted for land where one or more of the owners have not given their consent for the development to proceed. As things stand, the regulations mean that if a developer did not pay the CIL due, such a landowner could be liable to a charge, despite having no interest or involvement in the development that gave rise to it. These things tend

to be resolved over time by negotiation and at a price, but as the regulations stand, there is a gap where a liability could fall on a landowner who had done nothing to bring it upon himself. 

Fourthly, the amended regulations clarify that development to the interior of an existing building is not liable to a charge. 

Finally, there are a number of important technical clarifications to ensure the effective operation of the regulations. First, the amendments allow levy appeal bodies to extend the period in which to accept representations from appellants. That will give local appeal bodies more flexibility when processing appeals against the levy. 

Secondly, the amendments clarify the process of apportioning the levy among several landowners. One can easily conceive of developments that cross several land holdings. The amended regulations stress that the levy due for a development must be apportioned as if the development had been completed. That clarification gives more certainty to the collecting authorities, levy appeal bodies and the payers, so everyone will know where they stand. 

Finally, the amendments make important clarifications to the operation of planning obligations alongside the levy. The first relates to the limitations placed on local planning authorities by existing regulation 123, which prevents local planning authorities from using more than five planning obligations to support the same piece of infrastructure. The amendments clarify that that limit applies from 6 April 2010. That cut-off point reduces the administrative burden on local authorities, which would otherwise have had to go back through the planning obligations granted since 1990 to ensure compliance. We are effectively saying that the limit of five applies only from when the CIL came into force, and that people do not need to go back to obligations under the previous regime. 

Finally—there are many “finallys”, but there is much to cover—the amendments ensure that the limitations on the use of planning obligations in existing regulations 122 and 123 also apply to planning permission under section 73 of the Town and Country Planning Act 1990. Planning permission granted under section 73 allows for the variation or removal of planning conditions attached to existing permissions. The amendment is important to give clarity and consistency to local planning authorities and developers by treating the new permission in the same way as any other. 

In a nutshell, those are the key elements of the amendments in the regulations. We believe that they are sensible and pragmatic and that they will reduce burdens. They are consistent with our overall approach and will improve the operation of the levy. As I said, they are not the whole picture, but they are a necessary part, and they can be done now under the existing statutory provision without waiting for the new changes in the Localism Bill to come into force. 

Against that background, I hope that the Committee approves the draft regulations. 

4.41 pm 

Jack Dromey (Birmingham, Erdington) (Lab):  It is a pleasure to serve under your chairmanship, Mr Turner. 

We welcome the Government’s decision to retain the community infrastructure levy, which the previous Government introduced last year. The purpose of the CIL is to ensure that the costs incurred in providing infrastructure to support an area’s development can be funded by the owners of the land, not least because the value of that land normally significantly increases due to permission for development. 

The levy will have the effect of increasing investment in the vital infrastructure that communities need. Properly exercised, it has the potential to raise hundreds of millions of pounds, which can be spent on a wide range of community infrastructure, such as major transport improvements, schools, parks and health centres. For that reason, we support the regulations and warmly welcome the Government’s Damascene conversion to the CIL, when at least one party in government was determined to abolish it. The Government now see the good sense, virtue and value of retaining the CIL. 

The Under-Secretary was right that the amendments should also be seen in a wider context of changes to the CIL which require legislation and are contained in the Localism Bill. I seek a specific assurance about that. In the Localism Public Bill Committee, Ministers gave several welcome assurances, including on our views about the wider changes to the levy, and what should be taken into account, particularly, as the Under-Secretary will remember, our representations on affordable housing and the levy’s role in that process. Ministers gave a commitment that we would be involved in next-stage discussions. Indeed, several next-stage discussions are planned on aspects of the Localism Bill that affect planning. We would welcome an assurance that those discussions will take place as quickly as possible. 

My final point—one “finally”—is that we support the amendments to the regulations because they draw on the previous Government’s wisdom and introduce some welcome changes. They are a step in the right direction. We therefore wish the regulations good speed, but, crucially, we need to hold those next-stage discussions. 

4.45 pm 

Robert Neill:  I am grateful to the hon. Member for Birmingham, Erdington (Jack Dromey) for his words and the sentiment with which they were expressed. I am not sure whether there has been a Damascene conversion— I think that it is Macmillanite pragmatism, to use a phrase that he has employed in the past. My party was committed in its Open Source Planning Green Paper to pay a localised tariff and we concluded that, as practical measure, the CIL, despite our concerns about its initial form, had been changed by the previous Government through several amendments to the originally proposed regulations, and was capable of being adapted to fulfil the function of that tariff. That is the reason for our approach. 

I reassure the hon. Gentleman that the undertakings for future discussions that the Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) and I gave remain. We will be happy to take them forward. 

I commend the regulations to the Committee. 

Question put and agreed to.  

4.46 pm 

Committee rose.