APPENDIX 5: PLANNING BILL — GOVERNMENT
AMENDMENTS
Memorandum by the Department for Communities and
Local Government
1. This memorandum sets out the response of the
Department for Communities and Local Government to the Delegated
Powers and Regulatory Reform Committee's second report on the
Planning Bill (13th Report of Session 2007-08 - "the
13th Report"). It is supplementary to the Department's
memoranda to the Committee on the Bill of June and October 2008.
It also explains amendments to the Planning Bill which have been
tabled by the Government for consideration at Lords Report and
which either create new delegated powers or alter existing ones.
Community infrastructure levy - Part 11
Clause 202: Liability (and connected provision)
2. The Committee in its 13th Report
(paragraph 3) was of the view that Government amendments tabled
for Lords Committee (to Part 11 of the Planning Bill) went a significant
way to meeting the Committee's concerns expressed in their 12th
report about the enabling nature of the CIL provisions. Those
amendments were carried and, therefore, now form part of the Bill.
3. The Committee's 13th report went
on to note that the Government had not tabled an amendment to
be clearer about who will be liable to pay CIL - and reported
that "the House may consider the tabling of Government amendments
clarifying who is liable to pay CIL (or at least to set out a
default position which may be departed from in specified circumstances)
to be an important factor in considering the overall acceptability
of Part 11 of the Bill."
4. Amendments 135A and 136A seek to satisfy to
the Committee's concern about who is liable to pay. They reproduce
some of the pre-existing content of clause 202 (such as in new
subsections (5) to (8) of the new clause 202 and in subsections
(1) to (3) and (5) and (6) in amendment 136A). The Department
refers the Committee to its last two memorandums by way of an
explanation of the provisions here.
5. More importantly in the current context, amendment
135A (subsection (1)) now means that the decision is no longer
to be left to CIL regulations about whether CIL liability may
be assumed by someone. There will be an opportunity to assume
liability for CIL before the commencement of development (see
subsection (2)(a)). In most cases, the Department expects that
the parties involved in a development will appoint someone to
accept liability for the development before the commencement of
development (see subsection (2)(a)) and to pay within a specified
time thereafter. Subsection (2)(b) does however allow for liability
to be assumed in accordance with CIL regulations after the commencement
of development - for example, if a charging authority is threatening
to take enforcement action such as the service of a stop notice
requiring a development to cease, the assumption of liability
would provide the opportunity to avert such a risk. It seems sensible
to allow for this.
6. Where liability is not assumed before development
is commenced, the amendment provides that the CIL regulations
must provide for an owner or developer of land to be liable for
CIL. Subsection (7) of amendment 136A defines "owner"
as a person who owns an interest in the land and "developer"
as a person who is wholly or partly responsible for carrying out
a development. Therefore, the Bill no longer contains a power
at large to define the meaning of these words (see clause 202
(6)(a) and (b)). Subsection (7) of amendment 136A does, however,
provide a power to provide for a person to be treated or not to
be treated as an "owner" or "developer". The
intention here is to allow for CIL regulations to be able to provide
at a detailed level that certain types of interests are to be
included or excluded. For example, to stipulate that easements,
profits a prendre, and the benefit of a restrictive covenant are
not material interests for CIL purposes (even though they are
interests in land) or that in the case of land with a 999 year
lease, the remaining freeholder is not liable but the leaseholder
is. There is considerable complexity in ensuring that the liability
can be fairly and proportionately enforced, both in situations
where a volunteer subsequently defaults and to secure payment
if the development were to take place without any such person
coming forward. Accordingly, the Department considers that the
level of delegation proposed is appropriate.
7. Finally, in relation to amendment 136A, subsection
(4) relates to how "development" has been defined in
subsection (1) of that amendment and the operation of subsection
(3) there. The obligation in subsection (3) may be interpreted
as requiring any definition of commencement of development to
relate only to development of the sort defined by subsection (1)
- something done specifically in relation to a building (or structure).
Many developments for which planning permission is granted may
consist of different types of development - in particular, engineering
or other operations or material changes of use that have no connection
to a building. Subsection (3) is intended to allow for the commencement
of development to be defined by reference to such other works
which may be authorised by a planning permission that also authorises
the building works for which there is CIL liability. The subsection
is intended to provide for simplicity, to avoid argument in complex
situations about whether a particular act constituting commencement
of development authorised by a planning permission relates, or
does not relate, to the part of the development which is CIL liable.
8. Amendment 140A is connected to what would
become new clause 202(5)(d). It allows for CIL regulations to
make provision of the sort in clause 207(3) (about when rights
of appeal must be exercised, the procedure on appeals and the
payment of fees and the award of costs) where the way in which
CIL is to be apportioned needs determining.
9. Amendment 144A is principally connected to
the new provisions about assumption of liability. The intention
is to ensure that in as many cases as possible liability is assumed
before the commencement of development and therefore, as a matter
of fact, default liability of an owner or developer is rare. The
amendment is designed to ensure that mechanisms are available
under clause 210 to encourage this sort of behaviour - for example,
to provide that a surcharge or interest is payable in the event
that no one assumes liability or to allow charging authorities
to serve notice requiring a development to stop where no one has
assumed liability.
10. Amendment 146A
is also connected with the new provisions in clause 202 relating
to liability. It is intended to provide the necessary powers to
impose procedural requirements on how liability may, for example,
be assumed or transferred - such as the form and contents of any
notice which must be served on a charging authority or another
party and the form which service of such a notice may or must
take.
New Clause - Charities
11. Amendment 136AA provides a new clause to
replace the duties relating to exemptions to or reductions in
CIL for charities in clause 202(8). The first subsection provides
a new duty that CIL regulations must provide for an exemption
from liability to pay CIL to certain classes of charity (as defined
in subsection (4)). This is where the building or structure in
respect of which CIL liability arises is to be wholly or mainly
used for a charitable purpose of the charity concerned. Subsection
(2) expressly provides two powers (which the Department believes
the powers in clause 214(1)(c) already contain as explained in
its previous memorandum). First, a power in CIL regulations to
provide an exemption or reduction in CIL to other institutions
established for charitable purposes (which do not fall within
subsection (4)). Secondly, a power to require charging authorities
to make arrangements for an exemption or reduction to CIL to institutions
established for charitable purposes.
Clause 203 - Amount
12. Amendment 136B would substitute the duty
in clause 203(2)(b) which relates to actual or expected increase
in value arising from planning permission. The duty now would
be for charging authorities in formulating their charging schedules
to have regard (to the extent and in the manner specified by CIL
regulations) to matters relating to the economic viability of
development. Such matters might include the actual or potential
economic effects of planning permission or of the imposition of
CIL. For example, in the latter case, in the case of Greater London,
this would cover a requirement for the Mayor to take account of
any CIL imposed by London borough councils and vice versa.
13. This amendment (and the related amendment
129A to clause 199) respond to concerns expressed in the House
and by the development industry to the effect that the Bill as
it stands does not take a sufficiently general view as to the
factors affecting the viability of development.
Clauses 204 and 205 - Charging Schedule: examination
and approval
14. Amendments 137A and 138A provide that CIL
regulations may make provision for examiners to reconsider their
decisions with a view to correcting errors and may make provision
for the correction of errors in a charging schedule after approval.
15. The Committee will be aware that the Bill
now contains provisions (clauses 203(9), 204 and 205) that mean
that before a charging schedule can be approved, or a revision
to a charging schedule approved, an independent examination of
the schedule or revision must be carried out and that the recommendations
of that examination are binding on the charging authority (if
it wishes to approve the schedule). Therefore, for example, if
an error were spotted in how a charging authority had transposed
the requirements of an independent examiner, a revision to correct
that error would need to be subject to independent examination.
Or if an independent inspector had made his recommendations but
made a mistake in the detail of his recommendations as to how
a draft charging schedule had to be amended, the charging authority
because of the duty in clause 205(1) would only be able to approve
a charging schedule with that mistake.
16. Amendments 137A and 138A are intended to
address the inflexibility of the duties to hold an independent
examination in the case of every revision to a charging schedule
and that a charging authority may only approve a charging schedule
if it follows all the examiner's recommendations.. They ensure
that errors, for example, in transposing an examiner's recommendations
into a charging schedule (which may well occur) can be rectified
without the need to appoint someone to carry out another independent
examination.
Clause 208 - Application
17. Amendment 143A, whilst it is made to clause
209, relates to the powers in clause 208(7)(a) and (c). It is
intended to ensure that the powers in those two provisions apply
in relation to a public authority which collects CIL. In particular,
the amendment gives regulation-making powers to require collecting
authorities to account separately for CIL which been received
or which is due (and how they should make such accounts) and about
requiring collecting authorities to report about the collection
of CIL.
18. The intention behind the amendment is to
correct a lacuna. The powers in clause 208(7)(a) and (c) do not
currently apply to collecting authorities. Charging authorities
may collect CIL and if they have accounting and reporting requirements
imposed on them because they collect CIL, it may be also thought
appropriate to impose equivalent requirements on a collecting
authority.
Clause 210 - Enforcement
19. Amendments 144C and 144D are two of the
Government amendments to clause 210 (the other two having been
explained above). Amendment 144C would in effect mean that the
powers to make provision about the enforcement of CIL extend to
cases of the death and insolvency of the liable party. Such circumstance
may well arise and therefore ought to be catered for.
20. Provision is made, for example, in paragraph
10 of Schedule 4 to the Business Improvement Districts (England)
Regulations 2004 for liability for the BID levy, in the case of
death, to become the responsibility of the dead person's executor
or administrator and for payment to be made out of assets and
effects of the dead person. Provision about liability on death
is also to be found in regulation 11 of the Non- Domestic Rating
(Collection and Enforcement) (Local Lists) Regulations 1989 and
regulation 58 of the Council Tax Administration and Enforcement
Regulations 1992.
21. Provision is also made in these aforementioned
regulations in connection with the insolvency of the liable person.
22. Amendment 144D is intended to replace the
power in clause 210(3)(c) relating to the registration of local
land charges and in doing so clarify the extend of the powers
in relation to such charges.
23. There are two strands to the new subsection
(3A) which amendment 144D would insert. First, as members of the
Committee will be aware, local land charges registers are, amongst
other things, a source of information about potential or contingent
liabilities in relation to land (for example, see the general
charge which may be registered under section 6(2) of the Local
Land Charges Act 1975 and section 106(11) of the Town and Country
Planning Act 1990 which relates to planning obligations). In addition,
the register of planning applications which is maintained by local
planning authorities under article 25 of the Town and Country
Planning (General development Procedure) Order 1995 is also a
register which is open to the public, providing details in connection
with planning applications and permission. New subsection (3A)(b),
(d) and (e) are in part concerned with providing powers in CIL
regulations for information about potential/contingent liability
for CIL to be recorded in a local land charges register or the
register maintained under article 25 of the 1995 Order (and to
ensure that it is removed where it becomes out of date).
24. Secondly, as members of the Committee will
also be aware, local land charges are a device for charging liability
to land and ensuring that successive owners are liable for that
charge (see, for example, sections 1(1)(a) and 7 of the Local
Land Charges Act 1975 or section 106(3) and (11) of the Town and
Country Planning Act 1990). Compensation is payable in the event
of failure to register a local land charge under section 10 of
the 1975 Act. New subsection (3A)(c) makes express provision allowing
for enforcement of liability for CIL which has been become a local
land charge against successive owners and by way of sale or other
disposition (but only with the consent of a court, which is narrower
than section 7 of the 1975 Act).
25. The Department considers that the powers
under clause 210 already allow for these remedies to be provided
for in CIL regulations. However, it also considers it is appropriate
to spell them out on the face of the Bill and in particular expressly
limit the circumstances in which a local land charge can be enforced
by way of sale or other disposition to only where a court consents
to such a sale or disposition.
26. New subsection (3A)(a), (b) and (e) allow
for regulations to provide for the creation, registration and
the cancellation of the registration of this latter type of local
land charge.
Clause 211 - Compensation
27. Amendments 145A to 145C are intended to deal
with an omission in clause 211. The clause as it stands is premised
on the assumption that only a charging authority might take enforcement
action. That is wrong because clause 209(5) contemplates other
public authorities being permitted or required to collect CIL
(for example, local planning authorities in Greater London in
relation to CIL charged by the Mayor of London) and collection
and enforcement are intrinsically linked. As we explained in our
last memorandum, the intention here is to provide a safeguard
against inappropriate enforcement by providing for compensation
where this occurs.
28. The amendments correct the omission and therefore,
extend the powers in clause 211 to situations where someone other
than a charging authority takes enforcement action. In this connection
subsection (5) is amended so that CIL regulations can require
a charging authority to use CIL revenues to pay for compensation
incurred by another authority under this clause.
Clause 212 - Community Infrastructure Levy: procedure
29. Amendment 146B would insert a new subsection
(2A) into clause 212 which generally deals with procedural matters
connected with CIL. The new subsection specifically relates to
procedures to be followed in connection with exemptions or reductions
of CIL. Central Government may need to monitor the use (and possible
abuse) of exemptions granted from CIL, for example in pursuit
of an anti-avoidance strategy.
30. Amendment 146C would provide that a power
to make provision about the publication of a thing includes a
power to make provision about making it available. Amendment 142C
would remove an analogous but narrower provision in clause 208(8)
(which relates to the power in clause 205(5)(a) to require charging
authorities to publish lists of the projects to be funded by CIL).
Amendment 146C is intended to preserve the effect of clause 208(8)
and to ensure that the power under clause 206(2) to make provision
about the publication of a charging schedule includes the power
to make provision about it being made available. The intention
here is to be able to require charging authorities to keep copies
of important CIL related documents available for inspection to
members of the public, for example, during office hours and at
their principal offices.
Clause 214 - CIL regulations: general
31. The power in clause 214(1)(c) for CIL regulations
to make provision for exceptions is extended by amendment 148A
so that exceptions can also be provided for in a charging schedule.
An example of how this power might be used would be to provide
for exceptional cases where the development would be unviable
unless a nil or reduced CIL were payable. It may be desirable
for such exceptions to be set by individual charging authorities
as well as (or instead of) nationally by the Secretary of State
and this amendment would provide that flexibility. As well as
Parliamentary scrutiny of CIL regulations, the use of the power
would be constrained by any express provision to that effect in
CIL regulations and by the need for the charging schedule to be
approved by an independent examiner.
32. The power in clause 214(1)(d) for CIL regulations
to confer a discretionary power is extended by amendment 148B
so that a charging schedule can also confer a discretionary power.
The purpose of this amendment is to ensure that where exceptions
are provided for in a charging schedule, the charging schedule
can also provide that the issue of whether the proposed development
falls within the scope of the exception may be determined by an
independent third party. The power would be constrained in the
same way as amendment 148A.
Clause 217 - Community Infrastructure Levy: Repeals
33. Amendment 153A provides a new order-making
power for the Treasury to repeal by order the Planning-gain Supplement
(Preparations) Act 2007. This Act is a 3 section Act. It enables
the Commissioners for Her Majesty's Revenue and Customs, the Secretary
of State and a Northern Ireland Department to incur preliminary
expenditure for the purposes of facilitating the introduction
of and designing business processes for a Planning-gain Supplement.
34. By virtue of amendment 149A, an order using
this power would have to be made by statutory instrument and would
be subject to the negative resolution of the House of Commons
only (since the repeal of the Act is a financial matter). Amendment
149A also deals with the procedure for making an order under clause
210(10). This remains the same - i.e. negative resolution of both
Houses (as it would have been under clause 224(4)). In the case
of both order-making powers, new subsection (3)(b) would prevent
an order using the powers in clause 214(1)(f) to amend an Act
of Parliament.
Clause 233 - Commencement
35. Amendment 161A amends clause 233 so that
the powers to commence provisions in the Bill by order extend
to new subsection (6A) of section 203 (which would be inserted
by amendment 136B). This new subsection would provide express
powers to charging authorities to take steps in the preparation
of a charging schedule.
Parliamentary Procedure
36. The Committee in its 13th Report
again drew to the attention of the House of Lords the fact that
regulations under Part 11 are subject to the affirmative procedure
in the House of Commons only (see paragraph 5 of the 13th
report).
37. The Department indicated to the Committee
its memorandum of June 2008 (and in an earlier one in November
2007) that it considered this procedure is appropriate since the
making of the regulations will result in the imposition of a charge
(paragraphs 143 and 185 of the June 2008 memorandum and November
2007 memorandum, respectively). The Department has carefully considered
the matter and has not changed that view.
Department for Communities and Local Government
November 2008
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