As Simple as CIL
The planning landscape has changed dramatically since our beginnings as a company in 1995. It was hard back then, now it’s even harder. With a chronic (endemic?) shortage of new build development in the capital and yearly targets that are never met, one would imagine that things would change. That the greater good of considered, new development which brings much needed regeneration and affordable housing would prevail? Well it hasn’t in the last few years - and doesn’t look like there is much chance of it changing any time soon.
Increased planning complexity has led to increased time and costs, which increases risk and impacts viability. It seems odd and is unsettling that I’ve watched my children grow up without a brick being laid on a site of ours in one London borough. And why? Well, as I said, it’s complex.
Which brings us neatly to the Community Infrastructure Levy (CIL): announced in 2007, legislated in 2008, planned to be scrapped in 2010, but then retained later in 2010, reformed in 2011 and now being introduced at various times across the capital. It set out to answer the criticisms of existing Section 106 agreements (S106) and in doing so simplify the planning process.
Except in our experience, the introduction of CIL has not made life simpler. Boroughs understandably work to their own timetables and are bringing their CILs forward at a variety of different paces and levels. However, this has created uncertainty and a situation whereby there isn’t a level playing field. This is particularly acute when evaluating neighbouring development opportunities that sit in different boroughs that are at different stages of introducing CIL or have different levies.
The idea of CIL is to make things more straight forward by setting the price within each borough so that developers can calculate payments in advance. Seems simple, but that assumes that Section 106 negotiations and payments will then be replaced. Err, no… CIL has not replaced S106 agreement negotiations and payments and has therefore become an additional burden, which further risks restricting supply (and we haven’t even mentioned Mayoral CIL yet…). This burden is made heavier by the fact that payment is loaded towards commencement and there no instalment policy has been entertained.
Regrettably, it’s yet another example of the added bureaucracy and red tape that the Government reports to be battling against. Given, there should be some basic clarity when the scheme has been been introduced across all boroughs, but because some items are excluded and still need to be negotiated on a case by case basis, it’s hard to see the speed of applications improving.
And in conclusion, it is particularly concerning that the Mayor of London has so far decided not to entertain the application of relief from CIL on unviable schemes, which will inevitably stop more marginal schemes – perhaps those in much needed fringe locations - from coming forward and which is in turn will regenerate London and make up the housing development shortfall.