Clare Mirfin examines potential connections between recent planning consultations and current case law on the relationship between CIL payments and section 106 obligations
While planning practitioners await the government’s response to the recent consultation on developer contributions, recent case law demonstrates only too clearly that the relationship between the community infrastructure levy (CIL) and section 106 agreements is enduringly problematic. While the consultation seeks to simplify matters, things could get more complicated if the government implements emerging parallel proposals on biodiversity net gain and conservation covenants.
Consultation
The developer contribution consultation opened just before Christmas and closed on 31 January. Among the changes proposed were:
- a reduction in the formal consultation requirements for a local authority seeking to introduce a CIL charging schedule;
- the removal of the current restrictions in regulation 123 on pooled section 106 contributions;
- simplified indexation provisions;
- a new requirement for local authorities to publish an annual infrastructure funding statement; and
- confirmation that section 106 agreements can be used to secure monitoring fees – specifically including “legislative requirements on reporting”.
If these proposals are adopted, the removal of the pooling restriction and some of the other simplifications are likely to be welcomed by developers and local authorities alike. Other questions will remain: will the benefits of reducing consultation requirements be outweighed by the detailed requirements of the new annual infrastructure funding statement? Is it fair to ask applicants to pay for this, as the current proposals seem to suggest? And in practical terms, how long will it be before any changes are introduced? The parliamentary schedule is already packed with draft Brexit-related legislation and the new regulations will struggle to secure the time necessary for their adoption.
Considerations
Meanwhile, there is uncertainty for all owing to recent cases on the interrelationship between regulation 122 and section 106, which have introduced an interesting issue of how obligations that are non-CIL-compliant but still material in planning terms should be dealt with.
Regulation 122 introduced a new statutory basis for assessing the validity of obligations, including a rule that an obligation could only “constitute a reason for granting planning permission” if it was… “necessary to make the development acceptable in planning terms”. Initially, and perhaps because the test replicated language that was familiar from its policy context, the planning system was slow to recognise the significance of the change. In R (on the application of Welcome Break Group Ltd) v Stroud District Council [2012] EWHC 140 (Admin), Bean J commented: “There is nothing novel in regulation 122”, while in R (on the application of Hampton Bishop Parish Council) v Herefordshire Council [2013] EWHC 3947 (Admin) Hickinbottom J advised that: “Planning decision-makers can take into account off-site benefits of a proposed development provided that such benefits are related to or connected with that development in a real (as opposed to fanciful or remote) way.”
However, in R (on the application of Working Title Films Ltd) v Westminster City Council [2016] EWHC 1855 (Admin) Gilbart J noted that “the question of what is ‘necessary’ is now a test in law, which it was not beforehand”. The subsequent Court of Appeal decision in R (on the application of Wright) v Forest of Dean District Council Resilient Energy Serverndale Ltd [2017] EWCA Civ 2102 distinguished between the “statutory” requirement for necessity in the regulations and its status as a policy criterion in the NPPF, and this was supported by Lang J in Good Energy Generation Ltd v Secretary of State for Communities and Local Government [2018] EWHC 1270 (Admin); [2018] PLSCS 101 shortly afterwards.
A question arose: if an obligation was not strictly necessary in regulation 122 terms and so could not be a reason to grant permission, was it still a material consideration?
Lang J grappled with this issue in Amstel Group Corporation v Secretary of State for Communities and Local Government [2018] EWHC 633 and ruled that an inspector was correct to consider that an obligation to build a school was not necessary but that he was wrong not to give separate consideration to the general planning benefits of the new school – it should have still been considered as a positive in the planning balance. HJ Banks & Co Ltd v Secretary of State for Housing, Communities and Local Government [2018] EWHC 3141 (Admin); [2018] PLSCS 210 considered whether an inspector was correct to divide the offered obligations into those which were regulation 122 compliant and those which were not but could still be given moderate weight in making the decision. Ouseley J confirmed that it was not an error of law to apply “differing treatments” in such a situation.
It will be interesting to note future case law developments in this area.
Net gain?
The Defra consultation on biodiversity net gain ended recently, and another has just begun on conservation covenants and their potential to deliver planning benefits. This revives Law Commission proposals from 2014 and proposes a parallel method of delivering planning restrictions. If both sets of proposals are adopted, there will be a mandatory requirement for the delivery of biodiversity net gain that can be secured through “predictable conditions, obligations or a tariff payment” – or a conservation covenant.
While no one is suggesting the end of CIL contributions or section 106 agreements, we may be entering an era of increasing diversification when it comes to mitigating planning harm and delivering planning benefits. We advise both applicants and decision-makers to keep a close eye on changes – and categorise planning benefits with care in the meantime.
Main image © Paul Gillis/Rex/Shutterstock
Clare Mirfin is a senior associate in the planning team at Pinsent Masons
