Highway to CIL

Money iStock 000008683901XSmall 146x219Government proposals to reform further the Community Infrastructure Levy have a focus on highway works. Matt Gilks analyses the measures.

In April 2013, the Government released a consultation on further reforms to the planning system’s Community Infrastructure Levy (CIL) with further proposed amendments to the troubled Community Infrastructure Levy Regulations 2010 (the CIL Regulations).

There are many changes proposed in the consultation, including:

  • Clarifying the role of the list of infrastructure and procedures for reviewing it;
  • Allowing charging authorities the choice to accept payments in kind through provision of both land and infrastructure either on-site or off-site for the whole or part of the levy payable on a development;
  • Making it easier to apply exceptional circumstances relief provisions.

A spotlight on highway works

The Government also announced that it is considering the relationship between the CIL Regulations and section 278 agreements. More detail about what is envisaged would be helpful. Section 278 agreements under the Highways Act 1980 are legally binding agreements between the local highway authority and the developer. They are designed to ensure the delivery of necessary highway works.

The Government points out that as drafted, CIL Regulation 123 limits the use of section 106 planning obligations under the Town and Country Planning Act 1990. But those prohibitions do not apply to a section 278 agreement as they do to a planning obligation. It should be recalled that in many situations a different tier of government is responsible for the delivery of the highway infrastructure. So a district local planning authority does not have control over the timing of the highway upgrades by the county local highway authority, or the Highways Agency.

As currently drafted, the CIL Regulations don’t deal with section 278 agreements at all. This is perceived as problematic because they are not ‘visible or regulated’. The Government asks if: "section 278 agreements ought to be required for projects which are included on the list of infrastructure and intended to be funded through the levy, and whether this could result in unreasonable requirements on developers".

The point here seems to be that if the developer is required to pay a CIL charge to the local planning authority for highway infrastructure, there is a real risk of an element of double dipping if a payment under a section 278 agreement to the local highway authority is also required.

It is imperative that the Government bear in mind the practicalities of negotiating a section 278 and bringing forward a planning application. The negotiation of the detail and costs for works is sorted out well after the completion of the grant of the planning permission. At the planning permission stage there is likely to be some work still to do on the estimating the costs of the highway work.

Highway agreements are often of critical importance to a developer. In the City of London, Westminster and other high-end locations, the delivery of a quality street scene and public realm is a key aspect of presenting the best ‘shop front’ for a new development. Ensuring the precise layout of the highway improvements may be crucial to ensure secure, safe and satisfactory access for occupiers. In the capital, Transport for London may have a major influence on the timing and sign off of major works. The developer is assisted by a legal agreement made under section 278 of the Highways Act 1980 if it enables him to employ the local highway authority’s highway contractors directly to speed up the delivery of the development programme.

If the Government intends to curtail all or some legal agreements where there is a highway infrastructure need identified by local planning authority, developers will require more detail about the proposals in order to properly respond. Changes are likely to be unhelpful if they force a developer to part with the limited measure of control enjoyed by a section 278 agreement. It would be unfair if the proposed changes to CIL result in the loss of any mechanism for the developer to agree with the local highway authority about how and when and by whom the highway improvements are delivered.

The risks of getting it wrong are confusion, uncertainty and delay. Highway projects are costly and time consuming, and require expert consideration of the transport planning, engineering and legal issues. The Government’s well intentioned proposals must avoid a result where highway contractors or developers have to find their way out of a CIL cul-de-sac before they can make improvements to our highway infrastructure.

Matt Gilks is a planning, highways and public law solicitor at Dutton Gregory LLP Solicitors. Matt was formerly a Government lawyer responsible for the street works and highways aspects of the Traffic Management Act 2004 within the Department for Transport.