CIL is now the preferred method of collecting bundled contributions for infrastructure financing. The S106 agreements have been reduced to implementation regulations and site-specific issues (whether or not the municipality has implemented a CIL) and have been subject to legal testing since 2014. THE ICLs cover general payments that require an evolution. Section 106 appropriations must be spent in accordance with the terms of the legal agreement. As a general rule, this is related to a specific objective and with the local territory to a certain development. Legal audits of the date of use of a s106 agreement are set out in Regulations 122 and 123 of the 2010 EU Infrastructure Tax Regulation, as amended. The advantage of the CIL is that the tariff is transparent and should not be negotiated. To ensure that developers do not pay for the same infrastructure under both systems, local authorities must publish a list of what is funded by the CIL, and these points cannot be covered by an S106 agreement. The use of planning obligations (section 106/S106 agreements – legally binding agreements under Section 106 of the Planning and City Act 1990) has been reduced since the implementation of the CIL.
However, new developments often have a direct impact on the environment, creating a need for additional infrastructure or improved municipal services/equipment. As a result, affordable housing and site-specific infrastructure, such as highway works, necessary to mitigate or enable the impact of construction, will continue to be secured by S106 agreements or specific planning conditions. They can also be used in cases where a development proposal results in the loss of an existing facility or location feature, and we require that the facility/function be replaced either directly by the developer or by a financial contribution defined in an S106 agreement. The IL seems to rely on RPs who buy affordable housing from the developer, as is currently the case. However, the removal of the use of s106 agreements can have an impact on RPs and their funders, and the ability of RPs to purchase units in general may affect them. In particular, there are industry formulations and a process that RPs, their funders, LPAs and developers can follow to assist RPs in the funding programs covered by the s106 agreement. In the absence of the s106 agreement, it can create evaluation problems for RPs, making it more difficult to obtain funding and ultimately provide affordable housing. Moreover, once affordable housing is made available, the proposals do not specify how this will be guaranteed in a sustainable way without the s106 agreement to bind the country.
The traditional methods used by PPS and PPPs to protect existing stocks appear to be mitigated in these proposals. Contributions to the S106 programme remain the main means of ensuring that development is cost-effective for the infrastructure it supports. However, S106 agreements are naturally uncertain as to what they can provide. Contributions S106 are negotiated between the municipality and the developer and can pay for everything from new schools or clinics to roads and affordable housing. Our legal services team will develop an S106 agreement to be signed by the Council and the developer/landowner. If an S106 agreement is deemed necessary when filing a planning request, you must confirm that you are satisfied with the writing of model S106 (available for download on this page). This is an example of how planning obligations can be adequately formulated.