A total of 30 organisations have jointly written to the Michael Gove, secretary of state at the Department of Levelling Up, Housing & Communities urging him to scrap his plans for a new infrastructure levy, calling on him instead to reform the current developer contributions system.
Signatories include the Construction Leadership Council, Build UK, the Construction Industry Council, the Royal Town Planning Institute and the Local Government Association.
Their letter warns that the levy could make it “harder, not easier, for local leaders and communities to secure the benefits of new development” – resulting in councils and housing providers delivering fewer homes for affordable and social rent, while less critical infrastructure could be built in tandem with development, meaning fewer new roads, health centres and schools.
The government reckons that the new system will help bring about more affordable housing but the signatories argue that it is unclear how the proposed levy’s rates and thresholds will protect the delivery of affordable homes, warning that “we cannot support reforms that are likely to leave communities with fewer new social and affordable homes, mixed and balanced developments and less of the infrastructure they need”.
The government intends to replace the current developer contributions system, which includes S106 and the community infrastructure levy (CIL), with a new infrastructure levy. Payments under Section 106 of the Town & Country Planning Act 1990 finance affordable housing and on-site infrastructure whereas CIL funds large-scale infrastructure. The current system currently raises around £7bn per year.
With the levy amalgamating and financing both housing and infrastructure, the letter warns that the reforms could raise less money for affordable and social rent homes, while there would be less of a legal obligation for this tenure of housing to be included by developers. Last year, Section 106 was responsible for delivering 47% of all affordable homes built.
Councils are concerned that the levy could squeeze the amount of money made available for infrastructure to go alongside development to ease the pressure on existing services and communities.
The signatories warn that while the proposed new model may work on greenfield sites it would make many brownfield sites unviable, perpetuating regional inequalities and creating another barrier to delivery.
The letter also warns that the time it would take to roll out the new system would create prolonged uncertainty across the planning system. It instead calls on the government to work with the sector to improve the current system of S106 and CIL payments.
The signatories to the letter are:
- Melanie Leech, Chief Executive, British Property Federation
- James Francis, Chair, BuildEast
- Suzannah Nichol MBE, Chief Executive, Build UK
- Muniya Barua, Deputy Chief Executive, BusinessLDN
- Eddie Tuttle, Director of Policy, External Affairs and Research, Chartered Institute of Building
- Gavin Smart, Chief Executive Officer, Chartered Institute of Housing
- Graham Watts, Chief Executive, Construction Industry Council
- Mark Reynolds, Co-Chair of the Construction Leadership Council
- Sarah Hendry, Director General, Country Land and Business Association
- Cllr Roger Gough, Housing and Planning Spokesperson for the County Councils Network
- Cllr Sam Chapman-Allen, Chairman of the District Councils’ Network
- Cllr Matthew Hicks, Chair, East of England Local Government Association (EELGA)
- Brian Berry, Chief Executive, Federation of Master Builders
- Fiona Fletcher-Smith, Chair, G15
- Karen Cooper, Chair, G320
- Stewart Baseley, Executive Chairman, Home Builders Federation
- Louise Swain, Chair, Homes for South West
- Steve Coffey, Chair, Homes for the North
- Shelagh Grant, Chief Executive, The Housing Forum
- Paul Brocklehurst, Chairman, The Land Promoters and Developers Federation
- Cllr Darren Rodwell, Executive Member for Regeneration, Housing and Planning, London Councils
- Cllr Linda Taylor, Chair of Environment, Economy, Housing and Transport Board, Local Government Association
- Jules Pipe, Deputy Mayor, Planning, Regeneration and Skills on behalf of the Mayor of London
- Richard Beresford, Chief Executive, National Federation of Builders
- Kate Henderson, Chief Executive, National Housing Federation
- Mike Kiely, Chair, Planning Officers Society
- Victoria Hills, Chief Executive, Royal Town Planning Institute
- Polly Neate CBE, Chief Executive, Shelter
- Ursula Bennion, Chief Executive, Trent & Dove Housing Ltd
- Fiona Howie, Chief Executive, Town and Country Planning Association
Got a story? Email news@theconstructionindex.co.uk
