Liberal Democrat peer Baroness Pinnock, a vice-president of the Local Government Association, tabled an amendment to the Levelling-up & Regeneration Bill, debated in the House of Lords this week, seeking to delete the clause introducing the infrastructure levy.
Her amendment was defeated by 221 votes to 185 this week.
Kath Pinnock, a Kirklees councillor for more than 35 years, told the Upper House: “The infrastructure levy (IL) as currently proposed is contrary to the purpose of the Bill, which is to enable the levelling up of areas that are defined in the White Paper. The IL fails to contribute to that levelling-up mission because the amount that it will be possible to set as an infrastructure levy rate will be dependent on land values. Land values are much lower in the very areas that are the focus in the White Paper of levelling up. Using the existing community infrastructure levy as an example, land is zoned according to land values. At the independent examination of CIL in Kirklees, where I am a councillor, the planning inspector reduced the CIL charge to nil pounds—nothing—per square metre for a zone which includes the allocated site for 2,000 houses. This is not levelling up.
“One of the criticisms of the infrastructure levy is that it will not be site specific. That means that communities that have large housing developments will not necessarily benefit from improved facilities, such as open green space, play areas, and funding to support school places as well as affordable housing on site. Any infrastructure levy can be spent anywhere in the council district.
“Another of the major criticisms is that the charge will be paid by the developer only towards the end of the construction period, which may be a number of years. Meanwhile, it is expected that local authorities will have to borrow to build the new facilities needed in the expectation of funding at a sometimes much later stage.
“Such is the level of concern about the infrastructure levy proposals that representations have been made by more than 30 organisations, including the County Councils Network, the Royal Town Planning Institute, Shelter, the Local Government Association and the National Housing Federation. The concerns expressed are about complexity, upheaval and uncertainty.
“Finally, the government have stated that the infra- structure levy will be in a test and learn state. This creates further uncertainty. Further, because the infrastructure levy is to be phased in, developers will be dealing with different charging regimes in different parts of the country for many years to come. That clearly adds to uncertainty and complexity for developers. Perhaps the government have lost confidence in the scheme as proposed.
“The difficulty with the infrastructure levy is that this is not the right time to change developer charging systems, nor will it provide sufficient funding at the appropriate time to fund affordable housing and local facilities for developments. It is time for a total rethink.”
For the government, Baroness Scott of Bybrook, a junior minister at the Department for Levelling Up, Housing & Communities, said that the government had yet to finalise the design of the infrastructure levy and planned to take a ‘test-and-learn approach’.
As Jane Scott, the minister also has a background in local government, having been leader of Wiltshire County Council (2003-09) and then Wiltshire Council unitary authority until 2019.
She told the chamber: “Since 2010, average new-build house prices have risen by more than £250,000, and land prices have also risen substantially. This increase in value must be captured within the levy system, allowing for more local benefit, but we recognise the
need to get these significant reforms right. That is why I can commit to the House today that the government will undertake a further consultation on fundamental design choices before developing infrastructure levy regulations. Through further consultation and engagement, and the test-and-learn approach, which we discussed in detail in committee, we will seek to ensure that the levy achieves its aims and that it is implemented carefully.”
Got a story? Email news@theconstructionindex.co.uk
