Government officials are being pressured to scrap proposed changes to infrastructure levy regulations by local authorities.
In a recent development, thirty prominent organisations, including the Construction Leadership Council, Build UK, the Construction Industry Council, the Royal Town Planning Institute, and the Local Government Association, have penned a letter to Levelling Up Secretary, Michael Gove, expressing concerns about the government's proposed new infrastructure levy for promoting affordable housing.
The letter, submitted last week, highlights the organisations' concerns that the new levy could make it harder for local leaders and communities to secure benefits from new development, potentially resulting in fewer homes for affordable and social rent.
The current developer contributions system, which includes Section 106 (S106) and the Community Infrastructure Levy (CIL), raises around £7bn per year and finances affordable housing and on-site infrastructure, as well as large-scale infrastructure projects. Last year, S106 was responsible for delivering 47% of all affordable homes built in England.
However, the government's argument that the new levy will help provide more affordable properties is disputed by the organisations that signed the letter. They argue that the levy could leave communities with fewer social and affordable homes, mixed and balanced developments, and less infrastructure.
The organisations claim that the levy could make it difficult for existing communities to realise the benefits of new developments in their area. They also express concerns about the lack of thought given to how homes will be financed under the new levy.
Moreover, the letter warns that the proposed levy's rates and thresholds are unclear and may not protect the delivery of affordable homes. The organisations argue that they cannot support reforms that are likely to leave communities with fewer social and affordable homes, mixed and balanced developments, and less of the infrastructure they need.
The organisations remain committed to supporting the Levelling Up Secretary and officials in his department to get the best outcome for local communities. They call for a ministerial roundtable meeting to explore options for reforming the current developer contribution system, citing significant operational and economic challenges posed by the radical overhaul of the system.
In March 2023, the government proposed the new infrastructure levy, and last year, multiple organisations advocated for a ministerial roundtable meeting to improve the current contribution system for developers instead of introducing a new system.
The letter emphasises the need to support local communities in achieving the best outcome. The organisations reiterate their commitment to supporting the government's goal of building more affordable homes but urge a reconsideration of how S106 and the CIL could be improved and more widely implemented.
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