The government has decided to
delay the full introduction of its proposed new Infrastructure Levy by up to 10
years, causing some to question whether the policy will ever see the light of
day.
Late on 17th March
2023, the Department for Levelling Up, Housing and Communities (DLUHC) issued a
consultation on the Levy, which is designed to largely replace the use of
section 106 agreements to secure planning contributions, in which it said it
wanted to introduce it via a 10-year “test and learn” period.
The consultation also made clear
the government intends the mandatory Infrastructure Levy will be charged at the
point a scheme is completed, to maximise returns, and said councils would be
able to require a proportion of the levy be delivered “in kind” via on-site
affordable housing.
The levy was supposed to replace
section 106 agreements of the sort used in planning consents for schemes such
as new housing
The government said it recognised
that moving from the current system, whereby councils secure payments for local
infrastructure and affordable housing from developers via a combination of
Section 106 agreements and the Community Infrastructure Levy, to the new Levy
“represents a significant change” and said previous attempts to change systems
of developer contributions had been stymied by too rapid implementation
periods.
“Given this combination of
factors, the government will introduce the Levy over an extended period through
a ‘test and learn’ approach”, the consultation said, with the levy piloted
first in a “representative minority of planning authorities before nationwide
rollout.” It added the “test and learn” period will last for 10 years.
The extended implementation
timeframe follows concern from the industry over the impact of the policy on
the housing sector, particularly in terms of the delivery of affordable
housing.
In the last three years, an
average of 48% of the new affordable homes built in the UK have been provided
by section 106 contributions, according to government data.
Housing secretary Michael Gove
said the infrastructure levy would give local leaders “the tools to bring
forward more affordable housing and the transport links, schools and GP
surgeries” while “putting an end to lengthy negotiations with developers [that
are] seeking to shirk their responsibility to provide for local people”.
But the extended implementation
period, combined with the complexity of the policy, the political situation of
the current government, and the Labour Party’s opposition to it, has caused
some to question whether it will ever see the light of day.
Planning consultant Catriona
Riddell, also subject specialist for the Planning Officers Society on strategic
planning, said: “There are questions about whether it’s going to be able to
deliver what it’s supposed to deliver. It’s so complicated, particularly when
you think about how this work in two-tier authorities and Combined Authority
areas.
“Even assuming the Conservatives
get back in, on the timescale they’ve set out, it’ll be years before they get
it operating efficiently, if they ever do. People are asking is it going to
happen.”
Riddell’s comments come after
Labour’s shadow housing minister Matthew Pennycook last month confirmed that
any future Labour government would not take the policy forward, due to fears
over the impact on affordable housing supply.
Taken from an article published by
Joey Gardiner 21st March 2023 https://www.building.co.uk/news/government-delays-introduction-of-infrastructure-levy-by-a-decade/5122363.article
