Calls mount to scrap Infrastructure Levy

The Home Builders Federation has become the latest organisation urging government to drop its Infrastructure Levy plans.

Related topics:  Construction,  Property,  Government
Property | Reporter
21st June 2023
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In a coalition of local authorities, developers, housing associations and charities, HBF has added its signature to a letter sent to levelling up secretary Michael Gove, warning that the Infrastructure Levy, set to replace the current developer contributions system including section 106 and the Community Infrastructure Levy, could reduce funding available for affordable and social rent homes.

The letter calls upon the levelling up secretary to engage with the 30 organisations to reform the current developer contributions system, drawing upon the signatories’ experience and expertise.

The signatories argue that the proposed levy could make it “harder, not easier, for local leaders and communities to secure the benefits of new development”, also including critical supporting infrastructure such as roads, health centres and schools.

Under the Levelling Up and Regeneration Bill, the Department for Levelling Up, Housing & Communities (DLUHC) intends for the Infrastructure Levy to merge and finance both housing and infrastructure. This move, the organisation's state, could raise less money for affordable and social rent homes, creating less of a legal responsibility for developers to offer affordable tenures.

It is unclear, the letter states, how the proposed levy’s rates and thresholds will protect affordable home delivery. The government previously stated that the new system would create more of these homes.

The letter’s signatories point to the government’s own supporting evidence, suggesting that the planned rates and thresholds would only work on certain sites. The organisations say that under the new model, many brownfield sites would be rendered unviable, deepening regional inequalities and exacerbating the housing crisis.

The coalition wrote 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 letter to Gove also reads: “Every signatory of this letter remains committed to supporting you and officials in your department to get the best outcome for local communities. We have come together today to ask that you work with us to fully reconsider how s106 and the CIL could be improved and more widely implemented.

“Though imperfect, we favour retaining and continuing to improve these mechanisms and would value the opportunity to consider how they can be strengthened based on our experience and expertise.”

The signatories ask for an “immediate” ministerial roundtable to “better inform the planning reforms you take forward”.

In its response to the government’s Infrastructure Levy consultation which closed on June 9, HBF warned DLUHC that the proposals would be detrimental in the context of economic uncertainty, the increased burden of regulation including nutrient neutrality and a planning process “which is grinding housing delivery to a halt”.

HBF’s executive chairman Stewart Baseley has signed the letter, alongside representatives from other organisations including the British Property Federation, the Chartered Institute of Housing and the Royal Town Planning Institute.

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