CLC and Build UK join calls for infrastructure charge to be scrapped

A coalition of built environment chiefs has called on the government to backtrack plans for a new infrastructure levywhich would shake up the system of contributions from promoters to new housing plans.

The Construction Leadership Council and Build UK are among the signatories of a letter urging housing secretary Michael Gove not to introduce the controversial levy, which is being pitched as a replacement for Section 106 deals and the Community Infrastructure Levy ( CIL).

“We cannot support reforms that are likely to leave communities with less new social and affordable housing, mixed and balanced developments and less infrastructure they need,” the letter says.

Instead, the groups want the government to retain Article 106 and the CIL, and work with them to improve these mechanisms. Section 106 is a means by which planning authorities impose obligations on developers, for example a demand that a proportion of new homes be affordable. The CIL, on the other hand, is a charge levied by the town councils on housing estates depending on the surface area.

The infrastructure levy would see developer contributions to local authorities based on a formula linked to the sales value of a new development. The tax would be paid after the project is completed, and councils will be able to spend the revenue as they see fit.

Plans for the infrastructure charge were first introduced in the government’s 2020 White Paper proposing an overhaul of the planning system. TThe levy has since become part of the Upgrading and Regeneration Bill. A consultation on the levy, which closed earlier this month, suggested phasing it in over the next 10 years.

However, the group’s letter says: “The upheaval of a new system and the time it would take to roll it out would create prolonged uncertainty throughout the planning system, stifling our efforts at a time when the need to building more affordable housing and infrastructure is urgent.”

The groups warn that the “radical overhaul of the developer contribution system … presents significant operational and economic challenges that will make it difficult for existing communities to reap the benefits of new development in their area.”

It comes after the Federation of Home Builders warned in February that house building in England was likely to fall to its lowest level since the Second World War.

In response to the letter, a spokesperson for the Department for Housing, Housing and Communities said: “We know communities want developments to include key infrastructure such as GP practices, schools and transport links. That’s why we have looked at the new infrastructure levy, which will ensure we are delivering affordable housing alongside vital infrastructure.

“We are carefully considering the responses to this inquiry and will respond in due course. Any changes will be rolled out gradually to ensure we get it right.”

The letter can be seen here.