25 Jul 23

New inquiry focusing on improving existing system of developer contributions not government’s planned Infrastructure Levy

A group of parliamentarians is to look at ways to improve the functioning of the current section 106 system for generating developer contributions as an alternative to the introduction of the government’s proposed new Infrastructure Levy.

The All-Party Parliamentary Group (APPG) on Housing and Planning said it is launching an investigation into the developer contributions system in order to “hear evidence” about the controversial proposed Infrastructure Levy, and to “explore” ideas to improve the current system of section 106 agreements and local Community Infrastructure Levy charges.

Section 106 agreements have long been used by planners and developers as a legal basis to agree contributions for local infrastructure and affordable housing necessary to allow schemes to go ahead, while CIL contributions are levied by many authorities on a pound per square metre basis to pay for local infrastructure.

Both systems have been criticised as cumbersome and bureaucratic, however, the government’s proposal to replace them with a national Infrastructure Levy, charged on the basis of the gross development value of a scheme, is widely viewed as likely to make the situation worse. Last month thirty separate organisations, including those representing housebuilders, housing associations, local councils, charities and planners, called on the government to scrap the Levy on the grounds that it will result in fewer affordable homes being built and threaten housing development more generally.

The government has sought to head off criticism of its plan by saying it will bring in the levy via a “test and learn” approach over the coming decade, though Labour has promised to scrap it if it forms the next government.

The APPG, convened by the Royal Town Planning Institute, said “a review will be made in order to improve the performance of England’s developer contributions mechanisms in recent years”, as opposed to looking in detail at how to implement the proposed Infrastructure Levy. The body said its inquiry will run over the summer, with the closing date for submissions of evidence of September 5.

The APPG chair Dave Simmonds MP said: “This is a timely investigation into the challenges and opportunities facing England’s developers as we approach an election year. This investigation will go a long way to informing lawmakers of the situation facing the industry, and I echo the APPG’s call to representatives from interested parties to submit their evidence ahead of the deadline in September.”

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