Officials in the area advocate for the government to scrap planned modifications to infrastructure tax policies
In a letter submitted to Levelling Up Secretary, Michael Gove, last week, a coalition of 30 organizations, including the Greater London Authority (GLA), the Construction Leadership Council, Build UK, the Construction Industry Council, the Royal Town Planning Institute, and the Local Government Association, have expressed their concerns about the government's plans to introduce a new infrastructure levy for affordable housing.
The new levy, intended to replace the current developer contributions system, which includes Section 106 (S106) and the Community Infrastructure Levy (CIL), could potentially lead to a decrease in the delivery of affordable and social rent homes, which are currently in high demand. Under the proposed changes, there would be less of a legal obligation for developers to include affordable housing.
The letter warns against reforms that could leave communities with fewer social and affordable homes, mixed and balanced developments, and less of the infrastructure they need. It also highlights the lack of thought the government has given to how homes will be financed under the new levy. The signatories claim it is unclear how the proposed levy's rates and thresholds will protect the delivery of affordable homes.
Last year, Section 106 (S106) was responsible for delivering 47% of all affordable homes built in England. The current system raises around £7bn per year in payments for affordable housing and on-site infrastructure (S106) and large-scale infrastructure projects (CIL). The letter states that the radical overhaul of the developer contribution system presents significant operational and economic challenges.
The organisations are calling for a ministerial roundtable meeting to explore options for reforming the current system instead of introducing a new one. They ask the government to work with them to fully reconsider how S106 and the Community Infrastructure Levy (CIL) could be improved and more widely implemented. The letter warns that the levy could make it harder for local authorities and communities to secure benefits from new development, resulting in fewer homes for affordable and social rent.
The initiative was started by the Greater London Authority (GLA) to urge the government to reform the current S106 and CIL systems rather than introducing a new system for developer contributions. The government argues that the new levy will help provide more affordable properties, but the signatories remain sceptical, expressing their commitment to supporting the government to get the best outcome for local communities.
