Industry worries over infrastructure levy as Gove pushes ahead with planning reform

Greater clarity is needed on the “complex” infrastructure levy planning specialists have said as the first debate of the Levelling Up and Regeneration Bill, which contains the reforms, took place yesterday afternoon.

The bill, announced in the Queen’s Speech last month, includes a raft of planning reforms and comes as government sources have said Boris Johnson is planning to focus on housing in the coming weeks, following his narrow win in a vote of no confidence on Monday, by 211 votes to 148. It is understood the prime minister is keen to push ahead with the plan to extend the right to buy to housing association tenants and will make promises on the initiative later today.

Charlie Collins, planning director at Savills, said the proposed Infrastructure Levy (CIL), which is designed to largely replace the current CIL and Section 106 systems, could lead to a ‘hotch potch’ of planning policy across the country.

Collins said the draft levelling up bill gave little information on policy, and added that many councils were putting their local plans on hold until more details were released – expected in the consultations on the national development policy and national policy framework later this year.

While the government has said the new levy is designed to avoid the complexity of existing Section 106 negotiations, it has admitted the Section 106 agreements will be retained for other purposes, and will still be used to determine planning contributions for “largest” sites. The legal drafting of the new Levy is largely based on existing CIL regulations.

“A lot of clarity is required,” Collins said, adding: “A lot of secondary legislation will be required to make it work.”

He added that it was unclear when the Community Infrastructure Levy (CIL) will be abolished in favour of the levy, and in some places developers could be paying the two levies, such as in London.

A spokesperson for the House Builders Federation said: “Speeding up the process of agreeing developer contributions is a welcome ambition, but through the current system home builders already provide more than £7bn per year in local infrastructure along with more than half of all new affordable homes. Adding another levy alongside section 106 nationally and CIL in London and Wales runs the risk of creating a more complex framework at a time when house builders are also struggling under the weight of a fast growing tax and regulatory burden.”

Marie Chadwick, policy leader at the National Housing Federation, said: “In our discussions with government, we’ve pushed for clarity on how delivery of social and affordable homes will be protected, and what this will mean for sites that are 100% affordable housing.”

The town planners umbrella-body the RTPI said that the levy “could prove too complex and hinder less well-off parts of the country”.