"The idea of bringing in a new infrastructure levy is to remove the complexities experienced under the current system of contributions, but the new levy has fundamental structural challenges and will do little to reduce complexity"
As the consultation closes on the DLUHC's proposals for a new infrastructure levy the BPF highlights that pursuing an entirely new system of developer contributions will add new challenges and will create a more complex system that slows the development process and undermines the timely delivery of associated infrastructure, resulting in increased uncertainty throughout the planning system.
The BPF has raised several concerns with the new levy. These concerns include:
The difficulty local authorities will have setting viable levy rates, particularly for brownfield and urban development sites, due to land values and build costs varying site by site and by land use.
The negative impact the new levy will have on affordable housing provision. Under a single more rigid levy the mechanism for calculating affordable housing contribution will raise less because it is not site-specific.
The need to elevate the Infrastructure Delivery Strategy to the same importance as the new levy to ensure that infrastructure is being delivered efficiently and the benefits of new development are felt locally.
The challenge for local authorities in implementing a new levy and charging schedule is given how under-resourced local authority planning departments currently are and the additional skills required for this work.
The proposal to use GDV as the primary measure through which a developers’ levy liability is calculated will cause uncertainty for developers, funders and local authorities due to changes between valuations and affect scheme viability, especially for commercial and mixed-use projects.
Ian Fletcher, Director of Policy, British Property Federation, commented: “The idea of bringing in a new infrastructure levy is to remove the complexities experienced under the current system of contributions, but the new levy has fundamental structural challenges and will do little to reduce complexity.
"We are incredibly concerned about the impact the new levy would have on the timely provision of new infrastructure, the delivery of new affordable homes, and the uncertainty it would create in the market.
“It will take time for a new levy to be introduced and during that period local authorities and developers will have to continue to rely on s106 and CIL, which will not be reformed under the current proposals.
"We urge the Government to reform the current contribution systems, rather than press ahead with an unnecessary overhaul of the entire system. It is undeniable that CIL and s106 can be improved, but we would like to work with Government to share our expertise and work towards a scenario where the existing system is enhanced and simplified.”
