Government launches consultation on plan for infrastructure levy to replace section 106 contributions

The Government has launched a consultation on its plan to replace section 106 contributions for most developments with a new, "mandatory, more streamlined, and locally determined" infrastructure levy.

According to the Department for Levelling Up, Housing and Communities, the new levy will see developers pay a fairer share for affordable housing and local infrastructure such as roads, schools and GP surgeries.

It will replace section 106 contributions, which are paid by developers and fund affordable housing as well as site-specific infrastructure.

The new system will prevent developers from negotiating down the amount they contribute to the community when they bring forward new projects, as the amount will be calculated once a project is complete, instead of at the stage the site is given planning permission.

Councils will also be given powers to set rates themselves.

A portion of the money will be passed directly to communities as a 'neighbourhood share' to fund their infrastructure priorities. In addition, the reforms would require councils to engage with communities and create an infrastructure delivery strategy.

Secretary of State for Levelling Up, Housing and Communities, Michael Gove, said the plans would bolster the Government's levelling up commitment by giving local communities more control.

He stated that the change would give local leaders "the tools to bring forward more affordable housing and the transport links, schools and GP surgeries their communities need".

Gove added: "It will also speed up delivery and put an end to lengthy negotiations with developers seeking to shirk their responsibility to provide for local people."

Last month, the County Councils Network responded to the plans with scepticism, warning that the levy would be a "jack of all trades" that could leave little money for infrastructure.

The new levy will be spent on a wider array of things, including affordable housing and local council services, according to the CCN. This could see spending on infrastructure improvements reduced under the new system, the CCN warned.

In light of this, the CCN called on the Government to ensure that there is sufficient funding left over in the new system to build infrastructure to support new homes and that the proposed reforms risk "simply replacing one broken system with another".

The consultation is scheduled to close on 9 June 2023.

Adam Carey