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Housing developers to fund infrastructure schemes in May's planning revolution

Housing construction

Housing developers could be forced to contribute funding to local infrastructure schemes as part of the government’s radical plans to overhaul the  planning system. 

In a speech unveiling proposed changes to the National Planning Policy Framework (NPPF), prime minister Theresa May also promised that housing developers would be held accountable by local authorities.

Under the proposals, which will go out to consultation, combined authorities would be allowed to charge a Strategic Infrastructure Tariff (SIT) where there is a specific, large-scale piece of infrastructure which needs funding or where the proposed infrastructure would cross authority boundaries.

May said the developer contribution reforms and other changes to the NPPF would ensure the “right infrastructure” is built to support new housing.

Subject to further consultations, house builders could also be made to help fund infrastructure projects via a national, non-negotiable contribution.

Chair of the National Infrastructure Commission (NIC) Sir John Armitt warned that mistakes must be learnt from past housing developments, stressing that new transport schemes were central to tackling the housing crisis.

In yesterday’s speech, May said: “When people oppose large-scale development in their area, it’s often because they’re worried their village or town simply won’t be able to bear the weight of hundreds of new arrivals.

“They want to know that any new homes will be accompanied by appropriate new facilities and infrastructure. Under our new planning rules, that’s exactly what will happen.”

Currently, developers pay contributions to housing-related infrastructure schemes through the Community Infrastructure Levy (CIL) and Section 106 planning rules.

But the government says the current system is “too complex and uncertain” and allows developers to negotiate down the affordable housing and infrastructure they agreed to provide.

Commenting on the proposed changes, Armitt said: “Well-designed infrastructure, and particularly local transport, can play a crucial role in addressing some of the most serious constraints on housing and ensuring that new houses become homes – built in the right place and supporting the long-term needs of local people and businesses.”

He added that the NIC’s report on the Cambridge to Milton Keynes growth corridor, which would support 1M new homes by 2050 with new infrastructure and transport schemes, could provide a blueprint for future developments.

The government has already started to link house building and infrastructure. In February, 133 local authority projects became the first to benefit from an £866M pot specifically for housing-related infrastructure.

The funding came from the government’s £5bn Housing Infrastructure Fund, set up to tackle the UK’s housing shortage.

Along with the reforms to developer contributions, around £44bn of loans and funding was announced to help boost housebuilding, which local authorities most in need of cash will be able to access.

Research into “innovative methods of modern construction” such as modular housebuilding will be carried out, while other reforms to the planning system could see homes built in disused retail spaces and on more brownfield sites.

However Local Government Association chair Lord Porter said that changes to the planning system would not solve the problem, claiming that councils already approve nine out of 10 planning applications.

He said: “It is essential that councils and their communities are empowered to ensure local development creates prosperous places, that new homes are good quality and affordable, and that they are supported by crucial services and infrastructure such as roads and schools.

“No-one can live in a planning permission. Developers need to get on with building affordable homes with the needed infrastructure and councils need greater powers to act where housebuilding has stalled.”

 

 

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