Calls for government to alter infrastructure levy to avoid making a ‘bad situation worse’

In the CSJ’s new report, it stated: “Whilst the government has committed to ensuring the new system performs at least as well as the previous one, we are concerned that the policy framework they are establishing is not up to this task – either in terms of the quantity or type of affordable housing it will provide.” 

It suggested that there is “considerable dissatisfaction” with the current system. But the report added: “The government’s proposal to level up affordable housing through a new ‘infrastructure levy’ is liable to make a bad situation worse.”

The CSJ calls on the government to set “baseline levels of delivery” along with a new set of annual targets for affordable housing. 

It also urges “stronger requirements” for local authorities to “increase (and at least maintain) levels of affordable housing supply”. 

Other recommendations include limiting the definition of affordable housing and a call to establish a “robust system to ensure continued delivery of on-site affordable housing in new build developments”. 

The report also questions how the levy will help with the levelling-up agenda. It suggests that many areas prioritised for levelling up have lower land and development values, which means receipts from the infrastructure levy will be less. As a result, fewer funds will be available for affordable housing. 

“Despite being in a ‘Levelling Up’ Bill, it is far from clear how the infrastructure levy will be of any meaningful use to those areas,” the report said. 

The report has been given added weight as former rough sleeping and housing minister Eddie Hughes has written its foreword, backing the recommendations. 

He wrote: “With almost half of all new housing association homes funded through developer contributions, we have to get these reforms right.”

He added: “Government must scale up capital investment, especially in left-behind communities, to ensure the levy does not maintain or further entrench economic inequalities.”

The National Housing Federation and the G15 also voiced their support for the report.

In a tweet, the NHF said it “shared the concerns identified”.

It added: “It is essential that any changes to the planning system protect the delivery of truly affordable social housing.”

The G15 said: “Getting planning reform right is vital if we are to build the genuinely affordable homes that are needed to tackle the housing crisis.”

In response, a Department for Levelling Up, Housing and Communities spokesperson said: “Increasing the number of genuinely affordable homes is central to our levelling-up mission and we’re investing £11.5bn to build more of the affordable, quality homes this country needs.

“The Levelling Up and Regeneration Bill gives the government powers to create a new infrastructure levy which will allow affordable housing and infrastructure like schools, GP surgeries and new roads to be provided in a more effective, transparent and efficient manner.

“The levy will be expected to deliver as much if not more on-site affordable housing than at present.”