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NHF welcomes amendments to address concerns around Infrastructure Levy
The National Housing Federation (NHF) has welcomed amendments to the Levelling Up and Regeneration Bill that aim to address concerns about the proposed Infrastructure Levy that will replace Section 106.
In a letter to all members of the House of Lords this week, Baroness Scott revealed she had tabled amendments to the bill which place firmer emphasis on the need for local authorities to maintain a similar or greater level of affordable housing funding under the new system.
According to the amended wording, local authorities now “must seek to ensure” that the level of affordable housing funding provided by developers is maintained or exceeded, unless planning authorities determine that it would make development economically unviable.
Another amendment makes it clear that planning authorities can require developers to pay a proportion of their levy liabilities in-kind as onsite affordable housing.
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Two further amendments aim to strengthen the ‘test and learn’ process through which the levy will gradually be introduced over 10 years. Local authorities will be able to disapply the levy if it is not delivering on its policy aims. They may then use Section 106 to secure affordable housing and infrastructure.
A final amendment will place a duty on the secretary of state to publish a report on the impact of the Infrastructure Levy on the delivery of affordable housing and other infrastructure. The report will be published no later than five years after the first levy charging schedule comes into effect.
Kate Henderson, chief executive of the NHF, said: “At a time of a chronic shortage of social homes, these amendments to the proposed infrastructure levy in the Levelling Up and Regeneration Bill represent a hugely welcome step for the protection of affordable housing.
“Ministers have heeded the specific concerns of the sector and its supporters in the House of Lords. At a time where there are 4.2 million people are in need of a social home, it’s critical that housing associations, local authorities and central government work together to ensure that we are delivering quality housing that people can afford.”
The amendments were also welcomed by an alliance of 17 developing housing associations in the North of England.
Steve Coffey, chair of Homes for the North, said: “It is essential for Infrastructure Levy rates to be set at a level that will support the delivery of at least as much affordable housing as is currently the case. The new proposal from Ministers provides better protections for the delivery of new affordable homes, as campaigned for by Homes for the North and its partners.
“We will only see the real world effect of this in the delivery of new affordable homes as the Levy is rolled out. Around three quarters of S106 is currently spent on new affordable homes. It remains to be seen if local councils will choose to prioritise new homes to this extent when they are given greater spending freedom. Our sector must watch carefully as early pilots get underway for any signs that the delivery of new affordable homes will drop significantly.
"With housing delivery set to fall by as much as 50% in the short term, according to recent research, a simultaneous fall in the proportion of developer contributions spent on affordable homes would be disastrous.”
Last month, 30 housing associations, house builders, charities and councils urged the government to abandon the levy, warning it could cause a reduction in the number of new affordable homes and less money assigned to infrastructure.
