Housing Development Levies

Housing, Communities and Local Government – in the House of Commons on 11th January 2021.

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Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

What progress he is making on reforming levies on housing development.

Photo of Robert Jenrick Robert Jenrick The Secretary of State for Housing, Communities and Local Government

Contributions from housing developers see around £7 billion a year invested back into communities, building more homes and vital infrastructure, such as schools and hospitals, and helping to deliver more than 30,000 affordable homes last year. But, as my hon. Friend has raised with me a number of times, the system is still too long-winded and complex. To fix that, we will introduce a flat rate, non-negotiable single infrastructure levy. As set out in the “Planning for the future” White Paper, that will accelerate house building, aim to raise more revenue than under the current process and deliver at least as many on-site affordable homes. We will publish more details on this soon.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

Does my right hon. Friend agree that, as well as raising more for the infrastructure that is needed to support new housing, more of the cost should be borne by developers rather than taxpayers, and that we should give more power, freedom and flexibility to local councils about how they spend those revenues in line with local priorities?

Photo of Robert Jenrick Robert Jenrick The Secretary of State for Housing, Communities and Local Government

The current system is not successful. It leads to long-winded wrangling. It places the cards in the hands of big developers, rather than local councils, communities and, in particular, small developers, who find it too costly and complex to navigate. The new infrastructure levy will be simpler and more certain and, as my hon. Friend says, it will do two important things. First, it will raise a larger amount of money, capturing more of the uplift in land values, so that more money can be put at the disposal of local communities. Secondly, it will give greater freedom to local councils to decide how they choose to spend that, so that development can benefit communities in flexible ways.