Councillors have been lining up to raise concerns over the government’s proposed overhaul of the government planning system.
They are especially worried about the changes to infrastructure levies, which they say threaten to be left at the door of taxpayers.
The Government’s recent white paper sets out key principles for a new English planning system.
The paper is likely to involve reforms extending from plan making – which would create a zoning arrangement under which land would be allocated for growth, renewal, or protection – to the complete replacement of the method used to pay for infrastructure through so-called Section 106 and CIL contributions, with a one-size-fits-all consolidated ‘infrastructure levy’.
It is these last changes that have caused particular concerns for councillors at Essex County Council, who have argued the abolition of Section 106 and community infrastructure levy agreements, which local authorities use to make sure development includes affordable homes, could lead to costs being picked up by taxpayers.
The reforms would see S106 (in so far as it covers financial planning obligations) and the community infrastructure levy (CIL) abolished.
They would be replaced with a new nationally set infrastructure levy calculated as a fixed proportion of the value of the development, above a set threshold and payable on occupation, not commencement.
The government states its aim is for the new levy to raise more revenue than under the current system, and deliver at least as much, if not more, on-site affordable housing.
Controversially the white paper places an emphasis and risk on allowing local authorities to borrow against forecast levy contributions to forward fund “strategic infrastructure” rather than this being delivered by a developer.
The government states that this will address issues in the current system by ensuring the rate is charged on the final value of development, be levied at point of occupation, provide a value-based minimum threshold below which a levy is not charged and provide greater certainty for developers and communities in respect of the likely charges.
It adds that to better support the timely delivery of infrastructure, it would also allow local authorities to borrow against infrastructure levy revenues so that they could forward fund infrastructure.
The paper says that enabling borrowing, combined with a shift to levying developer contributions on completion, would incentivise local authorities to deliver enabling infrastructure, in turn helping to ensure development can be completed faster.
But councillors from all sides have questioned how this would work.
Tory councillor Wendy Schmidt worries that without assurances that developers will build, infrastructure may be built without any subsequent forthcoming homes.
She said at the council’s place services and economic growth policy and scrutiny committee meeting on Thursday, September 24: “The infrastructure levy I think is extremely alarming. The developer has got to put the money up front.
“Why should local councils and taxpayers have to borrow money to do it?
“Who is to say that we as a local authority borrow the money to put the infrastructure in and then the builder doesn’t build?
“At the moment we have no way of making developers build, which is where they get us on the five-year supply.
“It is a yawning gap. We don’t have powers to force them to build out.
“They should be made to put the money in for infrastructure and that would make them build.”
Matthew Jericho, spatial planning manager at Essex County Council, said in a presentation to councillors that agreeing Section 106 agreements, particularly on larger sites, remains a “complex and challenging process and can be a major cause of delay”.
However, he said it does create a direct link between new development and the measures necessary to mitigate the effects of proposals, adding that it remains to be seen how the new evy will similarly address this issue and ensure mitigation at a site level is adequately funded and infrastructure delivered at the time it is required.
He added that it is unclear how the levy would be split among two tier authorities and effective implementation would appear to be linked to local government reform and larger and combined local authority areas.
He told the meeting: “The infrastructure levy points are certainly issues that many authorities and regional planners have raised in response.”