Recommendation 25

There is a case for reforming the Community Infrastructure Levy, but it is less clear that Section 106 agreements needed replacing. The Government should be mindful of the cumulative effect of the challenges posed to affordable housing provision by the proposed abolition of Section 106, the raising of the threshold for small sites exempt from affordable housing, and the expansion of permitted development rights. We also welcome the Government’s decision in April 2021 not to proceed with a higher threshold for exemption from having to provide affordable housing to sites of forty or fifty dwellings. The Government should reconsider the proposals of the 2017 review of the Community Infrastructure Levy as an alternative to their national Infrastructure Levy. If the Government does proceed with its Infrastructure Levy proposal, a localised rate should be set reflecting local land values. The Government needs to clarify who will set these localised rates, and whether these will differ by local authority or some other sub-national area. The Government must guarantee there will be no reduction in the amount of affordable housing, including social housing, being delivered as a result of their proposed changes. The Government must recognise that the Levy will not raise enough money to pay for all infrastructure, especially large scale sub-regional and regional investments across much of the country. Further inequalities will need to be addressed through redistribution of Levy funds and through increases in infrastructure spending from central Government. We also recommend leaving the Mayoral Infrastructure Levies in place.