Source · Select Committees · Public Accounts Committee
Recommendation 46
46
Accepted
MHCLG expects Building Safety Levy to have minimal impact on housing supply.
Conclusion
We asked MHCLG about the potential impacts of the Building Safety Levy on housing provision. MHCLG said it had not published any impact assessment or produced specific numbers, but believed the impact would be relatively small. It told us that it had deliberately designed the Levy to take into account factors to protect housing supply. It explained that Levy design features, such as discounted rates for brownfield sites and exemptions for affordable housing, would protect viability and minimise the impact of the Levy on building supply.79 In a follow up letter, MHCLG told us that it thought that multiple factors will affect the number of houses developers are able to build including finance, land prices, labour and materials costs.80 78 Q 5; C&AG’s Report, para 3.11; RDC0006 Written evidence submitted by the Home Builders Federation 79 Qq 97–99 80 Letter from Ministry of Housing, Communities and Local Government to Committee of Public Accounts, 18 February 2025 27
Government Response Summary
The government committed to publishing an impact assessment alongside draft levy regulations later this year and providing an update to the Committee before the end of 2025 on the interaction between remediation policies and housebuilding ambitions.
Government Response
Accepted
HM Government
Accepted
7.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2025 7.2 The government will write to the Committee before the end of 2025 to provide an update on the interaction between remediation policies and housebuilding ambitions. Specifically on the Building Safety Levy, the government will publish an impact assessment alongside the draft levy regulations that will be put before Parliament later this year. The levy has been designed to minimise any detrimental impact on housing supply, whilst balancing the need to raise the revenue required to remediate buildings. It will come into effect in Autumn 2026.