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Government eyes national non-negotiable developer contribution process

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  • 05/03/2018
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Government eyes national non-negotiable developer contribution process
The government could consider a national non-negotiable approach to setting developer contributions to replace current local authority-based arrangements.

 

Its suggestion comes alongside significant amendments to the existing developer contributions regime intended to make the system more transparent and accountable.

These reforms centre on the present Community Infrastructure Levy (CIL) and allowing local authorities to introduce a combined Strategic Infrastructure Tariff (SIT).

 

Key objectives published as part of the Ministry of Housing, Communities and Local Government consultation into reforming planning regulations include:

  • Reducing complexity and increasing certainty for local authorities and developers, which will give confidence to communities that infrastructure can be funded;
  • Supporting swifter development through focusing viability assessment on plan making rather than decision making, reducing scope for delays caused by renegotiation of developer contributions;
  • Increasing market responsiveness so that local authorities can better target increases in value, while reducing the risks for developers in an economic downturn;
  • Improving transparency for communities and developers over where contributions are spent and expecting all viability assessments to be publicly available subject to some very limited circumstances;
  • Allowing local authorities to introduce a Strategic Infrastructure Tariff to help fund or mitigate strategic infrastructure, ensuring existing and new communities can benefit.

 

Complex and uncertain

The Supporting Housing Delivery Through Developer Contributions paper acknowledges developers should be supporting infrastructure and communities they are building in and that local authorities can hold them to account.

“It is right to consider whether a higher proportion of affordable housing can be delivered where there is a higher uplift in land value created by development,” it said.

“However, it is clear that the current system of developer contributions is not working as well as it should. It is too complex and uncertain. This acts as a barrier to new entrants and allows developers to negotiate down the affordable housing and infrastructure they agreed to provide,” it added.

 

Radical solution

To address this complexity, the paper suggests a potentially radical solution.

“One option could be for developer contributions to be set nationally and made non-negotiable,” it said.

“We recognise that we will need to engage and consult more widely on any new developer contribution system and provide appropriate transitions. This would allow developers to take account of reforms and reflect the contributions as they secure sites for development.”

It added: “The proposals in this consultation are an important first step in this conversation and towards ensuring that developers are clear about their commitments, local authorities are empowered to hold them to account and communities feel confident that their needs will be met.”

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