Infrastructure levy tied to PM’s plan to build 300,000 houses a year will benefit south-east most, say experts
Boris Johnson is facing fresh warnings that his planning overhaul risks denting his commitment to “level up” the country, amid mounting Tory anxiety over the proposals.
Conservative MPs have already raised concerns directly with the prime minister about planning reforms designed to push through the construction of more than 300,000 houses a year. MPs have focused on the model used to allocate new housing targets for each area, with Tories warning it will lead to houses being built in their shire heartlands, rather than the metropolitan centres.
However, there are new warnings that other parts of the plan could end up hurting the government’s central election pledge to “level up” more deprived parts of the country, where the Tories found new supporters at the last election.
Under the proposals, funds for new infrastructure and social housing would be raised from a nationally fixed levy. The levy, handed to local councils, would be applied to the predicted market value of a building development once completed.
Planning experts warned that the huge disparity in the market value of developments between London, the south-east and the rest of the country meant the system could end up raising most funds for areas that already had good local amenities.
Setting the rate nationally could mean developers are attracted to more profitable schemes in the south-east than elsewhere. An initial analysis by some of Britain’s leading housing academics warned there were “consequences for regional imbalances”.
“Since the values of completed developments are much greater in London and the southern regions of England than elsewhere, [councils] in these areas will have greater capacity to benefit and fund their infrastructure needs, including schools, doctors’ surgeries, highways … in addition to securing new affordable homes,” write professors Tony Crook and John Henneberry from the University of Sheffield and Christine Whitehead from the London School of Economics. “All of these will be more difficult to secure elsewhere.”
There are calls for the levy to be set locally instead. Neil O’Brien, Tory MP for Harborough, Oadby and Wigston, said this was preferable “because what can be raised varies so much that one size is unlikely to fit all”.
Christopher Pincher, the housing minister, writing on the Conservative Home website, has tried to calm MPs’ fears that the model used to allocate housing needs across the country will hit Tory seats. He said the initial calculations were only “the first step”.
The Ministry of Housing, Communities and Local Government was contacted for comment, but had not done so by the point of publication.