Fixing our broken housing market shouldn’t break community infrastructure

Having worked with pupil yield data for the last 12 years, Ian Nockolds, Director at Cognisant shares his views on the implications of the Government’s recent housing White Paper and the CIL Review, for infrastructure funding.

My first thumb through ‘Fixing our broken housing market’, the Government’s latest Housing White Paper, was very much focused on its implications for infrastructure payments. Indeed, given that the White Paper was published alongside the Community Infrastructure Levy Review, ‘A New Approach To Developer Contribution’, infrastructure payments and developer contributions appeared to be the order of the day.

In my view, the CIL Review was pretty revolutionary, calling for the Government to replace the Community Infrastructure Levy with a hybrid system of a Local Infrastructure Tariff (LIT) and Section 106 for larger developments. Indeed, particularly eye-catching was the apparent doubts Local Authorities expressed to the “neighbourhood share”. This relates to the principle of allocating a portion of CIL receipts to neighbourhood projects and the impact this had had on funding larger infrastructure, such as roads and schools. One in the eye for Localism!

The White Paper itself was less forthcoming. Whilst it was interesting to note the historic failure of Government to align new infrastructure with new housing, resulting in “more congestion on local roads and pressure on places at the local school”, references to the future of developer contributions were limited, to say the least.

The Local Authorities I’ve spoken to in the wake of the White Paper’s publication were keen to limit their response to the statement that the Government won’t be responding to the CIL Review until the Autumn Budget. Yet I believe there are breadcrumbs to be had. Transparency is a key theme, particularly the reference to “standardised open book Section 106 agreements, to reduce disputes and delays”.

Building more of the right homes in the right places means ensuring the local infrastructure is in place to support these developing communities. The White paper suggests that Local Authorities will be offered more funding for infrastructure, but it also references an “improved approach to developer contributions to help pay for new infrastructure.”

The headline-grabbing infrastructure proposal is the Housing Infrastructure Fund (HIF) – all £2.3 billion of it. Whilst the White Paper recognises that new housing developments mean more congestion on local roads and pressure on places at local schools, the HIF will only be helping with new roads and utility connections, according to an answer to a recent parliamentary question.

Education is inextricably linked to housing building, yet the funding for the infrastructure Local Authorities remain legally obliged to provide remains far from clear. Given the importance of transparency, it’s going to be more important than ever for Local Authorities to have a robust evidence base that established the impact development will have on local infrastructure. Even if the infrastructure payments developer makes are held artificially low to make housing projects viable, the true cost of community infrastructure still needs to be known.