Infrastructure Levy - EELGA raises concerns

On 9 June, EELGA submitted a response to the Government’s Infrastructure Levy on behalf of the East of England. This response was based on issues raised by local authorities across the region at all levels. Several serious concerns have been submitted, in particular:

• Running costs: There are concerns that the measures will be expensive to administer and enforce. If local authorities are not compensated for this it will place additional funding pressures on already overstretched planning departments.
• Infrastructure and Affordable Housing: There is not enough funding in the system to enable the affordable housing needed to bring the housing market back under control. With more funding required to provide the infrastructure to facilitate affordable houses in the first place.
• Exposure to borrowing: At a time where central Government is concerned with the financial health of the local government sector, there are concerns that asking district councils to borrow large amounts of money against uncertain future income could expose them to high debt risk. This would require larger reserves to manage the risk, or moderation in the amount borrowed – both of which would reduce funding available for housing and infrastructure.
• Open to manipulation: There are concerns that the system could be easier to manipulate as local authorities struggle to fund the required enforcement measures.

While there are some positive messages in the consultation, particularly around the Government’s desire to increase funding around affordable housing and infrastructure, and the flexibility around how district councils can use the borrowing against future infrastructure levy income, the concerns raised are worrying.

Our chair, Cllr Matthew Hicks, has said the following:

“There are serious concerns around the Infrastructure Levy’s implementation based on the proposals that have been highlighted during this consultation. In particular, there are concerns that that the Levy will not provide the scale and consistency of funding needed to enable both affordable housebuilding and the essential infrastructure required to facilitate that; that no additional funding has been announced to assist with the administration of the scheme; and that it exposes planning authorities to considerable borrowing risk”.

In addition to EELGA’s response, a collection of housebuilding, planning, and local government bodies have all co-signed a letter to the Department for Levelling Up, Housing and Communities. The letter outlines the sector’s jointly held concerns around the levy, and asks for the existing regime to be retained and improved. EELGA has also signed this letter, and we look forward to working with our colleagues and central Government to ensure a positive outcome for local authorities in the East of England.

A copy of EELGA’s response can be found here.

A copy of the sector-wide letter can be found here.

We have also been making our views on affordable housing and the barriers to housebuilding in the UK, heard online through “Eastern Promise”, a podcast with Mike Rigby. If you would like to listen, please find a link to the podcast here.