Government confirms support for developer contributions
December 14, 2018

The Government has expressed its support to continuing – and reforming – the system of developer contributions to make them “more transparent, efficient, and accountable.”

The Ministry for Housing, Communities and Local Government (MHCLG) was responding to a report from Parliament’s Housing, Communities and Local Government Committee, which recommended a move towards a significant proportion of the uplift in land values after planning permission being made available to the state to invest in new infrastructure and public services.

MHCLG said that while there is potential for claiming a greater proportion of land value increases, its priority is delivery and to “provide more higher-quality housing more quickly” and “evolve the existing system of developer contributions to make them more transparent, efficient, and accountable”.

The Government will now explore options for reforms, “providing it can be assured that the short-run impact on land markets does not distract from delivering a better housing market”.

Commenting on the Government’s response Clive Betts MP, Chair of the Housing, Communities and Local Government Committee said:

“More of that increase in land value should be captured for public benefit. We think all the infrastructure should be paid for by the uplift in value. It is not anti-development, it is just ensuring that the public purse benefits more than individual landowners.”

The British Property Foundation however welcomed the Government’s position, with Real Estate Policy Director Ian Fletcher saying:

“If landowners don’t get the uplift in value from change of use, fewer landowners will come forward with land. This will exacerbate the housing crisis.

“The government’s priority is delivery and to provide more high-quality homes and communities, more quickly. So, it is right that the government focuses on improving the existing system of developer contributions to make them more transparent, efficient, and accountable.”

The issue of the balance of power between landowners, developers, local authorities and local communities continues to cause controversy, and it will be incredibly difficult for the Government to make drastic reforms in the favour of local authorities whilst continuing to achieve its ambitious housing targets. In the wake of the Letwin Review and the updated NPPF, and with the ongoing distraction of Brexit, it would seem unlikely that the Ministry will embark on any major reforms in the near future.