New Levy Forces Developers to Pay Up for Affordable Housing and Local Services
The Government has unveiled plans for a new infrastructure levy that will make developers cough up a fairer share to fund affordable homes and local facilities like GP surgeries, schools, and transport links.
Developers to Pay More, Councils Get More Power
- Consultation launched on a fresh developer levy to replace current Section 106 contributions
- Councils will set their own levy rates and decide how the cash is spent locally
- New legal ‘right to require’ stops developers from wriggling out of affordable housing commitments
The levy, announced Friday 17 March, will be charged after developments are completed — not at the planning permission stage. This means councils will benefit from rising land values, especially on big projects that take years to finish.
Local authorities will also gain the power to determine levy rates themselves, ensuring the money funds what their communities truly need. A chunk of the revenue will go directly to neighbourhoods to support infrastructure priorities voted on by residents.
Michael Gove: Giving Power Back to Local Communities
“Central to our levelling up mission is ensuring local communities can take back control,” said Secretary of State for Levelling Up, Housing and Communities Michael Gove.
“The infrastructure levy will do just that – giving local leaders the tools to bring forward more affordable housing and the transport links, schools and GP surgeries their communities need.”
“It will also speed up delivery and put an end to lengthy negotiations with developers seeking to shirk their responsibility to provide for local people.”
Stopping Developers from Dodging Their Duties
The new levy guarantees at least the same level of affordable housing as current rules, thanks to the ‘right to require’. Councils can now mandate exactly how much affordable housing must be built on-site versus how much cash is allocated for other local infrastructure.
This rule will cut out the drawn-out haggling with developers trying to reduce their obligations, speeding up the whole process with legally binding requirements.
The levy will be rolled out gradually over 10 years through a ‘test and learn’ phase in a handful of councils. This cautious approach aims to perfect the system before a nationwide launch, ensuring it delivers real results.
More Government Moves to Boost Infrastructure and Environment
Today’s announcement comes days after the Government revealed a fresh plan to speed up major infrastructure projects like transport and offshore wind farms.
Alongside the levy consultation, the Government also published a new Environmental Outcomes Report. This aims to replace complex EU environmental rules with a streamlined UK system that protects the environment while cutting red tape.
The new approach promises to uphold strong environmental protections and focus assessments on what truly matters, easing the burden on developers and councils alike.
