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UK government set to change Infrastructure Levy in line with ICE advice

Date
26 July 2022

Rounding up the latest policy and political engagement activities from ICE.

UK government set to change Infrastructure Levy in line with ICE advice
Section 106 agreements, which ensure developers carry out works - like funding a playground - as part of their major projects. Image credit: Pexels/Anete Lusina

The UK government has listened to ICE advice in its development of the new Levelling-up and Regeneration Bill.

The Planning For the Future (2020) White Paper planned to replace the current planning obligations system with a new Infrastructure Levy.

When the government first announced the Infrastructure Levy, the ICE was concerned that the approach might not be appropriate for nationally significant infrastructure projects.

The ICE’s evidence to the white paper reflected that the proposed Infrastructure Levy would be unable to mitigate the upfront effects on communities that these projects inevitably have.

Taking on board the ICE’s advice, Section 106 agreements will be retained in the new bill for major projects.

The bill has been published in the UK Parliament and is going through its committee stages.

What is Section 106?

Section 106 of the Town and Country Planning Act 1990 is a legal agreement between an applicant seeking planning permission and the local authority.

It requires developers to agree to make sure that certain extra works are done as part of a new development, to mitigate the impact of a new project in the area. 

The government had intended for the Community Infrastructure Levy and Section 106 to be scrapped and replaced with a single Infrastructure Levy.

This would have been paid out at the end of the project rather than upfront.

Almost all development has some impact on the need for infrastructure, services, and amenities.

These impacts can include building access roads for construction traffic or losing community open space.

Why does this matter?

If there is no upfront payment available to mitigate these effects of development, the investment would have to come from somewhere else, and projects could face a public backlash.

The government’s first version of the Infrastructure Levy would not have worked well for larger infrastructure projects because developer contributions currently play an important role in offsetting these adverse effects.

The government has listened to the ICE’s advice.

The bill outlines that Section 106 agreements will continue to have a role in supporting the delivery of the largest sites, and sites where infrastructure integral to the operation of a development needs to be provided.

This will ensure there is a provision of in-kind infrastructure, or funds to ensure the successful delivery of the project, which will be the same as what would have been secured under the Infrastructure Levy.

With the Conservative Party undertaking a leadership contest, the ICE will work with the government to ensure this stays through the future change in government.


UK shadow minister responds to the ICE’s recent policy position statement on levelling up

Alex Norris

Alex Norris MP, shadow levelling up minister

What did they say?

During an ICE Presidential Roundtable, Alex Norris MP, shadow levelling up minister, and other attendees discussed aligning levelling up with net zero, subnational leadership, and getting the scale right.

The discussion also looked at devolving more money to local government to level up.

This would see more decisions being taken locally based on local needs and interests. This is instead of having a one-size-fits-all model from central government.

The attendees also discussed how infrastructure can play its fullest role in addressing social equity.

When

ICE Presidential Roundtable, 29 June 2022.

Why this matters

This discussion came soon after ICE’s policy position statement in response to the government’s Levelling Up White Paper.

This policy position statement draws on evidence received from an ICE consultation earlier this year on the role of infrastructure in levelling up.

Our statement had five recommendations for infrastructure’s role in levelling up.

One of the ICE’s core functions is to provide independent policy expertise to parliamentarians from all parties.

We speak with all political parties about how they can use infrastructure strategically as part of their plans for government.

The Labour Party is currently Her Majesty’s Official Opposition and could form a government in the future.

  • Duncan Kenyon, public affairs manager at ICE