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Developer contributions to be made simpler, says Malthouse

Words: Laura Edgar
Kit Malthouse / Chris McAndrew

Housing minister Kit Malthouse has announced changes to developer contributions to make the system simpler and accelerate the pace of homebuilding.

Builders pay through developer contributions (section 106 and Community Infrastructure Levy [CIL]) for the roads, schools, GP surgeries and parkland needed to help areas to cope with new residents.

But Malthouse said these measures are “confusing and unnecessarily over-complicated”. The new rules mean that communities would know exactly how much developers are paying for infrastructure in their area, he explained.

Councils will be required to report the deals done with developers and set how the money will be spent, so residents can see every step taken to make sure thattheir area is ready for new housing.

The changes are also intended to help developers get “shovels in the ground” more quickly, said the government, as it looks to meet its target of delivering 300,000 homes a year by the mid-2020s.

Malthouse said: “Communities deserve to know whether their council is fighting their corner with developers – getting more cash to local services so they can cope with the new homes built.

“The reforms not only ensure developers and councils don’t shirk their responsibilities, allowing residents to hold them to account – but also free up councillors to fund bigger and more complicated projects over the line.

“The certainty and less needless complexity will lead to quicker decisions – just another way we’re succeeding in meeting our ambition of building 300,000 homes a year by the mid-2020s.”

The government said the measures would also make it faster for councils to introduce the CIL in the first place, while restrictions would be eased to allow councils to fund single, larger infrastructure projects from the cash received from multiple developments.

Alex Ground, planning lawyer and partner in the Real Estate team at law firm Russell-Cooke, said: “The proposed changes require new reporting procedures, but councils are given the ability to recover those costs and they should help local communities see the benefits that new development can bring – therefore making them less opposed to new development in principle with objections focused just on specific identified harm. The information on section 106 contributions is already publicly available but difficult to obtain, and I think the new reporting requirements will help with the buy-in from locals.

"Overall, therefore, the reforms should be helpful to the delivery of more homes.”

Image credit | Chris McAndrew