The Local Government Association (LGA) has made a statement today suggesting that government proposals to exempt small building sites from paying ‘section 106’ contributions would have cost 30,000 affordable homes over the last 5 years.
These claims are fundamentally flawed. They take a short-term Covid-19 support package for smaller developers and apply it over the last five years, resulting in a figure that is not relevant to what we are proposing.
Firstly, our proposal is to exempt small sites from ‘section 106’ for an 18 month period to help developers, particularly smaller developers, through the pandemic and the economic uncertainty it has created.
The 2007-09 financial crisis had a devastating effect on smaller developers, with the industry losing a third of companies during the crisis. 30 years ago, small builders were responsible for 40% of new build homes, compared to 12% today.
We’re working to ensure this doesn’t happen again and we want smaller developers to play a key role in getting the country building to drive our economic recovery and provide much-needed new homes for families across the country.
That’s why we’ve proposed a temporary exemption, helping these firms through the pandemic so they can help to deliver more homes – including affordable homes – for years to come. Contributions to local infrastructure will continue.
Secondly, the LGA’s analysis completely ignores the wider measures we’ve proposed to improve the planning system and deliver more affordable homes.
The new infrastructure levy proposed in our Planning for the Future reforms will deliver at least as much affordable housing as today – and to suggest otherwise is simply misleading.
Furthermore, last month we announced the details of our new £11.5 billion Affordable Homes Programme – the biggest funding commitment for affordable housing in a decade.
In the coming years, this will provide up to 180,000 new genuinely affordable homes across the country, should economic conditions allow – and these economic conditions will be helped if we can secure the future of our smaller developers.
The government is committed to affordable housing, having delivered more than 486,000 new affordable homes, including more than 142,000 for social rent, since 2010.
By helping smaller developers through the pandemic, we can help to deliver even more in the years to come.