MPs have called on the Government to reform developer levies to make sure investment goes into the New Towns programme, local services and affordable housing.
The Housing, Communities and Local Government (HCLG) Committee said the current land value capture system was not delivering enough funding for local communities.
The Committee’s report raised concerns about the Government’s ability to meet its 1.5 million new homes target.
MPs pointed to a cut in London’s affordable housing target and delays to the long-term housing strategy, which they said had left industry in the dark, without a clear sense of the trajectory of housing supply, and without an overarching plan as to how such an ambitious target will be achieved.
Florence Eshalomi, Chair of the HCLG Committee, said: “Fixing the housing crisis and meeting the 1.5 million new homes target requires the Government to pull all the levers at its disposal.
“The Government should immediately pursue reforms to land value capture to ensure developers make fair contributions towards the infrastructure and affordable housing which communities rightly expect.
“We need more homes, but we need homes that are affordable.”
Eshalomi added: “Any proposed changes to land value capture measures, such as the Community Infrastructure Levy, should be able to answer the crucial question of how it will increase the number of affordable homes available, alongside vital infrastructure.
“We are in a housing crisis, and I want to see the Government bring forward the delayed Long-Term Housing Strategy to set out the comprehensive range of policies needed to address the slow pace of housing delivery and ensure 1.5 million homes are built in this Parliament.
“The Government must not lose sight of the need for the infrastructure which residents expect in high-quality new developments, and developers must continue to make a fair contribution towards this.”
The report noted that all local authorities in England should set a minimum percentage target for affordable housing in their local plan, with a fast-track planning route for developments that meet this target.
For New Towns, it recommended that development corporations should prioritise homes for social rent within the 40% affordable homes requirement.
MPs recommended the Government bring in new template clauses for Section 106 agreements to keep negotiations focused on site-specific factors, and to reinstate funded Level 7 planning apprenticeships for students over 21.
Additionally, the report said a statutory dispute resolution scheme should be set up to resolve deadlocked negotiations between local authorities and developers.
It also stated that updated land value estimates data should be published, as the last update was in August 2020.
The Committee noted the Government had not yet set out where the billions needed for New Towns would come from.
MPs said the chancellor should use the next budget to announce new funding for development corporations and allow land acquisition on the first New Town sites by spring 2026.
The report also highlighted concerns over the Government’s approach to shortlisting New Town locations, after detailed maps were published without planning policies to protect land value, which could let speculative developers profiteer and threaten the New Towns programme.
