Infrastructure adviser to explore land value capture mechanisms

The government's infrastructure adviser's first draft infrastructure assessment reveals that the body is to explore developing new mechanisms to capture land value uplift, and urges 'some degree' of high-density development around infrastructure hubs in the green belt.

High-density development: adviser says co-location can decrease pressure on transport network (picture: Giulio Jiang, Flickr)
High-density development: adviser says co-location can decrease pressure on transport network (picture: Giulio Jiang, Flickr)

The National Infrastructure Commission (NIC)’s interim national infrastructure assessment, published today, says that land value capture is not a "panacea to pay for all infrastructure needs".

But the document adds that land value capture "may be able to play a role in ensuring a fairer distribution of the costs of infrastructure between general taxpayers and property owners who receive windfall gains".

It adds: "It could also help ensure that the infrastructure needs of London and the South East - where land value uplift can make a more significant contribution to costs - are less directly in competition for national funding with the needs of other parts of the country."

The draft assessment calls for views on how section 106 and the Community Infrastructure Levy regimes can be improved to capture land and property value uplift efficiently and help fund infrastructure.

Elsewhere, the interim assessment - which will feed into the NIC’s 2018 National Infrastructure Assessment (NIA) - describes housing as the "greatest infrastructure capacity challenge of all".

The NIA, due for publication next spring, will analyse the UK’s long-term economic infrastructure needs, outline a strategic vision over the next 30 years and set out recommendations for how identified needs should be met.

The interim assessment identifies "supporting delivery of new homes" as one of seven priority areas in which it believes "current plans and policy frameworks fall well short of what will be required if the UK is to have the infrastructure it needs to support its long-term prosperity and quality of life".

Currently, the interim assessment says, the provision of the infrastructure necessary to unlock new housing "is too often not funded, timed or delivered in a way that facilitates or expedites housing delivery".

The interim assessment suggests that densification around urban infrastructure hubs, "notably bus or railway exchanges or near city centres, could help to provide much needed homes in high demand and desirable locations".

Such densification, it says, could in high demand areas help meet housing need and enable people to live closer to where they would like to work, releasing pressure on the transport network.

"In exceptional cases, this co-location could warrant some degree of development around infrastructure hubs in the green belt, where that allows for new housing in an optimal infrastructure location and is not inconsistent with the planning purposes of the green belt," the interim assessment says.

The document also says that maximising the opportunities for infrastructure to support housing growth and vice versa will require "better coordination in planning processes" and "strategic spatial coordination". "Metro mayors and devolution deals offer the chance to capture the benefits of the city-region spatial planning level, which is necessary to design infrastructure intelligently and join different housing markets and economic areas".

The interim assessment says that the need to address the UK’s "weakness" in infrastructure planning is "widely recognised", describing policy-making as "erratic". "Too often, a short-term view, often driven by political considerations, has prevailed or crucial interactions between sectors have been ignored," it says.

The report describes the delay in the planning of new national airport capacity as the "most egregious failure of all". "Thirteen years after a statement of state policy for the construction of a third runway at the UK’s principal hub airport, Heathrow, parliamentary consent to proceed has still not been given."

NIC chairman Lord Adonis said: "We have a proud history in this country of delivering world-class infrastructure – but for years funding has been squeezed, policy decisions have been erratic and the network is showing signs of age and strain.

"The endless delay to a Parliamentary decision on Heathrow is a case in point – and perhaps the most serious infrastructure failure of all. If we are to make the most of our economic potential and compete globally, we need the ‘Heathrow is full’ sign to come down."

The interim assessment is available here.

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