Senior government official plays down prospects of radical land value capture moves

A senior government official has played down the prospects of radical changes to capture more of the increases to land value generated by planning permissions and site allocations.

New development: further government moves to capture land value played down
New development: further government moves to capture land value played down

The 2017 Conservative manifesto promised to introduce reforms to capture the land value uplift that follows when land is earmarked for development. And last month a cross-party committee of MPs recommended a series of changes to ensure that the state secured a bigger slice of such uplift.

But yesterday, Ministry of Housing, Communities and Local Government (MHCLG) planning director Simon Gallagher told a conference that he did not expect any radical reforms in the near future.

Speaking at the British Institute of Agricultural Consultants' (BIAC's) national rural planning conference in Reading, he said that planning minister Kit Malthouse's "mantra of getting on with it" made major legislative action seem unlikely.

He said: "It tends to suggest to me that his discussion will be along the lines of 'let's pragmatically, incrementally reform', rather than go back to first principles, because it's very easy in this to go into big bits of primary legislation and further regulations, which are not going to happen in the next year or two".

He said the government's proposed changes to developer contributions, published alongside the draft National Planning Policy Framework (NPPF) earlier this year, were intended to bring "pragmatic" improvements to make the Community Infrastructure Levy and section 106 agreements more efficient and transparent. "I would suspect that is the space that we are going into," he added.

He said that the government would respond to the feedback it had received from the developer contributions consultation "very soon", and that it was likely to announce a further consultation. "I think there will be more consultation on this, because it's really important that we get this right," he said. "There are some really important technical issues which can have big issues at the margin - I want to get lots of engagement on that."

Gallagher's remarks follow planning minister Kit Malthouse's comments last month that the 1961 Land Compensation Act did not need to be amended in the way suggested by the House of Commons housing communities and local government select committee.

But, in an interview published in Planning last week, Malthouse also made clear that he wants to capture land value uplift to help finance new communities. "As I've said before, the art of land value capture is to pluck the goose with a minimum of hissing and what we don't want to do is to choke off activity," he said. "But I think everybody recognises the need to contribute towards the significant infrastructure payments that are going to be required, particularly for some of these large-scale developments."

This week, the government's adviser on infrastructure attempted to manage expectations about the level of funding that could realistically be raised through land value capture. The National Infrastructure Commission has called for councils' land value capture powers to be strengthened. But chief executive Phil Graham this week told the Planning for Housing conference, organised by Planning, that the idea that land value capture can provide a 'pot of gold at the end of the rainbow' to deliver new infrastructure and housing is misguided.

The Labour Party has also been exploring  the potential of new land value uplift capture measures to boost social housing provision. Also speaking at Planning for Housing, shadow planning minister Roberta Blackman-Woods said the party's new planning commission would continue the investigations.

"We do need a new system for capturing uplift in land value," she said. "But, just to be clear, we’re not wedded at the moment to a particular model".

She said the commission would examine the "possibility of a land value tax, amongst other other possible planning gain measures".


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