Government lacks the “vison and urgency” to engage with land value capture despite recognising the scope to do so, as outlined in an HCLG committee report.
Committee chair Clive Betts said: “Overall, this seems a wasted opportunity by the government to use the Committee’s reflective report to engage with, and open up, the debate on this issue.”
Betts did, however, acknowledge as “pleasing” government recognition of the scope to capture a higher proportion of land value increase.
“Yet there is a distinct lack of vision and urgency in how it would be achieved beyond existing mechanisms,” said Betts.
“The current system allows landowners to make substantial profits from the increases in land value that arise from public policy decisions. It is only right that a significant proportion of these profits should be shared with local communities,” he said.
Government statistics show that agricultural land, which is granted planning permission for residential use, would, on average, increase in value from £21,000 per hectare to £1.95m per hectare.
The Committee’s report made the case for local authorities and central government to capture a ‘significant proportion’ of this uplift in value to invest in new infrastructure and public services.
Recommendations from the committee included:
- Reform of the Land Compensation Act 1961 to give local authorities the power to purchase land at a fairer price
- Further simplification of the CPO process, to make it faster and less expensive for local authorities, while not losing safeguards for those affected
- Reform of the Community Infrastructure Levy (CIL) to remove complexity and the extensive range of exemptions that currently limit its effectiveness
- More resources for local authorities to ensure they are able to negotiate robustly with developers to secure the appropriate level of planning obligations
- Securing the maximum value for new infrastructure and public services from public land put forward from residential development, with much to be learned from Germany and the Netherlands in this respect
“We have seen the success of similar policies in the past, notably with the creation of New Towns, and they can be a vital pillar in creating new housing projects we so badly need,” said Betts.
“We are not alone in our view – Shelter, the Local Government Association, the County Councils Network, and the Centre for Progressive Policy have all called for reform.
“We urge the government to revisit the issue and bring out proposals that will make a real difference,” he said.
The government response is available here.