Westminster Council and the Westminster Property Association have called for a change in the rules around Community Infrastructure Levy payments so councils can use the funds to invest in affordable housing ahead of today’s Spending Review.
In a letter seen by Estates Gazette, Adam Hug, leader of Westminster Council, and James Raynor (pictured), the chair of the WPA, have urged housing minister Matthew Pennycook to loosen rules to enable local authorities to access CIL funds paid by developers.
They wrote: “If local authorities were given a mechanism to unlock funds, it would enable a greater number of residents to benefit from the area’s commercial activity, which could be transformative, without jeopardising development deliverability.”
The letter highlights Westminster’s commercial productivity, which generates £94bn GVA annually as well as £2bn in business rates – the largest amount in the country.
It said, however, that residents often feel “locked out” of Westminster’s success, since homes in Westminster are “among the most expensive in the country and the shortage of affordable homes particularly acute”.
CIL payments are charges imposed by local authorities on new developments to help fund local infrastructure, such as schools, transport or local spaces. CIL payments cannot, however, cannot be used to invest in affordable housing.
Changing this would enable local authorities to tap into nearly £2bn of CIL, according to the research by the Home Builders Federation. Its research found that an average of £11.4m of CIL contributions are held per council, a total of around £1.8bn.
“By updating CIL regulations and improving the process,” Hug and Raynor added, “the government can provide councils with the tools to foster thriving, sustainable communities and address the housing crisis head-on.”
The Ministry for Housing, Communities and Local Government has not responded to a request for comment.
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