Levelling Up and Regeneration Bill receives Royal Assent

The Levelling Up and Regeneration Bill has officially become law. The Bill, which is now the Levelling Up and Regeneration Act, received Royal Assent on 26 October, making it an Act of Parliament.

The government describes the new laws as a way to “speed up the planning system, hold developers to account, cut bureaucracy, and encourage more councils to put in place plans to enable the building of new homes.” Since the Bill was first announced in 2022, the NHF has been working with the government, alongside our members, to understand what the changes it looks to implement will mean and how they might impact the sector.

What does the Levelling Up and Regeneration Act mean for housing associations?

The Infrastructure Levy

One of the main elements of the Levelling Up and Regeneration Act is the Infrastructure Levy, which introduces a new way of calculating developer contributions towards affordable housing and infrastructure – replacing current arrangements under Section 106. Ever since the Levy was first announced, we’ve voiced serious concerns that it risks a significant reduction in the delivery of affordable housing and homes for social rent through the planning system.

The NHF has been clear in our conversations with the government that the delivery of onsite affordable housing must be protected under any proposed plans and changes to legislation. Earlier this year, we wrote to the Secretary of State for Levelling Up, Housing and Communities, Michael Gove MP, on two separate occasions to express our concerns around the Levy and to urge the government to reconsider its plans. In our response to the technical consultation on the Infrastructure Levy, we continued to outline these concerns.

In July, the government listened to these calls when it tabled four amendments to the Levy which were in direct response to the concerns and recommendations we continued to raise in order to protect the delivery of onsite affordable housing. The four amendments will:

• Look to ensure that the Levy will be capable of delivering at least as much affordable housing as the existing system of developer contributions, requiring local authorities to seek to ensure “that the level of affordable housing which is funded, and provided by developers, and the amount of such funding, is maintained or exceeded.”
• Allow local authorities to require developers to pay a proportion of their Levy contributions in-kind as onsite affordable housing.
• Allow local authorities to revert to using Section 106 contributions should the Infrastructure Levy fail to deliver it’s aims, including for example, providing enough affordable housing in the area.
• Require the Secretary of State to publish a report on the impact of the Infrastructure Levy on the delivery of affordable housing.

As well as these amendments we were pleased that the government reaffirmed their commitment to a 10-year “test and learn” process. The NHF has called for this since the proposals were first published and we believe it is the only way to ensure that the Infrastructure Levy delivers on its policy aims.

Changes to planning policy

The Secretary of State has said that the Act will deliver “a faster and less bureaucratic planning system”, and discussions around planning dominated the debate around the Bill during its time in Parliament.

To meet this aim, the government proposed a number of changes to standardise the process for local plans, so that they are produced more quickly, simpler to use, more democratic, and as up to date as possible. The government consulted on proposals around plan-making reforms and in our response to the consultation, we called for a stronger and more explicit acknowledgement of the role played by housing associations as key partners, and for housing associations to be recognised as key stakeholders thus allowing them to be fully involved in local plan consultation periods. We also call for the inclusion of additional metrics which will help deliver effective local plans which meet the needs of their communities.

The government also proposed changes to the National Planning Policy Framework (NPPF), which sets out it’s planning policies for England and how these are expected to be applied. In our response to government’s consultation on these changes, we expressed concerns that some of the proposed changes will lead to a loss of affordable homes by weakening the requirement for local authorities to provide an adequate housing supply and making planning for development more vulnerable to political pressure.

We are awaiting the government’s response to both consultations.

Devolution

The Levelling Up & Regeneration Act formalises the government’s commitment to ‘address inequality through levelling up missions, which include strengthening devolution by ensuring every area in England that wants a devolution deal can have one by 2030’. As part of this commitment, the Act allows for the creation of a new form of combined authority, called a ‘Combined County Authority’, designed for areas with two tiers of local government (county and district councils). The first Combined County Authority proposal covers part of the East Midlands (Derbyshire and Nottinghamshire), with more likely to follow.  Housing associations already work collaboratively with existing mayors and combined authorities to deliver outcomes for local communities, and we will continue to support this approach as devolution progresses. 

What happens next?

Throughout its passage through Parliament, the NHF has continued to work alongside our members to ensure that the government has listened to any concerns raised by the sector and understood the impact that any changes to developer contributions and planning could have for housing associations.

We're grateful for the positive and constructive engagement we’ve had the government on the changes that the Levelling Up and Regeneration Act brings with it, and in addition we’ve also worked to engage the Labour Party front bench team. Their commitment to scrapping the Infrastructure Levy and reforming existing arrangements has enabled us to talk about what could be done to strengthen affordable housing delivery.

We will continue to work with the government, the opposition and our members to ensure any changes in policy will protect and strengthen the delivery of the affordable housing the country needs.