About the RTPI
The Royal Town Planning Institute (RTPI) champions the power of planning in creating sustainable, prosperous places and vibrant communities. We have over 27,000 members in the private, public, academic and voluntary sectors. Using our expertise and research we bring evidence and thought leadership to shape planning policies and thinking, putting the profession at the heart of society's big debates. We set the standards of planning education and professional behaviour that give our members, wherever they work in the world, a unique ability to meet complex economic, social environmental and cultural challenges.
1. How effective and efficient are current mechanisms of land value capture in England?
Since the establishment of the current CIL/s106 system in England, significant funds have been raised, predominantly for affordable housing from residential developments. The main focus of existing instruments is to collect development value however and they have been less successful at capturing land value that arise from greater prosperity or new infrastructure investment, such as large-scale transport infrastructure. Regional variation has also been significant with areas of high land values and strong market demand having proved more successful in drawing in significant funds. Areas of lower land value and less market demand have had particular challenges in levying CIL contributions. This has created difficulties in attempting to make LVC scalable nationally across a full range of sites. Beyond this, research has revealed that there is significant variation in approaches to planning obligation policy and practice across local authorities in comparable market conditions, which can create uncertainty for developers working across different areas[1].
2. What alternative methods of land value capture might be most suitable for England?
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Would alternative mechanisms of land value capture deliver more affordable housing and public infrastructure than the current section 106/Community Infrastructure Levy regime?
Any review of LVC should make development more popular, increase the quality of new development, and improve infrastructure for nearby existing residents. The RTPI wish to see focus directed towards improving current methods of land value capture through careful alteration, refinement and effective resourcing of the existing CIL/s106 system. This could include, for example, the exploration of how to better engage a broader range of development types under the s106 and/or CIL regime, such as purpose-built student housing, large retail and warehousing. RTPI also notes the potential expanded role of Mayoral CIL through the emerging Strategic Development Strategies and the devolution agenda[2].
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How could the benefits of alternative mechanisms of land value capture be realised across England, including regions with lower average land values?
No comment.
3. What are the economic and practical opportunities and challenges of pursuing land value capture policies in England?
The RTPI also recognises that CIL/s106 negotiations can add significant delay and complexity to the planning process, particularly with regards to development viability which can be dependent on a range of factors including construction costs and additional policy asks. Resultingly the CIL/s106 system has manifested as a significant resource burden for planning authorities. This is particular important given the context of significant cuts to planning departments with our State of Profession 2023 report has highlighted a contraction of public spending on planning of 16% between 2009 and 2022[3]. These findings are supported by the recent publication of Local Authority Planning Capacity and Skills Survey 2023 from MHCLG which identified around three in four planning departments reporting significant barriers to resourcing. This survey also identified specific issues relating to planning obligations with local authorities reporting bottlenecks in the capacity of their legal teams and nearly half of authorities reporting CIL, S106 and viability assessment as an area of significant skills gap. This may partially explain the inconsistent application of CIL/S106 across the country and the RTPI has called on Government to publish a long-term skills and capacity strategy as a means of addressing such issues[4].
4. What mechanisms of land value capture have been effective internationally?
In many European countries, proactive planning and land assembly by empowered local authorities has helped better join up housing and infrastructure. However great care needs taken when transposing such policy and practice ideas into the English system, given the very different legal and administrative context. The work published by CACHE on land value highlighted some success in Germany and the Netherlands through temporary forms of land banking1.
5. Should reforms to land value capture be pursued through changes to the current section 106/Community Infrastructure Levy regime, or by introducing a new mechanism?
See response to Q2.
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What changes to planning law and guidance would be needed to introduce a new mechanism of land value capture?
See response to Q2.
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Would new methods of land value capture be compatible with human rights legislation, regarding property rights?
See response to Q2.
6. How could different mechanisms of land value capture complement the Government’s ongoing planning reform agenda, including delivery of New Towns and the release of ‘grey belt’ land for development?
No comment.
7. Overall, would reforming land value capture support or distract from the Government’s target of delivering 1.5 million new homes by the end of this Parliament?
The RTPI believes that a wholesale reform at this current time could hinder the ability of the private sector to meet the Government’s ambitious house targets. Focus instead should be centred on reform of CIL/s106 regimes to make them simpler and more flexible. The current model makes affordable housing dependent on developer contributions and unfairly disadvantages local authorities in weaker markets or without negotiating experience. Therefore critically, funding needs to be made for affordable housing directly rather than solely expecting the private sector to finance and deliver it. This should be addressed through the preparation a new, long-term and ambitious Affordable Homes Programme in the Governments next Spending Review. The private sector should however, for practical reasons, still provide a portion of sites to affordable housing delivery bodies to secure mixed tenure and to ensure land acquisition is not a barrier to delivery.
[1] UK Collaborative Centre for Housing Evidence. Capturing Increase in Land Value (2020)
[2] Devolution Priority Programme consultations launch - GOV.UK
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