By Colin Wiles, housing consultant.

According to the Daily Telegraph, Michael Gove is about to pave the way for a massive expansion of council housing.

This is a story that seems to be confined to the Conservatives’ favourite paper, but the Telegraph has itself been calling for a massive council housebuilding programme as a way to appease Red Wall voters, so there might be some substance to this story, if only we could cut through the hype.

The Telegraph report says Gove wants to put something in next month’s Queen’s Speech to the effect that section 106 and the Community Infrastructure Levy will be replaced by a new “consolidated infrastructure levy” that could raise £7bn annually for councils to spend on housing and other projects.

That’s a sum three-times larger than the Affordable Homes Programme, so if only a third to a half is spent on housing it’s still a big deal.

The usual caveats apply, of course.

For instance, we all know that councils routinely spend section 106 and Community Infrastructure monies on things other than housing. Conservative authorities are notoriously reluctant to invest in new homes, conscious of the protests that erupt every time any greenfield site is slated for housing.

The notion of a single unified levy was first mooted in Robert Jenrick’s 2020 Planning White Paper, then abandoned, but there’s a strong case to be made for reforming the present system, which is complex, over-bureaucratic and subject to abuse.

The problems with section 106 are well known, ranging from poor doors, tenants being excluded from facilities enjoyed by owners, affordable housing being clearly identified as the “grotty stuff at the bad end of the site” and so on.

Also, for housing providers, managing bits and pieces of homes in random locations, often miles from any facilities, makes no sense at all, especially when you consider that owners often have the benefit of one or more cars whereas social housing tenants are more likely to be reliant upon public transport

(However, I do recall being involved in the housing market package in 1993 when many applicants had a preference for Barratt boxes over ex-council houses, even though the former were often poky and ill-designed. The stigma of ex-council estates was pervasive back then.)

The Community Infrastructure Levy, which works alongside section 106, also has many flaws. When it started in 2010 it was meant to be fairer and faster than section 106, but only around a third of councils have adopted it, and the rules are Byzantine.

It’s calculated according to net additional floorspace within any scheme and councils set a square metre levy that can vary according to the type of development and the location within their council areas. The scheme in my old Borough of Camden can be seen here – it’s complex and open to interpretation and argument.

The Mayor of London also charges on top of this, so the complication is doubled. An additional problem is that the scheme is set in concrete, so when land or property values go up or down the CIL is still set in stone and the developer pays proportionately more or less than they would’ve done when the scheme was first agreed, leading to more arguments and re-negotiation.

In 2018, CIL raised £457m in England, so it’s not insignificant, but well below the £7bn proposed in Gove’s scheme.

The key principle of a unified Infrastructure levy would be to capture the uplift in value that planning permission gives to the site.

A much simpler system would be a before and after valuation, carried out by an independent valuer, to levy a tax on the uplift in value as a result of planning permission being granted, either based on land values before and after (e.g. from agricultural land to housing land), or, for redevelopment sites, a before and after property value.

Is there any reason why this could not be done through the government’s Valuation Office Agency?

As for affordable housing, the need has never been greater. In the 1950s councils were routinely building 150,000 homes a year. In the past ten years this has averaged around 1,400 a year.

Given all the recent ITV exposés of awful conditions in social housing, most but not all in housing association properties, is there a strong case to be made for a return to mass council house building – all located within a single administrative boundary and under the direct control of elected councillors? I could certainly argue that case.

Of course, if housing was finally recognised as infrastructure, the case for committing a greater proportion to housing would be stronger.

There’s a sound Conservative tradition that would justify this approach. It’s worth remembering that the Conservative manifesto in the 1951 election stated:

Housing is the first of the social services. It is also one of the keys to increased productivity. Work, family life, health and education are all undermined by crowded houses. Therefore, a Conservative and Unionist Government will give housing a priority second only to national defence.

Harold Macmillan, who was appointed housing minister in 1951, treated it as a “war job” and pledged to build 300,000 homes a year. He more than achieved that, with almost 264,000 being built in 1953 England alone, of which a whopping 198,000 (three quarters) were council houses.

The precedent is there, and, of course, Supermac went on to become Prime Minister in January 1957, having done so well at the housing brief. Perhaps Gove fancies himself as a latter-day Harold Macmillan.

In politics, stranger things have happened.