Supplementary memorandum by the Local
Government Association (LGA) (LGF 01(a))
1. There is insufficient money in the public
purse to deliver the infrastructure needed for large scale development
and to respond to the cumulative pressures created by smaller
scale development. We need to develop new ways to help span the
gap, including by creating predictable local income streams to
unlock investment and by extracting greater value from land price
gains associated with new development, to reinvest in infrastructure.
2. We need a system that encourages long
term investment and partnership. Land needs to bear more of the
cost of its development and the supporting infrastructure needed
to make development successful. We need local communities to see
that development sustains their services, provides their infrastructure
and is a key to enhancing their quality of life. The Barker Review
of Housing Supply recognised this as an important point.
3. There are signs that local authorities
are already working the current system to the limits, working
with in a range of new delivery vehicles. They are developing
a range of approaches to unlock the development potential of their
strategic sites that will contribute to sustainable communities'
delivery. The LGA's report on "the role of delivery vehicles
in creating sustainable communities", published in January
2005, shows how local authorities are making practical arrangements
to deliver infrastructure. This is attached for information.
4. The LGA set out some other potential
mechanisms in its report of March 2004, "New Development
and New Opportunities". This report helped to generate
a great deal of debate because it said that we must look creatively
at the financial and legal rules under which local authorities
operate to encourage their innovation and ambition to develop
the right approaches to unlock the value in strategic development
sites. This is attached for information.
5. We think that the long term solution
lies in creating a more effective distribution of taxes and income
generated by development and related economic activity. More of
these should flow directly to local authorities so that resources
are in place for a timely and certain response to the infrastructure
requirements arising from development.
6. Apart from addressing strategic infrastructure
needs by financially empowering local communities to more effectively
meet their needs, the LGA thinks that in parallel, greater account
needs to be taken of local strategies that provide the framework
for expenditure on key infrastructure, housing and services. The
LGA has recently published a joint report with the Chartered Institute
of Housing that makes a strong case for building up regional funding
priorities from the local level, and getting longer term funding
commitments down to local authorities to implement them. The report,
"Visionary Leadership in Housing", is attached
for information.
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