Infrastructure tax possible for all new homes

THE prospect of a tax on every new home built, rather than getting infrastructure contributions just from major developments, is being explored by Cambridgeshire Horizons, the not-for-profit company set up to deliver the infrastructure associated with 50,

THE prospect of a tax on every new home built, rather than getting infrastructure contributions just from major developments, is being explored by Cambridgeshire Horizons, the not-for-profit company set up to deliver the infrastructure associated with 50,000 new homes in the Cambridge sub-region by 2021.

Horizons has calculated the total infrastructure cost at £4billion over that period, but the source of some of the funding has not yet been identified.

Alex Plant, the company's new chief executive, told its annual conference on Friday that the shortfall after cash contributed by developers, taxpayers and others was around £764million.

In an only-slightly coded shot across the bows of Cambridgeshire County Council, he said the deficit would increase to £1.26billion if it did not press ahead with its bid for just over £500million from the Government to provide transport improvements in advance of the introduction of a congestion-charging regime in Cambridge city.


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"Whatever the ultimate choice is for Cambridgeshire, we need some combination of sticks and carrots to restrict demand whilst putting in major investment up-front to make alternative (and lower carbon) transport solutions more attractive."

He added: "We must also find ways to provide the funding for the necessary infrastructure up-front, rather than having to wait until the houses are sold until collecting the developer contributions," he told the 200-plus conference delegates.

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"That is why we are so pleased to have received £8million from the Government in January, to make a start on our 'rolling fund' concept, investing in major schemes up-front, then replenishing the fund from developer contributions later. We are now pressing Government to go beyond that useful start and give us the critical mass we need if the fund is to be truly 'rolling'.

"One area where I hope we can make progress over the coming months is in taking forward options for a tariff on development in Cambridgeshire, so that every new home contributes something to the infrastructure needs of the area - rather than the current situation where many developments, particularly smaller developments, do not.

"Such a system can reduce the amount of time spent in negotiations and provide a more stable and reliable income flow, which in turn can make borrowing easier."

Mr Plant said he had been encouraged by Ministers' reaction to the possibility of 'tax increment financing' which had been spectacularly successful in the US. It would mean councils, against the expectation of revenue flows from local taxation, usually property taxation, would issue a bond for a significant amount of money, to be repaid over something like a 25-year period.

He said there was no conflict between economic growth and environmental protection, as both the recent Stern and Eddington reports had stressed.

"The scale of growth in this part of the country means we are at the forefront of the debate. Environmentally, growth is both a threat and an opportunity. It is important that we manage the growth correctly through combining use of modern methods of construction for homes and other buildings, adopting transport and planning policies that reduce car use, and taking different approaches to the provision of energy and imaginative water management schemes," he explained.

"All of these can significantly reduce the carbon footprint of new communities, making them better places to live and work. But we also have an opportunity to use the growth agenda to trial some innovative approaches that can then be applied to the much bigger problem of reducing emissions from the existing homes and from transport choices made by the existing population.

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