Planning and Infrastructure Bill

Baroness Thornhill Excerpts

Committee stage
Tuesday 9th September 2025 Lords Chamber

[Lord Best (CB)]

My Lords, I rise with some trepidation after that terrific debate on green spaces to speak to Amendment 122, together with Amendments 141 and 151, all of which address the issue of affordable housing delivery.

Amendment 122 introduces a free-standing new clause which provides for regulations to ensure that affordable housing gets delivered where it is a condition of planning consent, usually through a so-called Section 106 agreement. We are all only too familiar with the problem that affordable homes for local people are expected from new development but fail to materialise. With the excuse of viability, housebuilders back out of delivering all or most of the affordable homes that they promised. They say they have discovered site conditions they had not expected or have encountered problems with subcontractors or higher interest rates or building costs or something else, and now they may not be able to make a 20% profit from the development.

They insist that it is the affordable housing element that must take the hit. Despite affordable housing being a condition of planning consent, precious few such homes may appear. The price that the housebuilder pays for the land should reflect their obligations to provide affordable housing and related infrastructure. It should never be acceptable to claim: “We had to pay so much for the land that now we cannot honour our agreement to build the affordable homes”. The Government’s planning practice guidance explicitly states:

“Under no circumstances will the price paid for land be relevant justification for failing to accord with relevant policies”,


yet this continues to be exactly what happens.

The amendment recognises that the level of affordable housing in every development, the Section 106 agreement, is subject to complex negotiation between two unequal parties—the local planning department and the housebuilder. As a report from the National Audit Office set out in June of this year, there is a serious imbalance between these two, with local planning authorities being hopelessly under-resourced while large developers can employ expensive consultants and legal experts to find ways of negotiating their contributions down.

The Government, commendably, are finding ways of better resourcing local planning authorities. This amendment would add support for planners by cutting down on the imbalanced and interminable arguing over affordable housing numbers. The affordable housing element would become non-negotiable. Amendment 121 would empower the Secretary of State to ensure that developers deliver the affordable homes that were a condition of planning consent. The amendment would add a further detail by obliging the housebuilder to provide a minimum of 20% of the homes for social rent or the percentage that is set out in the local planning authority’s policy framework if that is higher. The definition of social rent housing is that used by the Regulator of Social Housing in its rent standard.

How important is this contribution by the house- builders to affordable housing? Over recent years, the obligations on the housebuilders have produced nearly half, 44% last year, of the total programme of affordable homes. However, according to the National Audit Office, the value of the contributions from developers for both infrastructure and affordable housing fell from £6.4 billion to £5.5 billion last year. We cannot afford for this vital programme of affordable homes, funded by developer contributions, to be depleted by housebuilders reneging on their planning obligations.

Amendment 122 keeps it simple. It dismisses the specious arguments about what is viable and what is profitable. It would require straightforward fulfilment of the planning obligations accepted by housebuilders, which have too often escaped their responsibilities and have reduced or scrapped the quota of social homes that they were obligated to deliver. It would introduce a baseline of 20% of new homes for social rent in all relevant developments. I know that the Minister recognises the problem which this amendment seeks to address. I hope that she will find it acceptable.

Amendments 141 and 151 are also in my name and again supported by the noble Baroness, Lady Thornhill, and the noble Lords, Lord Young and Lord Carlile, whom I thank. These two amendments go together and back up my earlier amendment. While the earlier amendment is just about developer contributions to providing affordable homes, these two amendments relate to all developments that will be covered by the spatial development strategies outlined by the Bill. Amendment 141 expands on the Bill’s current wording, which stipulates that spatial development strategies can specify or describe the amount of affordable housing, as well as other kinds of housing. This amendment spells out that the affordable housing should be mostly for social rent rather than, for example, shared ownership or middle-market renting.

Amendment 151 defines social rent as in Amendment 122, stating that social rent is the accommodation rented according to the rent standard specified by the Regulator of Social Housing. This is the rent level that applies to most existing council and housing association properties. It is based on a measurement that combines earnings data with property values. It represents the form of affordable housing, which helps those on average incomes or less. Using the common definition that rents are only affordable if they absorb one-third or less of the incomes of the occupiers, the current arrangements are producing pathetically small numbers of new homes for those in the bottom half of the income distribution. If the 1.5 million new homes planned for the course of this Parliament were to contain a quantum of social rented homes similar to the current arrangements, then as little as 8% of all the new homes would be affordable to those on, or below, average incomes. This does not sound like a very fair distribution of all the new homes that we are planning to build.

Fortunately, the Government are determined to see more social rented housing created. This amendment chimes with that intention. The Government have stated that, of the 300,000 affordable homes a year to be funded by the spending review’s £39 billion for Homes England to provide its social and affordable homes programme, 180,000 homes—60% of the affordable homes—should be for social rent. If achieved, this would represent a significant rise in the proportion of homes that are genuinely affordable.

Amendments 141 and 142 would greatly improve the Government’s chances of delivering this outcome. Amendment 141 would establish that a majority of the affordable housing within each spatial development strategy must be for social rent, defined by Amendment 151. This requirement would cover affordable homes in the publicly subsidised housing programme, as well as those affordable homes that are built by the house- builders in fulfilment of their planning obligations.

The amendments accord with the Government’s ambitions and give greater relevance to the new spatial development strategies. They would ensure that a meaningful proportion of the 1.5 million new homes will be for those in that half of the population who cannot otherwise afford a decent home. I know that the Minister will be sympathetic to these amendments. I beg to move.

[Baroness Thornhill (LD)]

My Lords, I will speak to my Amendments 137 and 171 and give wholehearted support to the amendments so eloquently and coherently proposed by the noble Lord, Lord Best, which I and other noble Lords have signed.

It is interesting that this group of amendments demonstrates all too clearly the overwhelming need for many more homes for social rent. It is deeply troubling that the number of homes in that category being built has fallen significantly—despite the Government’s stated ambition to tackle the housing crisis and for a significant amount of those homes to be for social rent. We all know that social housing provides stability, dignity and opportunity for those who are in most need. Yet year after year we see promises outstripped by reality, leaving rising numbers of families trapped in temporary or unsuitable accommodation. Currently, there are 130,000 families, which have 169,000 children within them, in that accommodation. I regard it as a national scandal.

Following welcome funding announcements from the Government, the main issues genuinely now appear to be delivery and affordability, which are both deep and entrenched problems. In a small way, the amendments in this group seek to be part of the solution. Without urgent action on both fronts, all our aspirations remain little more than warm words while communities across the country continue to feel the harsh consequences of inaction.

--- Later in debate ---

[Lord Carlile of Berriew (CB)]

My Lords, I share the aspiration that we should build sufficient affordable housing in order to house those who need it. I do not propose to repeat what has been said in the three excellent speeches we have heard so far in this debate. I want to turn to a particular issue, with which I hope that the Minister who replies will agree.

One of the ways in which we ensure that affordable housing is built in sufficient numbers is to ensure that the contractual relationship between builders and the councils that give them planning permission is a fair one and does not give undue advantage to the contractors. It has not always been the case that that is so; indeed, there are very recent examples, and I will refer to one very major one.

Some years ago, one of the things I did in my legal life was act as a part-time chair of the Competition Appeal Tribunal, the UK’s anti-trust court. One of the cases on which I sat and gave judgment was a case in which a number of household-name builders had entered into cartel arrangements in order that it was ensured that one of them would win each contract. It was so endemic in the building system that an academic, who I will not name, from a respectable university, which I will not name, wrote a book on how to enter into these cartel arrangements. He did not do the builders much good, because the tribunal which I was chairing fined them a very large amount of money, each related to their world turnover.

They have not learned their lesson from that Competition Appeal Tribunal case. This year, a group of the largest housebuilders in the UK have agreed to a series of legally binding commitments to ensure that they are acting lawfully and to prevent anti-competitive behaviour. They have done that following an investigation by the Competition and Markets Authority—the CMA. I should say to your Lordships that the CMA took a very pragmatic view and did not make a finding that they had been cartelists. I will leave it to your Lordships’ judgment as to whether that was the case or not, under the parliamentary privilege that I have, by telling you what the housebuilders have agreed to.

They made the following commitments to the CMA. The first was not to share competitively sensitive information with competitors, specifically including the prices for which houses are to be sold. If you are a builder, you do not need to make an agreement with the CMA to know that you should not share competitively sensitive information in a competitive contract situation. They then agreed to support the Home Builders Federation and Homes for Scotland to produce guidance on information exchange for the housebuilding industry. Ditto what I said about the first commitment. They further agreed—I am very pleased that they did—to pay £100 million in aggregate to programmes supporting the construction of affordable housing in the UK. Somebody will have done a calculation of how much they had gained from their anti-competitive agreements, and I have no doubt that the £100 million was a conservative—with a small “c”—estimate of the gain that they had made. Then they decided, generously, to introduce enhanced in-house compliance measures and training programmes, no doubt to deal with corruption among individuals within the industry.

Given that case and the one I mentioned earlier, surely one of the most important things—I am sure that the Government will agree with this—is that we should be alive to the risks of corruption in the building industry, so that housing is built without giving the housebuilders money which they do not deserve and have not earned legitimately.

[Baroness Thornhill (LD)]

I have a meeting with them next week; perhaps the noble Lord, Lord Carlile, would like to join me.

[Lord Carlile of Berriew (CB)]

I thank the noble Baroness for the invitation but, looking at the parliamentary programme for next week, I suspect that I am going to be here for about 11 hours a day.