An In-Depth Analysis of the Levelling-Up and Regeneration Act 2023: Implications for Planning, Development, and Regional Equity in the United Kingdom

2025-07-06 Research Reports 1

Abstract

The Levelling-Up and Regeneration Act 2023 (LURA 2023) stands as a monumental legislative intervention, meticulously designed to orchestrate a profound transformation of the United Kingdom’s long-established planning and development framework. This ambitious overhaul is intrinsically linked to the government’s overarching ‘levelling up’ agenda, which seeks to mitigate persistent regional disparities and foster equitable growth across the nation. This comprehensive research paper undertakes an exhaustive analysis of the Act’s foundational mechanisms, delving into the intricacies of its mandate for a systemic shift towards digital planning, the revolutionary introduction of the new Infrastructure Levy (IL) poised to supersede the Community Infrastructure Levy (CIL) and Section 106 agreements, and the statutory promotion of area-wide design codes. It critically examines the multifaceted potential impacts of these provisions on the efficiency and transparency of planning processes, the evolving cost structures and viability considerations for developers, and the broader societal objectives of addressing entrenched regional inequalities, accelerating housing delivery, and elevating design quality across the UK. Furthermore, the paper scrutinises the considerable implementation challenges and prevailing criticisms that could impede the Act’s intended efficacy, offering a nuanced perspective on its prospective long-term influence on the built environment and national development trajectory.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

1. Introduction

The Levelling-Up and Regeneration Act 2023 represents a pivotal legislative milestone, signalling a determined effort to recalibrate and invigorate the UK’s planning and development landscape. Enacted against a backdrop of chronic housing shortages, perceived inefficiencies within the existing planning system, and deep-seated regional economic disparities, the Act forms a central pillar of the Conservative government’s ‘levelling up’ agenda, as articulated in the Levelling Up White Paper (Department for Levelling Up, Housing and Communities, 2022). This agenda aspires to diffuse opportunity more equitably across the country, enhancing productivity, fostering pride in place, and improving social capital in communities often overlooked in previous economic expansions.

Historically, the UK’s planning system has undergone numerous reforms, each attempting to balance competing demands for economic growth, environmental protection, and community engagement. From the post-war planning legislation of 1947, which established the modern discretionary planning system, to the more recent efforts under the Localism Act 2011 and the National Planning Policy Framework (NPPF), successive governments have sought to streamline processes, empower local decision-making, and accelerate housing delivery (House of Commons Library, 2024). However, despite these efforts, challenges such as protracted planning application timelines, the inconsistent provision of supporting infrastructure, and an enduring housing supply deficit have persisted, prompting this latest, more radical legislative intervention.

This paper delves into the Act’s comprehensive provisions, dissecting their theoretical underpinnings and assessing their practical potential to fundamentally reshape the planning system. It considers their broader implications not only for the primary actors – developers, local planning authorities (LPAs), and communities – but also for the wider objectives of national spatial strategy and economic rebalancing. The subsequent sections will provide a detailed exposition of the Act’s context and objectives, followed by an in-depth examination of its key mechanisms: digital planning, the Infrastructure Levy, and design codes. The paper will then analyse the projected impacts on planning processes, developer economics, and the critical issues of regional equity and housing supply. Finally, it will address the notable challenges and criticisms surrounding the Act’s implementation, concluding with a summative assessment of its transformative potential and the conditions necessary for its successful realisation.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

2. Context and Objectives of the Act

The genesis of the Levelling-Up and Regeneration Act 2023 can be traced to a confluence of pressing issues that have long afflicted the United Kingdom’s built environment and socio-economic fabric. Understanding these underlying challenges is crucial for appreciating the Act’s ambitious scope and its intended remedies.

2.1 Persistent Challenges in the UK Planning System

2.1.1 Chronic Housing Delivery Deficit: Despite successive government targets, the UK has consistently fallen short of building the requisite number of homes to meet demand. The government’s aspiration of delivering 300,000 new homes annually has remained elusive, leading to escalating housing costs, particularly in high-demand areas, and a deepening affordability crisis (House of Commons Library, 2023a). The planning system has frequently been cited as a primary bottleneck, with criticisms ranging from slow decision-making processes and an overly complex application system to perceived ‘land banking’ by developers holding onto consented sites without building.

2.1.2 Inadequate Infrastructure Provision: New housing developments necessitate significant investment in supporting infrastructure, including schools, healthcare facilities, transport networks, and utilities. The existing mechanisms for securing these contributions, primarily the Community Infrastructure Levy (CIL) and Section 106 agreements, have faced widespread criticism. CIL, introduced in 2010, was intended to be simpler and more transparent, but its fixed rates often proved inflexible and its collection rates inconsistent (Jones Day, 2024a). Section 106 agreements, whilst flexible, were frequently characterised as protracted, opaque, and negotiation-heavy, leading to delays and disputes over developer viability (Pinsent Masons, 2024). This often resulted in a disconnect between the pace of housing delivery and the provision of essential services, creating pressure on existing infrastructure and impacting the quality of life in new communities.

2.1.3 Entrenched Regional Inequalities: The ‘levelling up’ agenda explicitly acknowledges and seeks to redress significant geographical disparities in economic productivity, educational attainment, health outcomes, and access to public services across the UK (Department for Levelling Up, Housing and Communities, 2022). Planning and regeneration are viewed as critical levers in this endeavour, capable of stimulating investment, creating jobs, and enhancing the physical environment in areas that have historically lagged behind. The Act aims to empower local areas to drive their own growth and regeneration, fostering a sense of ‘pride in place’ and ensuring that the benefits of development are more evenly distributed.

2.1.4 Inefficiency and Lack of Transparency: The traditional planning system, often reliant on paper-based submissions and disparate digital formats, has been criticised for its lack of transparency, data standardisation, and administrative burden. This has contributed to lengthy application processing times, a lack of consistent data for strategic planning, and difficulties for the public in engaging with complex planning information (PlaceChangers, 2024). The absence of clear, nationally consistent data standards has hampered efforts to analyse trends, monitor performance, and implement data-driven policy decisions.

2.2 Core Objectives of the Act

Against this backdrop, the Levelling-Up and Regeneration Act 2023 articulates several ambitious objectives, seeking to create a planning system that is more efficient, equitable, and responsive to modern challenges:

2.2.1 Accelerate Development and Boost Housing Supply: A primary goal is to expedite the planning application process and ensure that planning permissions translate into actual homes built. This involves streamlining procedures, reducing bureaucratic hurdles, and introducing mechanisms to encourage faster build-out rates. By addressing the bottlenecks in the system, the Act aims to significantly increase the supply of housing across all tenures.

2.2.2 Enhance Infrastructure Provision through a Reformed Funding Mechanism: The Act’s radical overhaul of development contributions through the Infrastructure Levy is designed to provide a more predictable, transparent, and potentially more lucrative funding stream for local and strategic infrastructure. This aims to ensure that new developments are adequately supported by the necessary physical and social infrastructure from the outset, improving the liveability and sustainability of new communities.

2.2.3 Promote Equitable Growth and Regional Regeneration: By empowering local authorities and communities, the Act intends to facilitate targeted regeneration initiatives in disadvantaged areas. The flexibility within the ‘levelling up’ framework, supported by the new planning tools, is intended to attract investment, create employment opportunities, and enhance public services, thereby contributing directly to the reduction of regional disparities and fostering a more balanced national economy.

2.2.4 Elevate Design Quality and Community Engagement: The Act places a significant emphasis on promoting beautiful, well-designed, and locally distinctive developments. By mandating the preparation of design codes, it seeks to ensure that new buildings and places are contextually appropriate, enhance local character, and command the support of local communities. This is intended to foster a greater sense of ‘pride in place’ and mitigate the negative perceptions sometimes associated with new development.

2.2.5 Modernise the Planning System through Digitalisation: A fundamental objective is the transformation of the planning system into a modern, data-driven digital platform. This aims to improve efficiency, transparency, and accessibility, enabling better data analysis for decision-making, reducing administrative burdens, and making the planning process more intelligible and engaging for all stakeholders (PlaceChangers, 2024).

In essence, the LURA 2023 seeks to move beyond incremental adjustments, aiming for a systemic shift that addresses the deep-seated structural issues within the planning framework, aligning it more closely with the government’s broader socio-economic ambitions.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

3. Key Provisions of the Act

The Levelling-Up and Regeneration Act 2023 introduces several interconnected and transformative provisions, each designed to address specific deficiencies within the existing planning system and advance the Act’s overarching objectives.

3.1 Digital Planning Initiatives

One of the most forward-looking aspects of the LURA 2023 is its explicit commitment to the digitalisation of the planning system. This initiative represents a significant departure from the predominantly paper-based or unstructured digital formats that have characterised UK planning for decades, aiming to usher in an era of greater efficiency, transparency, and data-driven decision-making.

3.1.1 Current State and Limitations: Historically, planning applications and documents have been submitted and processed as largely unstructured data, often in PDF format. This approach, while familiar, inherently limits interoperability, data analysis, and the ability to automate routine tasks. The lack of standardised data across different local authorities has made it challenging to aggregate information, identify trends, and conduct robust national-level performance monitoring or policy evaluation. This fragmentation has contributed to administrative burdens for LPAs, potential for errors, and a less accessible experience for applicants and the public (Jones Day, 2024b).

3.1.2 Specifics of the Act’s Mandate: Sections 84 and 85 of the Act are central to this transformation. Section 84 grants the Secretary of State the power to make regulations requiring LPAs to comply with specified data standards regarding planning documents, applications, and decisions. This mandates a shift towards structured, machine-readable data. Section 85 further empowers the Secretary of State to specify the digital tools and systems that LPAs must use to manage and share this data. This could include requirements for standardised online portals, GIS-based systems, and common data models, facilitating consistency and accuracy across the entire planning system (Foot Anstey, 2024).

The ambition extends beyond merely digitising existing processes. The government’s vision, often articulated in policy documents accompanying the Act, is to create a ‘plan-led system’ that is genuinely digital from end-to-end, leveraging technology to make planning processes more intuitive, transparent, and collaborative. This includes the potential for AI-assisted application checks, automated data extraction, and more sophisticated spatial analysis tools for plan-making and development management (PlaceChangers, 2024).

3.1.3 Anticipated Benefits: The adoption of digital tools and standardised data is expected to yield multiple benefits:

  • Enhanced Transparency and Accessibility: Digital platforms can make planning information more readily available and understandable to the public, fostering greater engagement and trust.
  • Streamlined Processes and Reduced Administrative Burden: Automation of routine tasks, consistent data formats, and integrated systems can significantly reduce processing times for applications, freeing up LPA staff for more complex analytical work.
  • Improved Data Analysis and Strategic Planning: Standardised, accessible data will enable LPAs and central government to conduct more robust analysis of development trends, infrastructure needs, and environmental impacts, leading to more evidence-based policy decisions and more effective local plans.
  • Greater Consistency and Accuracy: Uniform data standards can minimise discrepancies and errors across different authorities and stages of the planning process.
  • Predictability for Developers: A more transparent and data-rich system can provide developers with clearer expectations regarding planning requirements and likely outcomes, reducing risk and uncertainty.

3.1.4 Implementation Challenges and Criticisms: Despite the promising outlook, the success of digital planning hinges on overcoming significant hurdles:

  • Funding and Resources for LPAs: Many LPAs operate with constrained budgets and a shortage of technical expertise. The initial investment in new software, hardware, and staff training will be substantial. The pace of this transformation will be directly linked to the financial support provided to local authorities.
  • Interoperability and Data Migration: Integrating new digital systems with existing legacy systems and migrating vast quantities of historical data will be a complex and time-consuming undertaking.
  • Data Security and Privacy: The centralisation and sharing of sensitive planning data necessitate robust cybersecurity measures and clear protocols to protect personal information.
  • Digital Divide: Ensuring equitable access to digital planning services for all segments of the population, including those with limited digital literacy or internet access, will be critical to prevent digital exclusion.
  • Cultural Shift: Overcoming resistance to change within planning departments and fostering a culture of digital literacy and innovation will require sustained effort and leadership.

3.2 Introduction of the Infrastructure Levy (IL)

Perhaps the most significant financial reform introduced by the LURA 2023 is the new Infrastructure Levy (IL), which is poised to replace the existing and often criticised Community Infrastructure Levy (CIL) and Section 106 agreements. This fundamental shift aims to establish a more transparent, predictable, and potentially more effective mechanism for funding the infrastructure necessary to support new developments.

3.2.1 Critique of Existing Mechanisms (CIL and Section 106):

  • Community Infrastructure Levy (CIL): While intended to be simpler and more transparent than Section 106, CIL suffered from several drawbacks. Its fixed, per-square-metre rates often failed to capture the true uplift in land value generated by planning permission, especially in high-value areas. Its inflexibility meant it was sometimes poorly aligned with the specific infrastructure needs of a development or locality, and collection rates varied significantly, leading to shortfalls in funding (Jones Day, 2024a).
  • Section 106 Agreements: These bespoke, negotiated agreements between developers and LPAs, designed to mitigate the specific impacts of a development, were frequently criticised for their complexity, lack of transparency, and the lengthy delays they introduced into the planning process. The negotiation process could be adversarial, often involving protracted discussions over development viability, which could lead to reduced infrastructure contributions or even stalled projects (Pinsent Masons, 2024).

3.2.2 Mechanism of the New Infrastructure Levy: The IL represents a radical departure. Instead of fixed rates or negotiated contributions, the IL is designed as a proportion of the gross development value (GDV) of the land when it is developed. Key features include:

  • Development Value-Based: The levy will be charged as a percentage of the final GDV of the completed development, minus a baseline value (e.g., existing use value or a minimum threshold). This aims to capture a greater proportion of the uplift in land value that arises from the granting of planning permission.
  • Mandatory for LPAs: Local planning authorities will be required to prepare an Infrastructure Levy charging schedule, setting the rates and thresholds applicable within their areas. These schedules will be subject to examination and approval, similar to local plans.
  • Broader Scope: Crucially, the IL is intended to fund a wider range of infrastructure than CIL, and will also encompass the provision of affordable housing, which was previously secured primarily through Section 106 agreements (Jones Day, 2024a). This integration aims to create a single, comprehensive mechanism for all development contributions.
  • Collection Point: Unlike CIL, which is often payable at commencement of development, the IL is proposed to be collected on the occupation or completion of the development. This shifts some of the financial risk from developers, as the levy is paid only once the development is generating revenue, but may also raise questions about upfront infrastructure funding.
  • Increased Transparency: The value-based approach, with published charging schedules, aims to provide greater clarity and predictability for developers and landowners regarding their potential contributions from an earlier stage in the land transaction process.

3.2.3 Aims and Potential Benefits: The IL is designed to deliver several improvements:

  • Enhanced Predictability and Certainty: By linking contributions to development value and publishing clear charging schedules, the IL aims to reduce the negotiation burden and provide greater financial certainty for developers, potentially accelerating decision-making.
  • Increased Funding for Infrastructure and Affordable Housing: By capturing a share of the uplift in land value, the government anticipates that the IL will generate significantly more revenue than CIL and Section 106 combined, leading to more robust funding for local infrastructure and a greater supply of affordable housing.
  • Simplified System: Replacing two complex and often overlapping systems with a single levy aims to simplify the planning finance landscape.
  • Fairer Capture of Value: The value-based approach is intended to ensure that communities benefit more directly from the uplift in land values generated by planning permissions.

3.2.4 Concerns and Criticisms: Despite its potential, the IL has attracted significant scrutiny and concern:

  • Viability Challenges: Critics, particularly from the development industry, warn that a higher levy could impact development viability, particularly on marginal sites or during economic downturns (Brownfield & Regeneration Network, 2024). This could lead to a reduction in land values, slower development rates, or stalled projects if the levy proves too high.
  • Valuation Complexity: Accurately assessing ‘gross development value’ and ‘baseline value’ can be complex and contentious, potentially leading to disputes and new forms of negotiation, undermining the aim of simplicity.
  • Risk to Affordable Housing: While affordable housing is explicitly within the IL’s scope, there are concerns that LPAs might prioritise other infrastructure needs over affordable housing in their spending plans, especially if the total revenue generated is less than anticipated. The Act does state that LPAs must have regard to securing affordable housing, but the precise mechanisms for this are subject to secondary legislation.
  • Upfront Funding Gap: If the levy is collected on completion, questions arise about how upfront funding for infrastructure, which is often required early in a development’s lifecycle, will be secured.
  • Impact on Land Values: The IL will likely impact the residual value of land, potentially leading to lower prices for landowners, which could in turn affect the availability of sites for development.
  • Strategic Infrastructure Funding: While the IL can fund local infrastructure, its capacity to fund large-scale, cross-boundary strategic infrastructure projects (e.g., major road schemes, new rail lines) that benefit multiple LPAs remains a significant question.

3.3 Promotion of Design Codes

The Levelling-Up and Regeneration Act 2023 places a renewed and statutory emphasis on the quality of design in new developments, building upon the principles articulated in the National Design Guide and the National Model Design Code (NMDC) (Department for Levelling Up, Housing and Communities, 2023a). The Act mandates that all local planning authorities develop design codes for their areas.

3.3.1 Background and Policy Context: The focus on design quality has gained increasing prominence in UK planning policy, driven by public dissatisfaction with poor-quality developments and the recognition that well-designed places contribute significantly to health, well-being, and local pride. The ‘Building Better, Building Beautiful Commission’ (2020) highlighted the need for clearer design expectations and greater public involvement in shaping the aesthetics of their local areas. The LURA 2023 operationalises these recommendations.

3.3.2 Mandate and Purpose: Section 81 of the Act requires LPAs to prepare area-wide design codes as part of or alongside their local plans. These codes are intended to be a visual and textual guide, setting out clear, legally enforceable design parameters for new developments. Unlike broad design policies, design codes provide specific, measurable requirements for elements such as:

  • Building height, massing, and density
  • Materials and architectural styles
  • Street layouts, block structure, and public realm design
  • Green infrastructure, tree planting, and open spaces
  • Parking provision and waste management

The primary purpose is to ensure that new developments adhere to high design standards that genuinely reflect and enhance local character and community preferences. They aim to provide greater certainty for developers by articulating what constitutes acceptable design, while simultaneously empowering communities by allowing them to directly shape the aesthetic future of their neighbourhoods (Foot Anstey, 2024).

3.3.3 Anticipated Benefits:

  • Improved Design Quality: By providing clear benchmarks, design codes are expected to raise the overall quality of new buildings and places, making them more attractive, functional, and sustainable.
  • Greater Certainty for Developers: Developers can have a clearer understanding of design expectations from the outset, potentially reducing design-related revisions and speeding up the planning application process for compliant schemes.
  • Enhanced Local Distinctiveness: Codes can help ensure that new developments integrate sensitively with their surroundings and contribute positively to local character, avoiding generic or out-of-place designs.
  • Empowered Communities: The process of developing design codes offers a significant opportunity for communities to participate directly in shaping the visual identity and functional layout of their areas, fostering a sense of ownership and ‘pride in place’.
  • Streamlined Decision-Making: For applications that demonstrably conform to an adopted design code, the design review element of the planning process can be significantly accelerated, leading to faster approvals.

3.3.4 Challenges and Criticisms:

  • Resourcing and Expertise: Developing comprehensive, high-quality design codes requires significant design expertise and resources within LPAs, which are often underfunded and understaffed. The quality of the codes will directly correlate with the capacity of LPAs.
  • Risk of Over-Prescription vs. Flexibility: Striking the right balance between providing clear guidance and being overly prescriptive is crucial. Codes that are too rigid could stifle innovation, lead to homogenous design, or fail to adapt to evolving architectural trends and sustainability requirements. Conversely, codes that are too vague may not offer the desired certainty.
  • Public Engagement Quality: While mandatory, ensuring genuine and constructive public engagement in code development, rather than merely consultation, can be challenging, particularly in managing diverse community expectations.
  • Enforcement and Appeal: The effectiveness of design codes will depend on the LPA’s capacity to enforce them consistently. The appeals process will need to clearly define how deviations from design codes are assessed and justified.
  • Relationship with National Standards: Integrating local design codes with national policies and guidelines, such as the NPPF and the National Design Guide, will require careful calibration to avoid conflicts.

These three key provisions – digital planning, the Infrastructure Levy, and design codes – represent the core pillars of the LURA 2023’s attempt to fundamentally reshape the UK planning system, each aiming to address longstanding challenges in a comprehensive and integrated manner.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

4. Implications for Planning Processes

The transformative provisions of the Levelling-Up and Regeneration Act 2023 are designed to induce significant shifts in the operational dynamics and strategic direction of planning processes across the United Kingdom. These implications extend to efficiency, financial predictability, enforcement, and the very nature of local plan-making.

4.1 Streamlining and Efficiency

The Act’s emphasis on digitalisation, the reform of development finance, and the introduction of design codes collectively aim to inject unprecedented levels of streamlining and efficiency into the planning system.

4.1.1 The Role of Digitalisation: The mandate for standardised digital data (Sections 84 & 85) is arguably the most fundamental lever for efficiency. By moving away from unstructured documents to machine-readable data, LPAs can automate routine administrative tasks, such as initial validation checks, data extraction, and performance reporting (PlaceChangers, 2024). This can free up planning officers to focus on complex policy interpretation, negotiation, and strategic decision-making. Furthermore, digital planning portals and geographic information systems (GIS) can improve communication between applicants and LPAs, facilitate real-time tracking of applications, and reduce delays associated with information requests and physical document handling. The ability to analyse large datasets can also lead to more efficient strategic planning, identifying areas suitable for development more rapidly and with greater precision.

4.1.2 The Impact of the Infrastructure Levy (IL): The IL’s design is intended to reduce the considerable time and resources historically consumed by Section 106 negotiations. By shifting to a value-based, predetermined levy, developers and LPAs will have a clearer understanding of financial contributions from the outset. This aims to minimise protracted discussions over viability, which have often been a major cause of delay in securing planning permissions (Jones Day, 2024a). While new challenges related to valuation and dispute resolution for the IL may emerge, the overall intent is to simplify and accelerate the financial aspects of securing consent.

4.1.3 Design Codes as an Accelerator: Area-wide design codes (Section 81) are envisioned to streamline the design review stage of the planning process. Where a proposed development demonstrably conforms to an adopted design code, the subjective elements of design assessment can be significantly reduced. This provides greater certainty for developers and can lead to faster approval times for compliant schemes, as fewer design iterations or extensive design justification reports may be required (Foot Anstey, 2024). This clarity should also reduce the number of design-related planning appeals.

4.1.4 Anticipated Outcome: The combined effect of these measures is projected to reduce the average time taken for planning decisions, accelerate the journey from land allocation to spades in the ground, and thereby contribute to meeting housing targets more effectively. However, the realisation of this efficiency is contingent on substantial initial investment in technology and training for LPAs, as well as a seamless transition period avoiding dual-running inefficiencies.

4.2 Impact on Developer Costs and Predictability

The Act introduces a new calculus for developers, altering both the predictability of planning outcomes and the ultimate cost of delivering new schemes.

4.2.1 Predictability: The LURA 2023 aims to enhance predictability in several key areas:

  • Infrastructure Levy: The IL’s value-based, published charging schedules intend to provide far greater transparency regarding the financial contributions required from developers. This contrasts with the often-opaque and negotiated nature of Section 106 agreements, allowing developers to factor in costs more accurately at the land acquisition stage (Jones Day, 2024a). However, the variability of IL rates set by different LPAs could introduce a new layer of complexity requiring diligent due diligence from developers operating across multiple jurisdictions.
  • Design Codes: By setting clear design parameters upfront, design codes reduce the ambiguity surrounding acceptable design. Developers will have a clearer understanding of the aesthetic and functional expectations for their schemes, which can minimise costly redesigns and delays associated with subjective design critiques during the application process (Foot Anstey, 2024).
  • National Development Management Policies (NDMPs): The introduction of NDMPs (Section 82) is intended to provide a more consistent national policy framework, reducing the need for LPAs to duplicate national policy in their local plans. This should offer greater certainty for developers regarding core planning principles that apply universally.

4.2.2 Costs: The impact on developer costs is multifaceted:

  • Infrastructure Levy: While designed to capture more value uplift, the IL’s precise impact on developer profitability will depend on the rates set by LPAs. There is a risk that a higher levy could reduce residual land values, shifting the burden onto landowners, or in some cases, impacting developer margins if land prices are sticky. The timing of IL collection (on occupation) offers some cashflow advantages compared to upfront CIL payments, but still requires robust financial modelling.
  • Digitalisation: While promising long-term efficiency savings, the initial investment in adapting to new digital submission requirements and internal systems may represent an upfront cost for developers, particularly smaller and medium-sized enterprises (SMEs).
  • Design Codes: While providing certainty, complying with potentially prescriptive design codes may necessitate higher design fees or specific material choices, potentially increasing construction costs in certain contexts. However, the reduction in design-related delays could offset these additional expenses.
  • Biodiversity Net Gain (BNG): The mandatory 10% BNG requirement (Section 98 and Schedule 14 of LURA 2023, building on Environment Act 2021 provisions) introduces a new, quantifiable cost for developers, whether through on-site provision, off-site habitat creation, or the purchase of biodiversity credits. This will need to be factored into viability assessments from the earliest stages of project conception.

Overall, the Act seeks to improve cost predictability for developers, albeit potentially with a shift in the nature and quantum of those costs. The success of this balance will be critical for maintaining investment in the housing and development sectors.

4.3 Enforcement and Compliance

The Act introduces several new and enhanced enforcement mechanisms aimed at ensuring that planning permissions translate into tangible development and that the planning system operates more effectively.

4.3.1 Commencement Notices: A significant new provision requires developers to submit a commencement notice to the LPA before starting work on a development (Section 104). This measure aims to provide LPAs with clearer visibility of when development is starting, facilitating more effective monitoring and enabling earlier identification of issues or breaches. It also creates a definitive trigger point for the beginning of the development process, which could be important for the timing of IL collection.

4.3.2 Completion Notices: The Act strengthens the power of local authorities to serve completion notices (Section 102) if developments are not progressing within a reasonable timeframe, particularly where they have become stalled. This measure, a re-emphasis of existing but rarely used powers, aims to tackle the issue of ‘land banking’ and ensure that sites with planning permission are built out efficiently. If a completion notice is issued and the development is not completed within the specified period, the planning permission can lapse, forcing developers to reapply or risk losing their consent. This provides a stronger incentive for developers to proceed with schemes once permission is granted (House of Commons Library, 2024).

4.3.3 Enforcement Orders and Direct Action: The Act also enhances LPAs’ ability to take direct enforcement action against breaches of planning control, including powers related to temporary stop notices and injunctions (Sections 110-112). These measures aim to provide LPAs with more robust tools to address unauthorised development and ensure compliance with planning conditions and requirements.

4.3.4 Compliance with Data Standards: The mandate for digital planning and data standards (Sections 84 & 85) implicitly introduces a new layer of compliance requirement for both LPAs and applicants. Adherence to these standards will be necessary for valid submissions and efficient processing, ensuring the integrity of the digital planning system.

4.3.5 Effectiveness of Enforcement: The efficacy of these new and strengthened enforcement powers is heavily reliant on the capacity and willingness of local authorities to utilise them. This requires sufficient staffing, legal expertise, and financial resources within planning enforcement teams, areas that have often faced significant cuts in recent years. Furthermore, the practical application of completion notices, particularly in terms of what constitutes a ‘reasonable timeframe’ for development, may lead to legal challenges.

4.4 Local Plans and Development Management

Beyond the specific mechanisms, the Act also fundamentally redefines the structure and content of local plans and the relationship between local and national planning policy.

4.4.1 Streamlined Local Plans: The Act aims to simplify and expedite the local plan-making process (Sections 75-79). It proposes removing the ‘duty to cooperate’ in its current form, a complex statutory requirement that often hindered collaboration between authorities and delayed plan adoption. Instead, LPAs will be required to prepare their local plans more efficiently, with a greater emphasis on strategic infrastructure planning and environmental considerations.

4.4.2 New National Development Management Policies (NDMPs): A significant innovation is the introduction of National Development Management Policies (NDMPs) (Section 82). These policies will set out generic, nationally consistent planning principles that apply across the country, covering common planning considerations such as design, heritage, and environmental protection. The intention is that once adopted, NDMPs will automatically be part of the development plan and will reduce the need for LPAs to replicate these common policies in their local plans.

4.4.3 Implications for Local Plan Content: Local plans will therefore become more focused on genuinely local matters, such as the spatial distribution of growth, the allocation of specific sites for development, and the designation of areas for particular uses or protection. This is intended to make local plans shorter, quicker to produce, and more strategic (Detailed Planning, 2024). However, concerns have been raised that this shift could centralise power and dilute local democratic input if NDMPs become too prescriptive, potentially limiting the ability of LPAs to tailor policies to specific local circumstances.

4.4.4 Enhanced Community Engagement in Plan-Making: While streamlining is a goal, the Act also emphasises the importance of meaningful community engagement in the preparation of local plans and design codes. This aims to foster greater public buy-in and acceptance of new development by involving local people in shaping the vision for their areas, though the practicalities of achieving genuine co-creation remain a challenge.

These interwoven changes to planning processes aim to create a more responsive, efficient, and forward-looking system. Their success will be measured by their ability to deliver more homes, better infrastructure, and higher quality places, while retaining local democratic accountability and public trust.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

5. Addressing Regional Inequalities and Housing Targets

The Levelling-Up and Regeneration Act 2023 is not merely a technical adjustment to planning law; it is a strategic instrument within the broader ‘levelling up’ agenda, designed to directly confront the persistent challenges of regional inequalities and the national housing crisis. Its provisions aim to foster more equitable development outcomes and accelerate housing delivery across the UK.

5.1 Infrastructure Delivery and Regional Equity

The new Infrastructure Levy (IL) is positioned as a key mechanism for addressing regional disparities in infrastructure provision. By linking infrastructure funding to development value, the Act intends to channel resources to areas experiencing significant growth pressures, where new infrastructure is most desperately needed.

5.1.1 IL’s Potential for Regional Rebalancing: In theory, the value-based nature of the IL means that areas with high land values and significant development potential should generate substantial contributions, which can then be reinvested locally in schools, healthcare facilities, transport links, and green spaces. This could help to ensure that growth is accompanied by the necessary supporting infrastructure, improving the quality of life and attractiveness of these areas for further investment (Jones Day, 2024a). By making infrastructure provision more transparent and predictable, it could also de-risk investment in regions where infrastructure deficits have historically deterred development.

5.1.2 Risks of Exacerbating Disparities: A significant concern, however, is the potential for the IL to inadvertently exacerbate existing regional inequalities. Areas with lower land values or slower rates of development may generate less IL revenue. If these areas also have significant infrastructure needs, they could find themselves with insufficient funds to address them, potentially widening the gap between prosperous and struggling regions. This raises questions about how strategic, cross-boundary infrastructure – such as major road improvements, new railway lines, or large-scale utility upgrades – will be funded, as such projects often benefit multiple local authorities and may not directly correlate with a single development’s value uplift. Without a robust national mechanism for top-up funding or strategic infrastructure grants, the IL might primarily address local, rather than regional, infrastructure deficits (Brownfield & Regeneration Network, 2024).

5.1.3 Alignment with Levelling Up Missions: The government’s Levelling Up White Paper (2022) outlined 12 national missions, including increasing ‘pride in place’, improving living standards, and boosting local productivity. The LURA 2023 is intended to contribute to these missions by enabling the creation of higher quality places, supported by better infrastructure, which are more attractive for residents and businesses. The emphasis on design codes and community engagement aims to foster a sense of local ownership and pride, aligning with the qualitative aspects of the levelling up agenda.

5.2 Housing Delivery and Affordability

Accelerating housing delivery and tackling the affordability crisis are central planks of the LURA 2023. The Act’s provisions are designed to remove impediments to development and stimulate the construction of more homes.

5.2.1 Driving Housing Delivery:

  • Streamlined Processes: The combined effect of digital planning, the IL, and design codes is intended to shorten planning application timelines and reduce the overall development lifecycle. Faster approvals and fewer disputes over contributions or design should lead to a quicker progression from planning consent to actual construction (Detailed Planning, 2024).
  • Enforcement of Build-Out: The enhanced enforcement powers, particularly the stricter regime for completion notices (Section 102), aim to tackle the issue of stalled sites and ensure that permissions are built out promptly. This directly addresses criticisms of ‘land banking’ and seeks to convert planning potential into tangible housing supply.
  • Plan-Led System: The simplified local plan-making process, coupled with NDMPs, aims to ensure that LPAs have up-to-date, robust plans that clearly identify sites for housing, providing greater certainty for developers and reducing the likelihood of speculative or unplanned development.

5.2.2 Impact on Housing Affordability: The relationship between the Act’s provisions and housing affordability is complex and subject to debate.

  • Affordable Housing Provision via IL: The IL is specifically designed to fund affordable housing alongside other infrastructure. This integrates affordable housing contributions directly into the main levy mechanism. The intention is that a broader capture of land value uplift will lead to more funds being available for affordable housing. However, the precise quantum of affordable housing delivered will depend on the IL rates set by individual LPAs, the overall revenue generated, and the prioritisation given to affordable housing in spending plans (Jones Day, 2024a).
  • Supply-Side Economics: Economic theory suggests that increasing the supply of housing, facilitated by the Act’s streamlining measures, should, in the long term, put downward pressure on housing prices and improve affordability. However, the UK housing market is influenced by numerous factors, including interest rates, economic growth, and global investment patterns, meaning planning reform alone may not be a panacea for affordability issues.
  • Land Value Impact: The IL’s impact on land values is critical. If land values decrease in response to the levy, this could make land acquisition cheaper for developers, potentially enabling them to build more homes or absorb other costs without significantly increasing final sale prices. Conversely, if landowners resist lower prices, the levy could be passed on to the end buyer, or viability could be threatened.

5.2.3 Quality and Mix of Housing: The emphasis on design codes (Section 81) aims to ensure that new homes are not only numerous but also of high quality, contributing positively to their surroundings and the well-being of residents. While the Act focuses on total numbers, the quality and mix of housing (e.g., family homes, apartments, social housing) will ultimately depend on local plan policies, market demand, and the specific application of the IL for affordable housing.

5.3 Environmental Sustainability and Biodiversity Net Gain (BNG)

The Act also integrates crucial environmental considerations into the planning framework, notably through the mandatory implementation of Biodiversity Net Gain.

5.3.1 Biodiversity Net Gain (BNG): Building upon the Environment Act 2021, the LURA 2023 makes BNG a mandatory condition for most planning permissions (Section 98, inserting new provisions into the Town and Country Planning Act 1990). This requires developers to demonstrate that their schemes will deliver a measurable 10% increase in biodiversity value compared to the pre-development baseline. This can be achieved through on-site habitat creation or enhancement, off-site provision, or the purchase of biodiversity credits as a last resort.

5.3.2 Implications for Development: BNG adds a new layer of complexity and cost for developers, requiring ecological surveys, BNG assessments using a standardised metric, and the implementation and long-term management of biodiversity enhancements. It fundamentally shifts the paradigm from simply mitigating harm to actively enhancing natural capital within and around developments. This will require new skills within LPAs and the development sector (House of Commons Library, 2023b).

5.3.3 Wider Environmental Considerations: While BNG is a direct consequence of the Act, the broader objectives of sustainable development and climate change adaptation are interwoven throughout the new planning framework. Design codes can promote features like sustainable urban drainage systems (SuDS), green infrastructure, and energy-efficient building standards. The emphasis on plan-led development and data-driven insights also allows for more strategic consideration of environmental constraints and opportunities, such as flood risk management, protection of green spaces, and alignment with national climate targets.

In sum, the LURA 2023 attempts a delicate balancing act: unleashing development potential to meet housing needs, ensuring this growth is supported by infrastructure, striving for regional equity, and upholding critical environmental standards. The efficacy of these ambitions will hinge on the nuanced implementation of the Act’s diverse provisions.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

6. Potential Challenges and Criticisms

Despite its ambitious scope and stated objectives, the Levelling-Up and Regeneration Act 2023 has not been without significant challenges and criticisms. These span from practical implementation hurdles to fundamental concerns about its potential impacts on various stakeholders and the integrity of the planning system itself.

6.1 Implementation and Capacity

Perhaps the most pervasive concern relates to the sheer scale of the reforms and the capacity of local planning authorities (LPAs) to implement them effectively.

6.1.1 LPA Resources and Funding: Years of austerity have left many planning departments under-resourced and understaffed. The Act introduces demanding new requirements, including the development of comprehensive digital systems, the preparation of complex Infrastructure Levy charging schedules (requiring new valuation expertise), and the drafting of area-wide design codes (necessitating significant design knowledge). Without substantial, ring-fenced funding and a national programme for skills development and recruitment, there is a significant risk that many LPAs will struggle to meet these new mandates, leading to inconsistencies, delays, and a potential decline in service quality (Brownfield & Regeneration Network, 2024; House of Commons Library, 2024).

6.1.2 Complexity of Transition: The move from the existing CIL and Section 106 regimes to the new IL, and from paper-based to fully digital planning, will be a complex, multi-year transition. LPAs will need to manage two systems concurrently for a period, which could create significant administrative burdens, confusion, and potential for legal challenge. The detailed mechanisms for the IL, including valuation methodologies, exemptions, and affordable housing provisions, are largely subject to secondary legislation and ongoing consultation, creating a prolonged period of uncertainty for all parties (Pinsent Masons, 2024).

6.1.3 Skill Gaps: The new requirements necessitate specialist skills that are currently in short supply within LPAs. This includes data scientists and IT specialists for digital transformation, expert valuers for the IL, and urban designers for the development of design codes. Attracting and retaining such talent in the public sector will be a major challenge.

6.2 Impact on Small and Medium-Sized Developers (SMEs)

Concerns have been raised that the Act’s reforms, while potentially streamlining processes for larger, more sophisticated developers, may disproportionately impact smaller and medium-sized enterprises (SMEs) who play a vital role in housing delivery, particularly on smaller sites and in local communities.

6.2.1 Infrastructure Levy Variability: The fact that IL rates and thresholds will be set by individual LPAs could lead to significant variability across different regions. SMEs, which often operate in multiple local authority areas, may find it challenging and costly to navigate a patchwork of different levy rates and accompanying policies, increasing their compliance burden and reducing predictability compared to larger firms with dedicated in-house teams.

6.2.2 Design Code Compliance Costs: While design codes aim to provide certainty, preparing designs that strictly adhere to detailed, potentially prescriptive, area-specific codes may require increased design fees and a more front-loaded investment in design expertise. This could be a greater burden for SMEs with more limited resources compared to larger housebuilders who can amortise such costs across numerous projects.

6.2.3 Digital Requirements: While digital planning promises long-term efficiencies, the initial investment in new software, training, and adapting internal processes to meet new data standards could pose a barrier for SMEs, potentially leading to a consolidation of the market towards larger developers who are better equipped to absorb these initial costs.

Ultimately, a reduction in SME participation could stifle innovation, reduce competition, and slow down the delivery of homes on smaller, often infill, sites that are crucial for meeting housing targets.

6.3 Balancing Development and Environmental Concerns

While the Act introduces mandatory Biodiversity Net Gain (BNG), there are broader concerns about the overarching balance between the drive for accelerated development and the imperative for robust environmental protection.

6.3.1 Green Belt and Environmental Protection: The Act reaffirms protections for the Green Belt and Areas of Outstanding Natural Beauty (AONBs), but the sustained pressure for housing supply raises questions about how these protections will be maintained in practice, particularly where LPAs struggle to identify sufficient developable land outside protected areas. The streamlining of local plans, while intended to accelerate adoption, could also reduce the scrutiny given to environmental impact assessments if not carefully managed.

6.3.2 Climate Change Adaptation: While the Act encourages high-quality design, its direct mechanisms for ensuring climate change adaptation and resilience (e.g., flood risk management, urban heat island effect mitigation) are not as explicit as its focus on housing numbers. Critics argue that planning reform needs to be more explicitly aligned with national climate targets and integrated with strategies for net zero and climate resilience across all development types.

6.3.3 Quality vs. Quantity: There is a concern that the emphasis on speed and numbers in housing delivery might inadvertently lead to a compromise on environmental quality or the provision of sufficient green infrastructure within new developments, despite the intent of BNG and design codes.

6.4 Democratic Accountability and Public Engagement

Concerns have also been voiced regarding the potential impact of the Act on local democratic accountability and the quality of public engagement in planning decisions.

6.4.1 National Development Management Policies (NDMPs): The introduction of NDMPs is seen by some as a centralisation of power, potentially reducing the scope for local discretion and decision-making on matters previously determined at the local level. If NDMPs are too prescriptive, they could limit the ability of local communities and elected councillors to shape development outcomes in a way that genuinely reflects local preferences and circumstances (House of Commons Library, 2024).

6.4.2 Digital Exclusion: While digital planning aims for greater accessibility, there is a risk of exacerbating the ‘digital divide’. Older populations, low-income households, or those with limited digital literacy may struggle to engage effectively with online-only planning processes, potentially disenfranchising segments of the community and undermining the principle of inclusive participation.

6.4.3 Quality of Engagement on Design Codes: While communities are intended to be involved in the creation of design codes, the process needs to ensure genuine co-creation rather than mere consultation on pre-defined options. If public engagement is perfunctory or not adequately resourced, it could lead to disillusionment and a perception that local voices are not truly heard.

6.5 Economic Viability and Investment

The ongoing uncertainty surrounding the detailed implementation of the IL and other provisions poses a risk to investor confidence and development viability.

6.5.1 Policy Uncertainty: As much of the Act’s operational detail is still subject to secondary legislation and extensive consultation, developers and investors face a prolonged period of uncertainty regarding the exact financial and procedural implications. This uncertainty can deter investment, slow down land transactions, and defer development decisions until the full regulatory landscape becomes clear (Pinsent Masons, 2024).

6.5.2 Land Value Impacts: The IL’s impact on land values is a critical economic variable. If the levy significantly reduces the value landowners receive, it could disincentivise land release for development. Conversely, if landowners resist lower prices, the levy could squeeze developer margins, particularly in a high-inflationary environment with rising construction costs, potentially leading to stalled projects.

These challenges highlight that while the LURA 2023 embodies significant ambition, its success will ultimately depend on how effectively these complex issues are navigated during the implementation phase, and whether sufficient resources and political will are maintained to support the necessary systemic overhaul.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

7. Conclusion

The Levelling-Up and Regeneration Act 2023 represents the most significant legislative intervention in the United Kingdom’s planning and development system in a generation. Driven by the overarching ‘levelling up’ agenda, it introduces a suite of transformative reforms aimed at addressing long-standing challenges in housing delivery, infrastructure provision, regional inequalities, and design quality. The Act’s core mechanisms—a fundamental shift towards digital planning, the radical overhaul of development finance through the new Infrastructure Levy, and the statutory mandate for area-wide design codes—collectively signify a profound recalibration of how places are planned, developed, and funded across the nation.

The ambition behind these provisions is clear: to foster a more efficient, transparent, and equitable planning system. Digitalisation promises enhanced accessibility, streamlined processes, and data-driven decision-making, offering the potential to unlock significant efficiencies and reduce administrative burdens for both local authorities and applicants. The Infrastructure Levy aims to provide a more predictable and robust funding stream for vital infrastructure and affordable housing, seeking to capture a greater share of the uplift in land value generated by planning permission and accelerate negotiations that previously proved a significant bottleneck. Simultaneously, the emphasis on design codes seeks to elevate the quality of new developments, ensuring they are locally distinctive, aesthetically pleasing, and contribute positively to community well-being, fostering a greater sense of ‘pride in place’.

Furthermore, the Act’s enhanced enforcement powers, particularly the stricter regime for completion notices, aim to ensure that planning permissions translate into actual homes and that land is developed efficiently, addressing concerns about stalled projects and ‘land banking’. The reforms to local plan-making, including the introduction of National Development Management Policies, are intended to create a more strategic, concise, and dynamic framework for spatial planning, focused on genuinely local matters.

However, the transformative potential of the LURA 2023 is inextricably linked to its successful implementation, which presents formidable challenges. The capacity and resourcing of local planning authorities remain a critical concern; without substantial investment in new technologies, staff training, and specialist expertise (in areas such as data science, valuation, and urban design), the ambitious digital transformation and the effective administration of the Infrastructure Levy and design codes may prove difficult to achieve consistently across all areas. The complexity of transitioning from established systems to entirely new ones, coupled with the ongoing need for extensive secondary legislation, creates a period of prolonged uncertainty for developers and investors.

Moreover, criticisms regarding the potential disproportionate impact on small and medium-sized developers, the nuanced balance between accelerating development and robust environmental protection (beyond the welcome Biodiversity Net Gain mandate), and concerns about the potential centralisation of planning power through National Development Management Policies and the quality of public engagement warrant careful monitoring. The ultimate success of the Infrastructure Levy in generating sufficient funds and effectively delivering affordable housing will depend on the rates set by LPAs and the prevailing economic conditions, which influence development viability and land values.

In conclusion, the Levelling-Up and Regeneration Act 2023 is a bold and comprehensive attempt to modernise and reinvigorate the UK’s planning system. It lays a foundational framework for a more digital, plan-led, and design-focused approach to development. While its proposed changes offer promising avenues for improvement in housing delivery, infrastructure provision, and regional equity, their full impact will only be realised through diligent and well-resourced implementation, continuous evaluation, and an adaptive approach to address unforeseen challenges. The Act marks the beginning of a significant journey, and its long-term legacy will be determined by its ability to deliver tangible, positive outcomes for communities and the built environment across the diverse regions of the United Kingdom.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

References

1 Comment

  1. So, digital planning, eh? Will my neighbor’s extension plans finally be as easy to view as their questionable landscaping choices? Seriously though, how confident are we that local authorities have the resources to make this digital shift without it becoming a technological ‘black hole’ sucking up funding and time?

    Reply

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