New Towns Taskforce: next-generation new towns and recommendations

The New Towns Taskforce, led by Sir Michael Lyons, was commissioned by the Government to explore different approaches to large-scale development. In its report, the taskforce has recommended that a mixture of large-scale communities including urban extensions, urban regeneration, and standalone greenfield sites, should be built.

These new towns have been framed by the Government and the Taskforce not only as a way of helping them achieving housing targets, but also emphasising the positive economic impacts that these new towns will have.

“New towns are going to be a legacy from this government and our time as leaders collectively of the Labour Party of the future,” Steve Reed, Secretary of State for Housing, told a gathering of local government officials during conference on Sunday.

All of the proposed new towns are within easy travelling distance of, or are within, larger cities. Manchester, Leeds, Birmingham, London and Bristol all have a new town location nearby, which will allow future residents easier access to the country’s strongest labour markets.

The Taskforce has also set out a range of recommendations for delivery of these towns within their report:

Placemaking Principles

The Taskforce has developed 10 placemaking principles that it recommends each new town should be built on.

Each new town should have a clear long-term vision for creating a well-designed and distinctive place, supported by a town-wide strategic masterplan and design code to ensure quality.

The towns should be built at a density sufficient to enable residents to walk to local amenities, support public transport, unlock better social infrastructure and create active, liveable neighbourhoods. The developments should support thriving communities by ensuring access to schools, cultural, sporting and healthcare facilities, and other social infrastructure that meets residents’ needs from the outset.

Other principles recommend include standards for environmental sustainability; affordable housing and balanced communities; transport connectivity; business creation and employment opportunities; stewardship; and community engagement.

The Role of Development Corporations in Delivery

The Taskforce emphasis that there should be a role for development corporations in virtually every form of new town scheme.

As development corporations have significant powers to co-ordinate investment, develop expertise, assemble land and facilitate faster delivery, it is believed that this approach will ensure that joined-up infrastructure and amenities are in place from the outset, as well as provide more certainty about the future path of delivery.

Development corporations also benefit from clear ‘no-scheme valuation’ rules when compulsorily purchasing land, this means that any uplift in land value which might result from a new town scheme (including any planning framework) can be ignored in the price paid to landowners ensuring that any compensation paid to landowners through the compulsory purchase order process is fair but not excessive.

However, the Taskforce acknowledges that a range of delivery models may be appropriate depending on the circumstances in each location, for example whether there are single dominant landowners or whether there are existing planning permissions. These approaches may include the potential for central government-led and mayoral-led development corporations.

Both the Taskforce’s report and the Government’s response are clear that public land assembly, probably by development corporations, will be a key tool in the development of new towns.

Role of Local Authorities

The Taskforce emphasised that it was important that new towns were selected in locations where local or combined authorities had a strong recent track record of housing delivery, or have robust plans to develop capability to deliver on the scale required.

The Taskforce recommends that local authorities should have a role on the governing body of any new town development corporation to ensure that the interests of existing and neighbouring residents are represented, as well as to assist and support effective long‑term stewardship.

Affordable Homes Targets

The Taskforce has endorsed the Government’s commitment that each new town should have at least 10,000 homes with a minimum of 40% of them being affordable housing, half of which will be for social rent.

Where viability testing shows this 40% target is not achievable, the Government should provide grant funding to meet the requirement. With this in mind, the Government’s £39bn commitment to social housing investment will be key in delivering the new towns.

Government Funding

In addition to any grant funding to support affordable housing delivery, the Government will need to make funding available to buy the land, obtain planning permission, build infrastructure, and sell “serviced parcels” to residential and commercial developers.

Given the likely breadth of infrastructure new towns will need over their lifetime, departments across the Government, as well as local partners, will need to find room for the infrastructure needs of new towns within their budgets, both now and over the longer term.

In the short term, new towns will require significant upfront cash to establish the necessary delivery vehicles for sites and overcome major constraints to delivery.

The Taskforce cites the £16bn announced for the National Housing Bank as key in unlocking large sites and obtaining the private investment needed. It also recommends the Government explores tax financing instruments within the financing model for each new town over the long term. This is already an area of particular interest, with a number of schemes in dialogue with the National Housing Delivery Fund, MHCLG, the Treasury and Homes England.

Until we have the results of the Strategic Environmental Assessments (“SEA”) and the Chancellor’s verdict in Spring 2026 we will likely not have a clear picture of how much these towns will cost and how much Government funding will be made available to them.

Private Sector Investment

In addition to Government funding, investors and private sector partners could play an important role in the delivery of new towns, but only “where they can demonstrate alignment with the new town principles”. For those investors that do, the Taskforce has called on the Government to foster confidence among investors and other key delivery partners across both the public and the private sector.

Opportunities for partnerships with the private sector will be place-dependent and be of varied length and type of financing  and investor demand will be influenced by the specificity and clarity of the proposition.

In return for meeting the new town principles, the private sector would be able to benefit from the certainty provided by development corporations and their access to powerful planning and investment tools, which in turn will allow for the faster return of capital employed.

Planning Reforms

The Taskforce has recommended a large range of planning and regulatory reforms for the government to consider. These include exploring whether the Government can fast-track the statutory consultee process for new towns, as this takes around 18 months to two years at present, as well as reviewing the current legislative framework to ensure it is set up to support successful and accelerated delivery of new towns and other large-scale developments more generally.

What’s Next?

The Government has confirmed it will progress a consultation on draft proposals and a SEA on the 12 recommended locations “early next year”, with a view to at least three of the sites being targeted to begin delivery before the end of this parliament.

The Strategic Environmental Assessment will be undertaken to understand the environmental implications of developing new towns. No final decisions on locations will be made until this assessment concludes and preferred locations could change as a result of the process and some proposed locations could even be cut.

The Government will publish the draft proposals and final SEA for consultation in Spring, before confirming the locations that will be progressed as new towns soon after.

A New Towns Unit will also be established by the government to progress development on new towns. The Unit will work with all departments and their agencies to ensure new towns are a test bed for innovation and to unblock barriers to delivery.

What About Those not Chosen?

For those schemes not selected to be a part of the programme the Taskforce has noted that “there remains a significant need for smaller new settlements and sustainable urban extensions with housing and employment opportunities, alongside physical and social infrastructure. Many schemes not selected will still be well placed to deliver these benefits”.

Whilst Government funding and support may well concentrate on the selected sites, there are many locally-led and privately funded opportunities which can still be progressed. Institutional and private equity investors involvement can be targeted, particularly where land values are reasonable and sales/lettings values higher. Government support via Homes England can also continue to be explored, as well as the opportunities available to engage with the National Housing Delivery Fund and the National Housing Bank.