OUT-LAW ANALYSIS 10 min. read
Development corporations are expected to play a significant role in the government’s new towns programme. Photo: Teamjackson/iStock
23 Jun 2026, 9:52 am
Development corporations have increasingly been identified as a critical pillar of the UK government’s new towns programme, which aims to support a new generation of large-scale communities across England.
In early June the UK government confirmed that a development corporation will be established to deliver thousands of new homes and infrastructure across Cambridge city and South Cambridgeshire, building on the £800 million already committed to boost connectivity in the Oxford-Cambridge Growth Corridor.
The announcement followed a recommendation issued last September by the New Towns Taskforce – a government-appointed independent expert panel – that said that development corporations should have a role in virtually every form of new town scheme.
Development corporations can help significantly in driving the necessary continuity and strategic direction of projects that span changing political cycles. Among the new towns earmarked for development, there are a number of brand-new settlements, already promoted new settlements, sustainable urban extensions and city centre regeneration new communities. Most new town areas will require different structures depending on a myriad of different factors, including their specific geographical location, and the capacity and needs of the local authority.
There are a number of different types of development corporation that can be created, including centrally-led, locally-led, and mayoral – all established under different legislative frameworks. While it may initially seem confusing, recent and proposed changes to the law are designed to minimise the difference between the different types, with the focus being more on who has oversight of the corporation rather than what it can or cannot do.
The Planning and Infrastructure Act 2025 empowered development corporations to direct or take over National Highways’ role in specified circumstances. However, the timing of both the escalation and resolution process must be prompt and not involve a planning inspectorate, inquiry-style resolution procedure. There are further calls to create a government-backed dispute resolution mechanism to help unblock issues early.
Effective from 18 February, several new sections of the Planning and Infrastructure Act have come into force and greatly expanded the potential role for development corporations to deliver new town projects of all shapes and sizes.
Section 100 of the act permits any development corporation in England to deliver large-scale developments including new settlements or urban extensions on brownfield or greenfield sites. S102 ensures that all development corporations have the same standardised objectives, while s103 can provide a standardised list of infrastructure development.
S101(6) to (9) are also now in effect and govern the overlap of mayoral development areas (MDA) with other designated new town or urban development areas.
Once all of the relevant parts of the Planning and Infrastructure Act and the Levelling-up and Regeneration Act 2023 are fully implemented – which is expected in early 2027 – there will also be an easier route to establish locally-led development corporations, streamlining the process where there is clear support locally for the proposal.
Development corporations can be very successful in a number of circumstances, but their establishment should only be prioritised where they can deliver the most significant benefits.
Certainly, for schemes where the infrastructure costs clearly require a co-ordinated approach, doing this without a development corporation would prove extremely challenging. They can also be beneficial for schemes faced with multiple landowners who are not likely to readily ‘equalise’ the infrastructure cost burden share required.
Centrally-led development corporations can be especially useful when local planning authorities do not have relevant experience or expertise of developing new towns or communities, have a track record of failing to deliver, or where their leadership is characterised by political instability.
While development corporations are useful organisations in a range of cases, they are not always the most appropriate delivery vehicle. In some instances, other delivery models may be equally or even more suitable. There are plenty of examples where public-private partnerships and joint ventures have and can operate to deliver new towns or communities and other large-scale projects, or when private sector master-developers or large housebuilders have successfully delivered new town or community projects. The key is choosing the most effective tool for the particular circumstances rather than to apply a blanket approach of implementing a development corporation for all new towns and large-scale projects.
As separate public bodies in their own right, development corporations are run by a board comprised primarily of independent board members, but with representation from local authorities and other public bodies where appropriate. Depending on the type of development corporation, oversight is provided by local councils, the mayor and their combined authority, or central government.
We have identified a range of delivery models that can be tailored to the specific requirements of each development.
In this model the development corporation acts as the body delivering the infrastructure and development platform and creating serviced development parcels which are then sold to individual builders to deliver.
We anticipate that funding would primarily come from the Ministry of Housing, Communities and Local Government (MHCLG) with limited private sector funding, but potentially other funding or guarantees.
This structure would give the development corporation the autonomy to self‑deliver certain aspects of the project, with appropriate oversight – which varies across the different types of development corporation – and would enhance the overall level of transparency of the entire process.
We envisage three additional potential partnership options with the master developer.
In the first instance, master developers could form a joint venture with a development corporation to lead a project. This model would operate with the same oversight structure as outlined above, but the joint venture would lead the project and take on some of the financial burden.
A second option would allow an even more flexible funding structure by allowing an infrastructure contractor to take on some of the financial burden of preparing infrastructure for the project. Additional funding could also be provided by an institutional investor in addition to the expected funding from the MHCLG, other potential public sector sources and limited private sector funding
In a third scenario, a development corporation would join forces with a local authority to create an ‘integrated delivery partner consortia’ or partnership. This would also allow for potential additional funding and asset management income from the commercial delivery partner, with the option for more than one such arrangement across the lifecycle of a project.
Existing examples of a master developer partnership model include the MADE partnership, in this instance with Homes England rather than a development corporation, which was launched in September 2024 to accelerate the delivery of large-scale housing projects across England backed by an initial £150 million in private equity funding.
Ultimately local authorities, mayors and the government will decide whether a development corporation is right for their scheme based on a number of factors.
An appraisal methodology as part of a new towns or communities delivery ‘toolkit’ could go some way towards helping them determine the best delivery model for their scheme’s particular requirements.
This toolkit could outline the various options for delivery structures, their respective pros and cons and advice on when each may present a good option for a delivery structure, without stipulating a required structure to follow. This would help stakeholders make informed choices to maximise private‑sector contributions and reduce their reliance on limited government funding.
The toolkit should also contain guidance on the establishment of interim vehicles or shadow development corporations to ensure time is not lost in the delivery programmes for the relevant new town or community waiting for the lengthy process to be completed for the establishment of a new development corporation.
The base structures of the local authorities governing the different potential new towns schemes are varied, ranging from mayoral combined authorities to unitary and two-tier district and county authority areas. Where a development corporation is deemed necessary, each of these structures will require different approaches and interventions to help drive projects forward.
Local or combined authorities with an appetite to deliver at scale that have dedicated resource to implement and drive through the vision present the strongest foundation for an effective and successful outcome. This can be through working with existing private sector developers with existing land interests based on robust planning policy and, as appropriate, contractual partnerships.
Other local authorities may have more limited capacity, however, and this is where centrally-led development corporations will prove critical to getting projects off the ground and can prove to be an effective tool for delivery of large-scale projects.
Changes at local government level as a result of local elections can also cause delays in long-term new towns or communities projects, particularly if a change in political control occurs that leads to local plans or major projects being delayed or re-visited. Development corporations are not totally immune from the effects of local electoral change, but typically they weather the changes better than other delivery routes as they are a product of statute and operate independently of the local authorities. While national political change can impact funding commitments to development corporations, once established, development corporations are typically left by successive governments to continue their mandate such as was the case with Ebbsfleet, Milton Keynes and other new towns.
We often see political mismatches between mayors and local government hinder access to funding and slow projects down. In some instances, it may prove more expedient for a mayor to take control of a project and set up a mayoral development corporation (MDC) under a new combined authority.
While this is a different type of development corporation established under the Localism Act 2011, the practical questions about how it would be run commercially and how it would be funded remain the same as for the other models.
Due to the varied differences – and challenges – the different proposed settlements present, it is clear that a more centralised, cross-Whitehall approach will be required to provide greater consistency across each new towns’ development.
This coordination across Whitehall will be needed regardless of whether development corporations themselves are centrally or locally-led vehicles, or if alternative delivery structures than development corporations are utilised to deliver the new towns and other large-scale projects.
Funding and taxation, planning policy, infrastructure priorities and resolution of challenges such as providing timely water supply and foul sewage capacity are all key matters that will require cross-departmental working to ensure a joined up, effective approach to implementation across multiple political cycles.
The taskforce has recommended establishing a new central government new towns or communities team with its own powers to direct stakeholders and resolve disputes between statutory consultees, governmental bodies and agencies, local government bodies, local authorities, public bodies and agencies, and quasi-governmental bodies.
Such an approach would empower this body to intervene and direct local authorities, mayors, utility providers and statutory consultees in a consistent manner on infrastructure priorities, funding and requirements for new towns or communities; as well as requiring statutory undertakers, Highways England and other relevant bodies to plan, design and deliver the infrastructure.
A central government team consisting of representatives from different Whitehall departments would undoubtedly provide much-needed directional powers and dispute resolution interventions that could step in and unblock new town or communities’ delivery roadblocks before it is too late. Interventions would be triggered through requests of participant parties, including applicants and promoters who are being affected by the ongoing dispute or delay, as well as local planning authorities.
This centralised approach would also ensure greater consistency of departmental priorities regarding the delivery of the new towns or communities and cross-collaboration between governmental departments. At present, this is something that is often missing and can cause inopportune delays. Such an approach would also help engage civil servants and ministers facilitate the continuation of activities and provide stability during election cycles and periods of political change.
Safeguarding directions have traditionally been used for linear infrastructure projects like roads and railways, where the development corridor is narrow and clearly defined. Safeguarding can help facilitate coordinated delivery and stop fragmented proposals that don’t secure delivery of community infrastructure or that impede the overall comprehensive project’s vision. They can also give councils considerable leverage when they want to acquire land to deliver the comprehensive development, either voluntarily or through compulsory purchase.
However, applying safeguarding to new towns is far more complicated since the ‘red edge’ – the primary boundary identified on a location plan to support a planning application – is much broader, land uses are more varied, and the direction risks blanket‑blocking development that could be compatible or even beneficial in the short term.
Safeguarding only makes sense for very early‑stage new town areas. While in some instances safeguarding directions may be useful for brand new proposed locations for new towns and settlements, they are often regarded as a blunt tool that risks sterilising or even stalling schemes that are already proposed or coming forward.
The government’s New Towns Draft Programme consultation, which closed on 19 May, does not expressly refer to safeguarding. However, draft new towns national planning policy that accompanies the consultation states: “Development proposals in identified New Town areas should be refused if they would have a clear adverse effect on the proposed scale, location or phasing of New Town proposals. Development proposals outside of New Town areas should not have an adverse impact on the delivery of New Towns…”
This draft policy appears to achieve a similar aim as a safeguarding direction although arguably is not as extensive or constraining. Consequently, some councils may still consider the use of formal safeguarding directions or development plan policy wording seeking to achieve a similar aim.
In doing so, due consideration needs to be taken to adapt how safeguarding directions are currently used or structured and how this can be reapplied in the new towns’ context. The government’s draft planning policy can help this as it seeks to protect new town locations. However, further guidance on the use of safeguarding directions for new towns and communities would be useful and should set out example content for directions.
In the meantime, there could be considerable benefits of permitting some types of development associated with ongoing existing uses – such as renewable energy projects like solar farms – while a safeguarding direction is in force. This would also be beneficial to prevent any land being economically sterilised for a prolonged period.
For a copy of Pinsent Masons’ new towns recommendations report, please contact Isla Cross.
Written by
Robbie Owen
Partner and Parliamentary Agent, Head of Infrastructure Planning & Government Affairs
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