Local authorities could spend this money on new community facilities, infrastructure improvements or affordable homes, including for key workers. Keith Hill said: "The planning system has the potential to deliver so much for the community, from affordable homes to health centres to parks and open spaces. The problem is the system is simply too slow and fails to deliver what's needed when it's needed. We need a radical solution to simplify and speed up the process."

He said developers could still negotiate a traditional section 106 agreement, "but if they want greater speed and certainty they can pay the charge, leaving them free to get on with things and the local authority the resources to spend on community," he said.

Under the proposal local authorities must set out details of the charge in their local development plans. This would ensure all the parties involved would know the cost of the charge before an application is submitted.