Why the Planning Gain Supplement was dropped by the Govt

Mark mark at tlio.org.uk
Tue Oct 16 13:54:52 BST 2007

Re: the last email I sent out about the removal of the Planning Gain
Supplement legislation, I now send out this retraction as to my incorrect
interpretation that developer's self-interests stopped these proposals in
their tracks. Infact, opposition/reservations were more widespread. The
legisation has been replaced with something else, which I also did not
even mention.

Instead of the Planning Gain Supplement, the Government are proposing to
implement alternative legislation whereby local councils can apply new
planning charges to new development alongside negotiated contributions for
site-specific matters (the existing practice of laying down Section 106
agreements). As the government says, the charges will be used to finance
the infrastructure proposed by the development plan for the area,
including regional and sub-regional infrastructure.

Reasons why Planning Gain Supplement was dropped by the govt:

Planning and development interests were either opposed or wary of the
proposed Planning Gain Supplement (PGS), suggested by Kate Barker in 2006.

Local authorities were concerned that opting for PGS would reduce their
ability to negotiate local community benefits. Councils have yet to be
convinced that the most of the proceeds from the tax will be distributed
by the Treasury to help the immediate area affected by the development.

The Planning Officers Society (POS) were opposed to the PGS on the grounds
it would be part of the national taxation system and not targeted enough
at local requirements. The POS believes a tariff system is a better way of
ensuring local infrastructure and community needs.

The Royal Town Planning Institute has warned of a danger that those
communities most in need of infrastructure investment, particularly those
with failing markets, will lose out to those with development pressure
with a consequent overheating of the local economy for the latter areas.
They pointed out that revenue should not be at the expense of affordable
housing, and should be retained and used for the benefit of the local

According the Royal Institution of Chartered Surveyors, the proposed land
tax risked stifling housing and business development. Like much of the
property and development sector it favours a tariff system and argues that
if PGS is brought in it should only be for large-scale scheme with the
section 106 system retained for smaller developments.

Info taken from: New development tax proposals face an uphill struggle
Source: Planning Portal
Ref: www.planningportal.gov.uk/england/professionals/en/1115313894505.html

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