PGS / roof tax / S106

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Mark from This Land is Ours sent round the pnuk list a resume on why the government has rejected PGS. I replied and outlined a better alternative….. (NB if you want to comment send an email to m.edwards [at] ucl.ac.uk because I have switched off the comment facility in this blog to reduce spam.)


Mark mark [at] tlio.org.uk

That’s a helpful resume. Is it your copyright, so could we have it on the PNUK web site or not (or link to it)? [ and to that he replied: “the write-up summary about the rejection of the Planning Gain
Supplement, most of the info is not my writing, but is from info taken
from Planning Portal
Ref: http://www.planningportal.gov.uk/england/professionals/en/1115313894505.html ]

My own view is that BOTH PGS and the Tariff/ roof tax are deeply bad because
(i) of those arguments that a single rate set nationally would not work…and so on
(ii) like S106 they tax development only at the moment of Planning Permission when developers are feeling poorest and miss all the inflation-related and other sources of value increment over the life of the development. That’s the thing we should be taxing. I have expanded this argument in a paper on Thames gateway which is coming out in a book (edited by Phil Cohen and Mike Rustin of UEL) in January. I can send the chapter to anyone who wants it on request….

Michael

On 16 Oct 2007, at 14:25, Mark wrote:

Do people broadly agree with the new proposed charge on development being
proposed? Does this mean the Planning Gain Supplement is now shelved? Are
their alternatives to the PGS legislation? Has anyone ever suggested a
small windfall tax on land values, say every 10 years?
Mark

Alistair Darling’s announcement last week that the government is to
consider proposals put forward by an alliance of developers and
homebuilders including the British Property Federation, Home Builders
Federation, Major Developers Association and London First as an
alternative to the planning gain supplement (PGS) could at first glance
look like the intervention of housebuilders and developers lobbying to get
their own way (avoid larger cuts in their profits). Infact,
opposition/reservations about the PGS were more widespread, including the
criticism from local authorities, the RTPI and the Planning Officers
Society.

The alliance suggested a system of standard planning charges or tariffs
set locally to reflect regional needs instead of the proposed PGS, which
imposes a tax on the increase in land value following the granting of
planning permission. Under the new proposal, local councils would be able
to 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
area.

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: http://www.planningportal.gov.uk/england/professionals/en/1115313894505.html

*********************end********************
Michael Edwards, The Bartlett School, UCL
22 Gordon Street
London WC1H 0QB
blog: http://www.michaeledwards.org.uk has comments on the government’s planning white paper, August 2007; on Crossrail, September
m: +44 (0)7813 1944 01
f: +44 (0)20 7679 7502
admin: +44 (0)20 7679 4797 or 7501 Judith Hillmore, and Diana Sprot

Author: Ed

staff in the Bartlett School of Planning and cooperating with others in UCL and with the Just Space Network to support London citizens' inpu

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