Industry welcomes scrapping of PGS

28 Feb 2011

Policy area: Planning

A coalition of developers and homebuilders today welcomed the Chancellor’s announcement of further consultation on a tariff-based alternative to the proposed Planning Gain Supplement (PGS) to fund regional and local infrastructure.

Below is the minister's statement on planning, along with the joint consultation response and letter to the chancellor which sparked this change.

An alliance of the Home Builders Federation, British Property Federation, Major Developers Group and London First had responded to the Prime Minister’s call for industry to devise a workable alternative to the Planning Gain Supplement to be considered ahead in time for the Pre-Budget Report.

The alliance had urged the Government to introduce a system of tariffs which would be set locally to reflect regional and local infrastructure needs identified through Regional Spatial Strategies and local plan making.

Liz Peace, Chief Executive of the British Property Federation, said:

“We know from the more than twenty existing local tariff schemes that they can be made to work in a way that secures local support and retains industry confidence while delivering much-needed infrastructure investment to underpin development.

“We hope that the property industry and government can move quickly to agree the detailed implementation of a local tariff-based system.”

Stewart Baseley, Executive Chairman of the Home Builders Federation said:

We welcome the Chancellor’s recognition that the proposed Planning Gain Supplement was unworkable and we look forward to working with Government to develop further a tariff-based approach to help meet infrastructure costs through developer contributions. To deliver the much needed 240,000 new homes per year it is vital we agree a workable system to raise additional funds for necessary infrastructure.’

Sir Stuart Lipton, on behalf of the Major Developers Group said:

‘PGS threatened to hinder development. In consulting on a tariff-based alternative the Government have accepted the need to develop a system that carries the confidence of major developers and delivers much-needed infrastructure investment.’