PLANNING GAIN SUPPLEMENT BILL

The purpose of the bill is to:

• Create a major new levy to capture a modest portion of the land value uplift created at the grant of full planning permission and to generate additional revenue for investment in local and regional infrastructure.
• Alongside the introduction of a PGS, planning obligations in England will be reformed to help speed up the process, providing greater certainty for developers, and transparency for communities.

The main benefits of the bill are:

• As part of a package of reforms designed to increase the supply of land brought forward for housing development, PGS will increase the amount of money available for local infrastructure to support housing growth. The incidence of PGS is expected to fall on landowners.
• PGS would capture a modest portion of the increase in land value that occurs when full planning permission is granted, whilst preserving incentives to develop.
• PGS funds will be entirely hypothecated to support new infrastructure (in England). On present plans at least 70% of PGS revenues would be returned (in England) to the Local Planning Authority which granted the planning permission, to fund infrastructure projects which support the delivery of the Local Development Framework; the remaining PGS revenues will fund regional infrastructure in support of the Regional Spatial Strategy (in London, the London Plan).

The main elements of the bill are:

• The creation of PGS - including defining the scope, rate and necessary administrative functions of the tax.
• Allocation of PGS revenues - stating how PGS funds will be recycled throughout the UK and to whom;
• Scaling back of planning obligations in England - on the introduction of PGS planning obligations would be reformed in England to cover only affordable housing and issues directly related to the viability of development site (such as site access roads, etc.)

The Bill would apply to:

• PGS would be a national tax applying across the UK.
• PGS revenues generated in the Devolved Administrations would be returned to the country in which they were generated. The use of PGS funds in the Devolved Administrations would be determined by the relevant administration.

Related Documents:

• Consultation paper on the principle of a Planning Gain Supplement, published alongside the Pre Budget Report 2005.
• Detailed consultations on paying PGS, PGS valuations and revised planning obligations in England published alongside the Pre Budget Report 2006.
• Policy statements in Chapter 3 of Budget 2007 on the design of PGS.

Existing Legislation in this area is:

• The Planning-gain Supplement (Preparations) Act 2007
• Section 106 of the Town and Country Planning Act 1990 (as amended)

Comments:

If you have any comments on the draft programme or individual bill being proposed, you can email them to:

legislation@commonsleader.x.gsi.gov.uk