An influential parliamentary select committee has this morning backed government plans to introduce a planning gain supplement
The Communities and Local Government Committee has concluded that planning gain supplement – a tax on the uplift in value of land following planning consent - could result in a number of benefits.
However, the committee said there were also concerns about the proposals, mostly about the implementation of the policy rather than the principles behind it. It has proposed a number of refinements to the plans, and also advised that the government do more analysis of the existing Section 106 regime.
For local authorities, the benefits include an opportunity to plan and fund infrastructure provision in a more strategic manner, following the lines of local development plans and regional strategies.
Local authorities could also benefit from additional cash, as well as savings resulting from a less demanding planning obligations regime.
For developers, the committee said that potential advantages include greater certainty and a less demanding planning regime.
Central government may also benefit, the committee found, in getting additional funds that could be spent on the infrastructure required to deliver its commitments on housing supply.
But the committee said that there were concerns. It said there were significant risks if the details of implementation are not ‘precisely tuned’ and do not take account of the many justifiable concerns raised by the committee’s witnesses.
Simplicity in its administration and clarity in its application were essential to the success of PGS.
Dr Phyllis Starkey MP, chair of the committee, said ‘The committee and the government agree that additional resources for investment in infrastructure need to be found if the government is to realise its ambitions to increase the supply of housing. The committee’s analysis shows that a planning gain supplement represents one way of achieving this.'