Public Finance, June 2nd-8th 2006, p.26-27
Article presents a critique of the government’s proposed Planning Gain Supplement (PGS), a tax that will capture a portion of the profits from new developments to fund the supporting infrastructure. The PGS is predicated on the assumption that there is a significant, one-off increase in land values when planning permission for development is granted. This is the case only with greenfield sites and does not apply to brownfield sites where demolition and costs of remedial works can wipe out any immediate gain. Moreover, the PGS will be a national tax, and only a portion of it will be returned to local authorities to fund infrastructure improvements. The author proposes that the PGS should be applied to greenfield developments only. Existing S.106 agreements should continue to be used to negotiate developer contributions to infrastructure and social and environmental provision on brownfield sites.
Axis, vol.59, May/June 2006, p.14
Houses without infrastructure create dysfunctional communities, so facilities such as roads and schools need to be built to support developments. To fund necessary infrastructure, the Treasury has put forward proposals for a Planning Gain Supplement which would see developers taxed on the uplift in value accruing to their sites once planning permission had been granted. Alongside the PGS, a number of growth areas have developed tariff schemes under which builders are charged a flat fee for each house constructed. The South West of England Regional Development Agency has suggested setting up a regional infrastructure fund into which receipts could be paid.
Public Finance, June 2nd-8th 2006.
There is a shortage of affordable housing for rent, especially in London and the South East of England. The government has responded by allocating £3.9bn to the Housing Corporation to develop 84,000 affordable homes in the South East over the next two years, plus funds for 6,000 new affordable homes in rural areas. However, this is not enough to meet massive levels of need, which also vary locally.
Axis, vol.59, May/June 2006, p.11
Reports that the Commons Environmental Audit Committee has attacked government plans to build 200,000 dwellings per year in South East England by 2016 compared with the present 150,000. The committee concludes that the plans are at risk of failure because the government has acted tardily, half-heartedly or tight-fistedly (or all three) on water supplies, and sustainable infrastructure to support new housing.