• 95% of respondents fear that PGS will fail as the Development Land Tax did
• Only 10% of respondents welcome PGS
• 81% fear that PGS will not deliver more funding than section 106

Research conducted among local authority property professionals at an industry event (21/09/06) revealed that only 1 in 10 of the respondents welcome the introduction of the proposed Planning Gain Supplement (PGS), with 95% of those responding fearing that PGS will fail in the way that the Development Land Tax did in the 1970’s.  

Many respondents share similar fears to their developer counterparts on the other side of the negotiating table, with 76% believing that PGS will not encourage more land to be brought forward for development.  In terms of revenue generation, 81% of respondents did not feel that PGS would deliver more funding for local infrastructure than section 106 has done, and yet 97% asserted that it was critical that it did generate as much investment in the community as the current regime does. 

Interestingly many respondents (85%) expressed a fear that smaller local authorities may lose out under PGS, while 80% also felt that administration processes and costs wouldn’t be saved at a local level.  On a more positive note 42% believed that PGS would enable quicker negotiation of planning gain.  This is perhaps a reflection of the core issue that still frustrates many local authorities and developers alike; the speed at which section 106 agreements currently tend to be negotiated.

Nick Millard, partner at Bruton Knowles comments on the findings, “These results are not wholly surprising when you consider the many potential pitfalls and concerns that have so far been raised by property professionals, over the proposed introduction of PGS.   Last week’s report by Knight Frank highlighted the very real risk that PGS will not generate as much revenue as the current planning gain regime, and our local authority respondents largely agree with this.  Some with long memories are also likely to have lived through the application and collection of the Development Land Tax which proved cumbersome, unpopular and in the end financially unviable.  In its last year of operation it is reported to have cost as much to collect as it raised in revenue.” 

Respondents also highlighted local authority concerns over the ongoing government reform of the planning system.  Within the context of appraising the Barker Review of Land Use Planning, 95% agreed that there is still a need for more reform but 92% called for more support for local authorities to implement any further change.  Although broadly calling for more reform, 90% of respondents also recognised that this could inhibit development.  Finally an overwhelming number (86%) do not anticipate that the new strategic planning environment will encourage better development for communities.

Peter Allinson, chief executive of commercial property and planning specialist law firm, Davitt Jones Bould, adds: “The planning system has undergone more upheaval in the last few years than it has in the last few decades. As always, it is the local authorities who will be left to implement any further changes and it is essential that they are given the support they need.”

Over 100 delegates gathered in Bristol at Ashton Court Mansion for the Local Government Property Conference organised by Bruton Knowles, law firm Davitt Jones Bould and barristers Kings Chambers.

For further information about Davitt Jones Bould or Kings Chambers please visit:

www.davittjonesbould.co.uk

www.kingschambers.com