Tariff heralds shift over infrastructure

Councils will gain more local infrastructure delivery powers under the tariff-based system announced by chancellor Alistair Darling in this week's pre-budget report.

The government has also scrapped plans for the controversial planning gain supplement (PGS) to support infrastructure in favour of the tariff, which will be brought forward in the forthcoming planning reform bill.

Housing and planning minister Yvette Cooper said the tariff mechanism will back up section 106 agreements and £1.7 billion of infrastructure investment in growth areas.

Residential and commercial development will be liable to pay a planning charge subject to a minimum threshold, she explained.

The tariff will be based on a cost assessment of infrastructure needs in development plans. The plans should cover the costs of major sub-regional and regional infrastructure, Cooper said.

She added that local tariff policies, which must be tested via the development plan process, will capture more planning gain and provide a fairer way of securing developer contributions.

Tariffs have already been tested in Milton Keynes and Swindon. The British Property Federation and Home Builders Federation welcomed the move, insisting that PGS had "threatened to hinder development".

CB Richard Ellis head of planning Stuart Robinson said: "The government has listened to reason. The tariff should enable councils to vary the charge to reflect differences between areas."

But the Town and Country Planning Association warned that developers could favour areas where the tariff is lower, while councils could set tariffs to encourage or discourage development.

The RTPI and Planning Officers Society said the system must be properly resourced. RTPI policy director Rynd Smith noted: "We will continue to meet the DCLG so the tariff works in a way that is not too complicated."

- The 2007 Pre-Budget Report is available at PlanningResource.co.uk/doc.

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