Race is on to win developer cash

As planning gain stalls, point-to-point promoters have opened the stable doors to public and private sector deals, writes Hugh Roberts.

Government plans for the planning gain supplement (PGS) had been grinding forward so slowly that many authorities - particularly in the South East where development gains are greatest - started to do side deals with the private sector.

Now the government has decided to shelve its betterment levy plans, at least for the time being. But the stable door has already been opened by the point-to-point promoters. The sleek thoroughbred of a national PGS has bolted. But is it completely out of the race?

Authorities in some of the hottest locations, such as the Thames Gateway and others identified in the sustainable communities plan such as Milton Keynes and Ashford, have forged deals with developer partners or are endeavouring to do so. There are too many examples of a sensitive nature to mention individually while the negotiations continue.

Planning gain and local tariffs seek to achieve different objectives. The first attempts a betterment tax on uplifted land values, the second would mitigate impact on existing infrastructure. The DCLG was increasingly making funding commitments that were contingent on a local authority's introduction of a parallel system of financial contributions from developers, which may undermine the case for a PGS.

So which horse will stand more chance of winning the prize of optimising development gain without killing investment incentive? The point-to-pointers of the national tariff have impeccable bloodstock lines in both the Treasury and the DCLG, but have suffered an interminable training programme. Their appearance under starter's orders has been delayed yet again.

Can one size ever fit all? That may be the crucial point here which the DCLG and the Treasury are coming to appreciate. Every development context is different, not only in terms of buoyancy of market conditions in each town or region but the cost of local utilities and social infrastructure. Some areas enjoy relative advantage in terms of provision and do not need or want to pursue developers for a high tariff. Others are short of vital services or encountering challenges such as increased estimates for climate change-induced flood control costs or major road network upgrades. They need all that they can get.

But what is the price of local democracy? A national tariff would represent a piece of power-centralising legislation - hardly in line with the government's claim for delegation to maximise local accountability for development.

So where do you place your bets in the races to come? On the PGS Classic, where the runners' appearance is delayed yet again as training continues? Or in the local point-to- points, where the country horse fairs are under way and regional conditions are crucial to trading local tariffs between owners, jockeys and punters?

Despite being sympathetic in principle to a properly prepared PGS, I back the point-to-pointers, if only because they are under way while the PGS is handicapped. Could the government's thoroughbred system, if introduced, challenge the legality of the local horse trades now occurring and their subsequent replacement with the single tariff? This would be in spite of vast expense and delays in achieving the inevitable locally forged agreements. It's not on the agenda yet, but surely it is a source of uncertainty for racing enthusiasts.

Hugh Roberts is director of planning, regeneration and urban design at Colin Buchanan.

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