Gordon Brown's planning gain supplement (PGS) proposals show a ‘lack of understanding' and could affect the economy. This was the reaction from the British Property Foundation in response to a consultation into PGS, which has been proposed by the Government. The concept of PGS is that a ‘modest' proportion of the land value uplift accruing to landowners at the grant of planning permissions could be captured and shared with the wider community. But the British Property Federation said the PGS or ‘new windfall tax' showed the Treasury's ‘fundamental lack of understanding' on the development process. A spokesman explained that schools, roads and community centres, currently paid for by contributions from developers, made under section 106 agreements, would lose funding with these local benefits taken over by central government. ‘The BPF has maintained all along that the PGS is not just unworkable but that it would negatively affect the economy,' said BPF chief executive Liz Peace. ‘At a time where ministers are setting out numerous targets to improve the supply of housing and encourage sustainable development, it seems inconceivable that so much public money can be wasted consulting on a tax which successive Labour governments have tried and failed to introduce because of its impracticality.' Mr Brown has stated that PGS would not be introduced earlier than 2009 and would be levied at a ‘modest' rate across the UK. He said at least 70% would be ploughed into local priorities and returned to the local authorities in which it was generated. Two further government consultations about the design of PGS are ongoing, with results due back later in the year.
