Local authority collection and distribution of Government's proposed Planning Gain Supplement (PGS) will deliver the greatest benefits to communities, the South East England Regional Assembly told MPs this week.

PGS - a proposed infrastructure levy on new development - will work better if local authorities can direct it towards local planning priorities and integrate it with funds from an updated Section 106 system, which also provides infrastructure funding.

A report for the Assembly on the benefits of local PGS administration over the Government’s proposed centralised system has been sent to the House of Commons Communities and Local Government Committee.

The Assembly also argues that the Government’s proposal to exclude transport, health and education expenditure from the Section 106 agreements is a mistake. Local authorities must have the flexibility to use these agreements for investment to meet all community needs.

Cllr Keith Mitchell, Chairman of the Assembly, said:

“The Planning Gain Supplement must be part of the planning system so it ‘works and lives’ alongside Section 106 agreements and should not be included in a cumbersome central tax regime. Empowering local authorities in this way will support their role as community leaders and help ensure they deliver properly planned development supported by adequate infrastructure.

We can only give confidence to a community about growth if concerns about infrastructure are addressed. This can only happen if the levy is part of the planning system, collected and distributed by local authorities in accordance with a clearly defined local implementation plan.”

The study also highlights the potential of a Regional Infrastructure Fund - an idea put forward by the region as part of its advice to Government on regional spending earlier this year. A Regional Infrastructure Fund would add to the investment available by forward-funding infrastructure to support new development and attracting additional private sector finance.

Contacts

Lesley van Dijk, Assembly PR Executive - 01483 555223

Heather Bolton, Assembly Communications Director - 01483 555220

Notes to editors:

1. The Assembly commissioned Hewdon Consulting to carry out research into the proposed Planning Gain Supplement (PGS). The report can be viewed on the South East Plan website
2. The study suggests that PGS could be collected in the same way as business rates.
3. PGS could raise £4 billion a year for the South East over a 20-year period (based on 28,900 homes a year).
4. It is expected that the rate for the levy will be set nationally.
5. The South East England Regional Assembly is the "voluntary regional chamber" for the South East. It was established in January 1999 to give a representative voice to the South East region, which covers Berkshire, Buckinghamshire, East and West Sussex, Hampshire, Isle of Wight, Kent, Oxfordshire, and Surrey.
6. The Regional Assembly is made up of 112 members including elected councillors nominated by the region's local authorities and 37 representatives from other sectors of the community (including business, trades unions, education, housing, health, sports, culture, tourism, faith groups, environmental, community and voluntary organisations) as well as the New Forest National Park Authority.
7. The Assembly has three areas of core business:
• It is the representative voice of the South East, engaging and representing its member organisations and, through them, the wider public.
• The Assembly has a specific role under the Regional Development Agencies' Act 1998 to ensure the accountability of the South East England Development Agency (SEEDA) to the region.
• The Assembly has been the Regional Planning Body for the South East since April 2001. It has responsibility for proposing strategic planning and transport policies to Government.

Last updated: 21 August 2007