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A COMMITTEE OF MPs has backed government plans to levy a new planning gain supplement (PGS) on new development while retaining a scaled-back system of section 106 planning obligations for new homes.

A report (go here to download it as a pdf) from the communities and local government select committee also recommended that the government use planning guidance and target setting to ensure that the supply affordable housing is not jeopardised in favour of revenue raising. They also called for local authorities:

• to be given the power to require contributions to affordable housing from a much wider range of developments, not just residential ones
• to be able to use PGS money for affordable homes where appropriate.

The MPs also called for more research into the huge gap between the value of section 106 commitments agreed under planning approvals and the value actually delivered. In 2003/04 developers entered into obligations worth £1.2 billion but only delivered £600 million. One reason for this is a big variation in performance in different parts of the country.

The committee rejected calls for certain types of development to be exempt from the PGS, arguing that this would lead to market distortions. This will disappoint the National Housing Federation, which had argued that housing association schemes should be exempt.