Memorandum by Business in Sport and Leisure
(BISL) (PGS 02)
1. INTRODUCTION
1.1 Business In Sport and Leisure (BISL).
An umbrella organisation for over 100 companies in the private
sector sport and leisure industry and many consultants who specialise
in this field. Members of BISL listed on the London Stock Exchange
have a combined market capitalisation in excess of £40 billion.
1.2 Business In Sport and Leisure has a
long established working group on property and land-use planning.
We respond on a regular basis to ODPM consultations on such issues
as Planning Policy Guidance (PPGs), Upward Only Rent Reviews;
Business Rates Revaluation; Transitional Relief, Planning Obligations
etc.
1.3 BISL is pleased to be offering evidence
to the ODPM Select Committee for this Inquiry and would very much
like to be asked to give Oral Evidence.
1.4 The sport, leisure and hospitality industry
is hugely concerned that this new development tax may seriously
damage the future expansion of our sector and be a barrier to
economic growth. Our principle concerns about the introduction
of such a tax and the proposed mechanics follow, but it should
be noted that previous attempts to capture planning and development
associated gains have been counter-productive and ultimately failed.
1.5 BISL has concluded that the Planning
Gain Supplement should be introduced only for housing to encourage
local authorities to release sites for housing. However, to prevent
a bidding war to local authorities where high value schemes would
be chosen instead of low value schemes which would include sport,
leisure, hospitality and tourism, BISL believes that Section 106
Agreements should be retained for our sector. Our comments below
explain our concerns for the health of the sport, leisure, hospitality
and tourism industry should this tax be introduced and our concerns
about the provision of sports facilities at a time when the Government
is so keen to encourage physical activity.
2. PLANNING GAIN
SUPPLEMENT FOR
HOUSING OR
THE REST
OF THE
INDUSTRY?
2.1 The Barker review of housing proposed
this new Planning Gain Supplement to capture the uplift in value
for sites given planning permission for housing and so ensure
the required infrastructure. BISL is seriously concerned that
extending PGS to other forms of development will be both complicated
and may inhibit the ability of sectors like leisure and hospitality
to grow further.
3. DISINCENTIVE
FOR LOW
VALUE DEVELOPMENT
3.1 PGS will encourage local authorities
to give planning permission and in Local Development Frameworks,
zone sites, for high value development which will offer them the
greatest amount of PGS.
3.2 In terms of leisure, this could constrain
leisure, hospitality and tourism developments. The list below
shows the type of facilities operated by BISL which could all
fall under the heading of "leisure".
— Health and Fitness to Swimming Pools.
— Pubs, Bars and Nightclubs.
— Cinema and Ten Pin Bowling.
— Bingo, Betting and Casinos.
— Motorway Services to Fast Food.
— Greyhound Racing to Race Tracks.
3.3 Leisure developments do not generate
the revenue of retail, housing or commercial developments and
cannot afford to pay high prices for sites to develop.
3.4 The leisure, hospitality and tourism
sector currently contribute 4.4% of GDP and employ 2.2 million
people. ODPM are in the process of publishing a Guide to "Good
Practice for Planning for Tourism". One reason for this guide
is that it widely acknowledges that local authorities do not identify
sites for leisure or even have policies to support leisure or
tourism development. BISL believes that this PGS will restrict
such development still further. As the consultation stands local
authorities will be looking to encourage housing developments
which provide greater funding through PGS, rather than leisure
developments which produce very little.
4. NOT FOR
PROFIT SECTOR
4.1 BISL is concerned that PGS could inhibit
the ability of not for profit organisations, particularly in the
sports sector, to develop their own sites and/or bring them back
to sustainable economic use in their continued ownership. A disused
property will have a low value, but that value would increase
if it was put to any economic use. Not for profit organisations
would not be able to invest in this development if they had to
pay PGS on top of other costs.
5. THE CURRENT
COST OF
SECTION 106
5.1 Section 106 agreements are common and
already add considerable costs to development. In housing this
is exacerbated by the cost of providing social housing. There
is a real concern that adding PGS will reduce development, particularly
for sectors like leisure where developers' gain is lowest.
6. SECTION 106
AGREEMENT'S
CONTRIBUTION TO
SPORT
6.1 In the past leisure development has
often included, as part of a Section 106 Agreement, the provision
of sports facilities like community swimming pools, sports halls
and playing fields. There is a real danger that the replacement/alignment
of PGS and Section 106 will remove this element of community funding
to the detriment of the local community. Given that the provision
of sport is not a statutory service for local authorities the
provision of these facilities will not be at the top of their
priority list for spending any income gained from PGS. Moreover,
if revenue from PGS is administered regionally, genuinely local
causes, such as sport and leisure, are less likely to benefit.
At a time when the cost of upgrading local authority sport and
leisure facilities is put at in excess of £500 million, (required
immediately over the five years from 2002) and when there is a
nationally accepted need for facilities where people can be encouraged
to take more exercise, there is a real danger that funding for
sport and leisure facilities could be further depleted with the
introduction of PGS.
7. HYPOTHECATION
AND TRANSPARENCY
7.1 If PGS is to be introduced BISL believes
it should be hypothecated to local authorities to spend on priorities
determined by the Local Development Framework and Regional Spatial
strategy. It is essential that at the end of the year a public
record is available showing money collected and how it will be
spent.
8. VALUATION
CONCERNS
8.1 BISL has real concerns about valuation
definitions and what can and cannot be included in the assessment
of value. Often land changes hands for more than current value
with a "hope" value for future development. Will PGS
be based on current value or the actual purchase cost? Will PGS
apply to all projects which require planning permission or only
new development?
9. SITE CONDITIONS
9.1 It is often the case that planning permission
is obtained and a start made on site without full knowledge of
actual site conditions. If site conditions are found to be abnormal
and require costly remedial work, then PGS should be capable of
reduction and a proportion returned to the developer.
10. TRANSITION
10.1 Whenever this measure is introduced
there will be a period leading up to it which could be termed
transition, during which there will be few "valuable"
planning consents granted as planning authorities seek to defer
consents until after PSG comes into effect and applicants are
equally determined to achieve an earlier consent. If the PGS is
to be introduced BISL would suggest that at short notice it is
announced that all applications by a specified date will be exempt
regardless of date of determination and penalties imposed on authorities
who seek deferral by unjustified refusals.
11. IN CONCLUSION
11.1 Business In Sport and Leisure is concerned
that the PGS system will be complicated to extend to other forms
of development other than housing and could disadvantage the development
of sport, leisure and hospitality facilities. If PGS is to be
hypothecated to local authorities there will be an incentive for
the local authority to give planning permission for high development
value proposals. If PGS is only extended to housing developments
there will be an incentive for local authorities to develop more
housing. In both cases leisure development is likely to lose out.
11.2 One solution may be for PGS to be extended
only to housing and for the rest of the sector to retain Section
106 agreements. This would help the Government in its aim to increase
housing provision and reduce the incentive for local authorities
to encourage the development of other forms of high value commercial
and retail uses to the detriment of the leisure and hospitality
sector.
11.3 In any solution it is essential for
the continuing success of the sport, leisure, hospitality and
tourism industry that local authorities are encouraged by national
guidelines to ensure that such proposals are included in their
plans. We also believe that the proceeds of PGS or Section 106
should be used to provide adequate and up to date sport and leisure
facilities for the local community.
| 
