Brownfield regeneration funding gets creative

With grants seen as "a myth" and a newly proposed development tax favouring greenfield sites, funding brownfield regeneration requires some creative thinking. Making the most of existing funding sources came into focus at the International Clean Up (ICU) conference in Birmingham this week.


The Planning Gain Supplement (PGS) cannot be relied on to boost brownfield regeneration Ben de Waal of law firm Davis Langdon Crosher and James said, speaking at a seminar on Brownfield Regeneration: New Markets and New Incentives. Matching regeneration projects to the right grants was instead the way forward, he said.

PGS, the controversial development tax introduced by Gordon Brown in the last budget, would make the regeneration of greenfield sites more lucrative if it is introduced in 2008 as expected, said Mr de Waal:

“As greenfield sites are going to have a much higher increase in value, the PGS is actually like a hidden agenda to encourage developers to use greenfield sites.”

With brownfield sites, the planning gain is very small, and cannot deliver the sort of resources needed to reach the Government’s ambitious house-building targets.

“Whilst there’s an intention to encourage brownfield site development the reality is that some of these sites are so highly derelict that they’re just not viable for development,” said Ben de Waal.

Despite this fact, the PGS is being put forward as the solution to the sustainable development of derelict and vacant land.

“We’ve got this perverse situation where either PGS isn’t going to work or we’re going to see more greenfield development,” according to Ben de Waal.

When it comes to grants, increasingly seen as “a myth” from the private sector viewpoint, the key is matching a project to the most appropriate funding, he said:

“Grants are fundamentally there to encourage developments that would not normally happen. The key is hitting the output criteria of the awarding body. Look at how your site fits in with their objectives.”

Together with the 150% tax relief available for expenditure on land remediation, grants can help make brownfield regeneration worthwhile for developers despite the harsh legislative climate.

Lastly, the political risk needs to be factored in – with David Cameron announcing he will scrap the PGS is the Tories win the next election, the future for brownfield regeneration funding remains uncertain.

Goska Romanowicz

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