The Home Builders Federation is working on alternatives to the planning gain supplement (PGS), after Gordon Brown last week challenged the industry to present him with a better way to fund infrastructure.

The HBF expects to announce its proposals in September.

John Stewart, the federation鈥檚 director of economic affairs, said: 鈥淧GS could not be made to work.鈥�

The main alternative is the 鈥渞oof tax鈥� being piloted in Milton Keynes by English Partnerships. Under this scheme, developers pay councils a sum based on the number of homes being built instead of negotiating a section 106 agreement.

Peter Coles, development director of Hammerson, argues in a paper for a recent Smith Institute book on planning reform that many of the benefits of the PGS could be delivered through the tariff.

The Treasury wants a form of levy on land that has secured planning permission, but has signalled that it would consider alternatives to the PGS in response to a backlash against proposals.