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Government proposals for a new planning tariff will fail dramatically if based on the Milton Keynes model, experts have warned.

Fears that the tariff will make high-density schemes economically unviable, has been put forward as one reason by industry insiders.

There are also concerns that current entrenched systems, such as the ban on council borrowing and funding models for infrastructure will have to be overhauled.

Earlier this month the industry welcomed chancellor Alistair Darling鈥檚 pledge to scrap the controversial planning gain supplement in favour of a local tariff-based approach.

Housing minister Yvette Cooper told Parliament that she was aware that many industry bodies wanted to build on the model developed at Milton Keynes. English Partnerships announced last week that the Milton Keynes tariff will be the model for 鈥渁 new approach to be rolled out across the country鈥�.

But Jane Hamilton, chief operating officer of the Milton Keynes Partnership (MKP) and the driver behind the original Milton Keynes tariff, told Regenerate that the plans could not be rolled out wholesale to local authorities.

鈥淥ur tariff has worked because it is run by the MKP, not the council, and only covers the greenfield expansion areas. The council is using our model to raise money through its S106 agreements for brownfield schemes, but it can鈥檛 work the tariff in the same way as it doesn鈥檛 have the powers we [MKP] do.

鈥淲e can get forward funding for the infrastructure from English Partnerships but councils don鈥檛 have the legal framework or business plan to do this. How are they going to raise the money to get this off the ground? They don鈥檛 have the capacity for this,鈥� .

Hamilton added that she would be discussing this issue with the Treasury and Department for Communities and Local Government.

Many in the industry have supported proposals for planning charges, building on the current Section 106 approach and the tariff models developed by Milton Keynes and other areas

Housing minister Yvette Cooper

Those involved with the Milton Keynes 鈥渞oof tax鈥� will also warn government that high-density schemes will become financially unviable if the new tariff models itself on Milton Keynes鈥�. The Milton Keynes roof tax was devised for urban fringe development at a density of 30-35 units per hectare.

Housebuilder Crest Nicholson is in negotiations with Milton Keynes council over its 鈥渢ariff鈥� for the Oakgrove Millennium Community in the town centre. It says the scheme could be threatened if the original charge of 拢18,500/unit was upheld as the scheme was much higher density than the norm for Milton Keynes.

A source said: 鈥淭he tariff is great for greenfield sites but it renders developments unviable once the densities start to go up and costs shoot up.鈥�

Sarah Evans at Milton Keynes council planning department, said: 鈥淚f a scheme has a higher density, then the developer will have to pay a higher rate. There will be more impact on existing services and facilities so this should be reflected in the amount of money put forward.鈥�

Experts also pointed out developers could end up paying for infrastructure schemes that the government should be paying for.

Roger Humber, policy adviser for the House Builders Association, said: 鈥淒arling said it would contribute to regional infrastructure. That was ruled out as part of the deal in Milton Keynes as unaffordable, otherwise developers could end up paying for motorway widening. Most regional infrastructure is national infrastructure, paid for by the government.鈥�

鈥淭his is totally unacceptable and is a device to suggest to local authorities that their often highly inflated demands for major infrastructure can be paid for by tariffs. This level of infrastructure must remain a Treasury responsibility because, apart from anything else, its inclusion would raise tariffs to unaffordable levels.鈥�

The government is to publish a consultation paper on the tariff with a view to introducing it in the planning bill coming up in the present parliamentary session.