1st March 2023
Is an increase in Planning Application fees the answer?
The Department for Levelling Up, Housing and Communities (DLUHC) has launched a consultation on proposed changes to seek to improve the performance of local planning authorities. The consultation includes a number of elements, but the headline matter is the proposed increase to planning application fees. The increases being consulted upon are a 35% increase to major planning application fees and a 25% increase to minor application fees. The intent being for the fee increases to take effect from the Summer of 2023, subject to the outcome of the consultation. It is also proposed that planning application fees will be reviewed again no later than three years following implementation and that in due course consideration is given to fees being adjusted annually in line with inflation.
The currently proposed increase would result in a fee of £578 for a single dwelling (minor application) and £624 per dwelling for a major application (between 10 and 50 dwellings). The maximum fees for major applications over 50 dwellings would be £30,860 plus £186 for every additional dwelling in excess of 50, subject to a maximum fee of £405,000 (previously £300,000). It is also proposed to double the fees for retrospective planning applications to discourage unauthorised development.
The background to these proposals are the significant financial pressures that Local Planning Authorities find themselves under. DLUHC’s research suggests that planning application fees leave a £225m funding shortfall in the planning application service. The increase in fees is aimed at seeking to reduce the shortfall in funding and provide greater financial certainty for local planning authorities. This is partnered with the need for local planning authorities to continue to drive efficiencies and lower the costs of delivering a planning application service.
Comments are sought on a number of matters including:
- whether the fee increases are reasonable?
- whether the 25% increase should be applied to householders, noting the cost of living crisis?
- should planning fees be adjusted annually in line with inflation in the future?
- should the increased fee income be ring-fenced for the spending in the local authority planning departments?
- Should the ‘free-go’ for repeat applications be removed or changed?
DLUHC considers that that the proposed increases in fees, accompanied by other changes, strikes the right balance between ensuring that costs are reasonable. The greater burden falls on larger developers, whilst ensuring additional fee income for local planning authorities to support the delivery of the planning application service.
Increased planning application fees may be viewed as a further cost on development, in a period when costs have been rising significantly and the viability of some projects is already in question. On the other hand the increased fees, if planning applications are determined in a timely manner, may be a positive, resulting in reduced fees in the round and greater certainty on timing for development.
Capacity and Capability
Clearly an increase in fee income, if ring-fenced for planning departments, has the ability to assist in recruiting and retaining planning officers, which in theory should allow applications to be dealt with in a more timely manner. However, DLUHC recognises that money is not the only issue and they will seek to provide local planning authorities with additional resource to deliver an effective service. In this regard, views are sought on what skills and expertise gaps there are in Local Planning Authorities, how can we encourage more people into the planning profession and in particular how can we increase representation in under-represented groups.
Local Planning Authority Performance
Proposals are to review and amend the metrics for measuring local planning authority performance, including through measuring those applications dealt with in the statutory time periods, rather than through agreement of extensions of time. What will the implications of this be if taken forward? Will it lead to a greater number of local planning authorities refusing applications or not accepting amendments? Will it encourage greater pre-application engagement, noting that this is not a statutory service and often poorly resourced?
A further notable proposal is a change to the Planning Guarantee. Currently, a refund can be requested from a local planning authority if they have not determined an application within 26 weeks of receipt or agreed an extension of time with the applicant. The proposal is to reduce this time period to 16 weeks for minor applications, but major applications and EIA development retaining the 26 week period.
These are potentially important changes which could have significant impacts on the operation and financing of local authority planning departments moving forward. It remains to be seen whether an increase in fees will be the panacea of achieving improvements in local planning authorities or whether the other proposed changes might bring about counter effects, adding even more pressure despite the hypothetical increased resourcing.
The consultation is live until 25 April 2023 DLUHC consultation