Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2017

Lord Kennedy of Southwark Excerpts

Wednesday 6th December 2017 Grand Committee

[Baroness Pinnock (LD)]

I draw attention to my registered interests as a councillor in Kirklees and as one of the many vice-presidents of the Local Government Association. As a local councillor and someone who is interested in planning, I welcome the 20% increase in fees across all types of planning application, although it has been a long time coming.

However, I note with some concern that the noble Lord, Lord Bourne, did not refer to the fact that the resultant gain in income will cover only around half of the current deficit in financing the planning applications processed by the local planning authority. Paragraph 7.3 of the Explanatory Memorandum draws attention to this. It says that,

“the Government is seeking to reduce the funding gap, and estimate that some £80m additional fee income will be raised annually”.

I also note that the Minister referred to an annual increase of £75 million. The paragraph goes on to state:

“Therefore, although the fee increase will help to address some of this shortfall, even taking this additional income into account, authorities’ costs will overall still be higher than the fee charged”.


We continue to say that the Government are expecting hard-pressed council tax payers to subsidise developers. Given that the interesting figure of 0.25% of planning costs is what the planning fee represents, it seems that we ought to be asking developers to pay the full cost of the planning application. My rough guess is that it would mean a 40% increase. It is not acceptable for council tax payers to continue to subsidise development, and the developers who will make considerable profits out of the projects they undertake.

I noted the new type of planning known as “planning in principle” referred to by the Minister. When I read it, it seemed to be outline planning consent, and I would like to understand what the difference is. In the explanation it talks about there being none of the detail but perhaps only access and considering the principle of building on a certain site. I take that to be outline planning consent and I should therefore like to know what the difference is.

The Minister went on to refer to the opportunity of a further 20% increase in planning fees which would be dependent on local planning authorities delivering on housebuilding targets. This is a bit of a punishment for those authorities that grant planning consent for applications in a timely way but then find that developers sit on them for years and keep coming back with requests for time extensions on their permissions. I cite my own ward in Kirklees, where we have 600 planning consents—that is just one ward, not a whole authority—waiting for development. No doubt my council would not qualify for the further 20%, regardless of the fact that it had granted all these planning permissions.

Perhaps it is because I am new to all this, but I want to comment on this business of the Government undertaking to define planning application fees. Planning permissions and the whole planning process are a local planning authority matter and I believe that planning fees ought to be determined by local government. I do not understand why central government wants to keep such a tight hold on this. If there was more freedom for local planning authorities to determine fees, I am sure that they would introduce innovative processes and be a bit more business-like. If you wanted to attract more development, maybe you would cut fees for development that was within the local authority’s strategic vision. I am not sure why central government has to keep a tight hold of planning fees. I look forward to the Minister’s response on that.

With those comments, in totality I welcome the increase in fees. Local taxpayers have subsidised development for far too long. I look forward to a further 20%, so that they do not subsidise it at all.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I welcome the noble Baroness, Lady Finlay, to the Chair, as did the noble Lord, Lord Bourne. I draw the Committee’s attention to my registered interests as a councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.

Like the noble Baroness, Lady Pinnock, I welcome the measure as far as it goes, in that it increases the fees that local authorities charge for planning applications. That is welcome, as are the fees for the new categories. The 20% increase will make a difference, but council tax payers will still be subsidising the planning process. As has been mentioned many times, that is regrettable. In paragraph 7.3 of the Explanatory Notes, that seems to have been accepted, although I do not think that these proposals go far enough. As the Explanatory Notes say, the last increase was in 2012, which highlights a problem—that is five years ago and costs have gone up since. I accept the point that the noble Baroness, Lady Pinnock, made in asking why the Government are still setting these fees nationally. If they are going to carry on doing that they should look at some way of inflation-proofing this, otherwise we will be sitting here in another five or six years’ time agreeing the fees again. Costs increase all the time for local authorities and waiting five years is far too long. As the noble Baroness said, these matters should be dealt with by local authorities, which will set fees connected to their areas.

The Explanatory Notes also mention applications for permission in principle. A new figure is being proposed, but the fee is set lower than it is for present applications. The justification is that less work will be involved, so you do not need a bigger fee. But of course the fee we have now does not cover it. There is a new fee to be charged but, again, it will not cover the cost of even that work. That is odd logic, unless you always want to set the fees at a lower level than the cost so you always have the council tax payer subsidising the payment process. I would have thought that we would want to get out of that at some point—if not today, certainly in the future. Having said that, I welcome the increase. It is going in the right direction.

We will be talking about pilots later but I have suggested before that perhaps at least one council in the whole of England should do a pilot on full costs recovery. I cannot see the harm of just trying it. At the end of the day it may not work, but if we could find one place to volunteer to do that it would give the Government useful information about whether that is something we could do. I have called for it, as have colleagues. Perhaps we should do that. Having said that, I am happy to support the regulations, as far as they go.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness, Lady Pinnock, and the noble Lord, Lord Kennedy, for their comments, their general support and, indeed, their constructive approach. I will try to deal with the points they raised.

First, in relation to whether we should have gone further, I appreciate that it is the Government’s job to bear down on costs and obviously there is a concern, which we all share, about ensuring that we build more. Having said that the planning fees represent only 0.25% of the development costs, we nevertheless have to be aware of the fact that there must be a level where it would begin to be a disincentive to development. That said, as I outlined and the noble Baroness, Lady Pinnock, referred to, we are looking at a potential 20% tied to housing target delivery and we are analysing the responses. I do not see this as punishing those authorities that do not make it. This is very much a carrot, not a stick. I expect that many local authorities will want to respond favourably to this.

However, I listened carefully to the noble Lord and the noble Baroness as I know they have lots of experience in local government. I realise they know what they are talking about—nearly always—particularly on these areas. They made a fair point. There have been gaps under previous Governments when the fees have not gone up as they perhaps should have. I liked the constructive suggestions from the noble Lord, which I will take away, about the index-linking and the pilots. Both are worthy of discussion so we will have a look at them. The current regulations do not provide for index-linking and I suspect that we would need primary legislation to amend the enabling power. That said, let us see if there is some merit in that suggestion because I appreciate that we need to ensure that planning departments are properly resourced. The noble Lord and the noble Baroness are as aware of that as anyone.

The fee for permission in principle—a new route to planning permission, as the noble Baroness knows, giving developers up-front certainty that sites are suitable for housing-led development—was not plucked out of the air, as it were. There was discussion with local authorities and others about fixing that fee, which we consider appropriate. It is a new fee but we have not had massive representations against it—I am right in saying that—in so far as there were any representations. I think it probably is an appropriate fee, as the others are. I appreciate the general point that this is new territory.

In relation to the point raised by the noble Baroness and the noble Lord about the national setting of fees, this has always been the approach under successive Governments. That does not necessarily mean that it is the correct approach, I know, but it has. There are a couple of issues concerning setting fees nationally. Allowing local planning authorities to set their own fee levels risks the principle of ring-fencing this. I suppose a ring-fence could be created but it would be a little clunky. But there is also a risk, which would be more of a concern to me and to the Government, that uncertainty in relation to fees may act as a disincentive to home owners and small developers in particular to undertaking development in a particular area. There might be a race to the bottom. We should be careful what we wish for because there is a risk that this could end up underresourcing public authorities by pushing them to charge lower fees than might be sensible. I shall need to look at this carefully but, as I say, my initial view is that it might be difficult and not achieve what we want.

That said, I take the points made about index-linking very seriously; it would save us the difficulty of passing primary legislation. We shall take the suggestion away and look at it for the longer view. The pilot is also a constructive suggestion. With that, I welcome the approach of both the noble Lord and the noble Baroness in their welcome of the fact that we are increasing planning fees.

[Lord Kennedy of Southwark]

I am pleased that the noble Lord is going to look at the suggestions. The general point to make is that we hear in our authority and from local government generally that there is a lot of pressure in many areas of service. If there is one area where you could get close to full cost recovery, it is this one, and that would be progress. I take the point that it might hamper development, but I am not convinced that 0.25% of the development costs would be the deal-breaker. If council tax payers are subsidising the planning process, it means that money is not being used for other services which are equally if not more important for the authority to deliver. We hear debates right around the local government sphere about the problems and pressures on budgets and the cuts that have been made in the past six or seven years. That is a serious point for local government, so I am grateful to the Minister for saying that he will take a look at this.

[Lord Bourne of Aberystwyth]

We are getting closer to full cost recovery with these regulations and I appeal to the noble Lord’s legendary patience to await the consultation on the other 20%. That will go a long way for many authorities which I know are trying and succeeding to meet their housing targets. However, the general point has certainly been taken on board.