Planning fees increase - will they lead to an improved service or just be an additional burden to developers?

On 17 January 2018 the first increase in planning fees since 2012 come into effect under the snappily titled Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2017 (the 'Regulations').

The Regulations increase planning fees by 20% and also introduce fees for: permission in principle applications; certain prior approval applications for PD rights that were introduced in 2015 and 2017; and fees for applications for permission following the removal of PD rights.  The Regulations also enable fees to be charged by Mayoral and Urban Development Corporations for providing pre-app advice.

Whilst these fees will be universally welcomed by Local Planning Authorities (LPAs), there is some doubt as to how, or even if, the increase will provide measurable improvements to the services LPAs provide to applicants and the public alike. 

Planning departments have not been immune from the devastating cuts to council budgets since 2008 and unlike some other services, they have not been able to increase their application fees to help plug the huge budget shortfalls that they face.   The Government continues to set planning fees nationally rather than devolve the responsibility to locally accountable LPAs.

A 20% increase sounds like quite a hike but LPAs will no doubt say, and rightly so, that it is the first increase for over five years.   Part of the deal from the Government in increasing the fees was an agreement that the increase would be ring-fenced to be re-invested by councils in their planning service.  

Planning fees were introduced so that the users of the planning system, rather than taxpayers in general, meet the costs incurred by LPAs in deciding planning applications.  The full cost of the service is met by the LPA from its usual sources of funding.   It is right that an applicant meets its fair share of the cost to the LPA of determining the application but planning control exists to benefit everyone.  Planning control is explained on the Planning Portal as 'the process of managing the development of land and buildings. The purposes of this process is to save what is best of our heritage and improve the infrastructure upon which we depend for a civilised existence.'  Some developers feel that they bear too much of the cost for applications, particularly when the economic and social benefits of development are factored in.

Despite the increased fees being ring-fenced, Planning Officers should treat this with caution.  The requirement does not prevent councils from diverting existing planning budgets received from the council's general fund towards other services that elected members consider are more deserving, adult social care being a good example.

The Local Government Association estimates that a third of the total cost of determining planning applications is met by council tax and that the shortfall in the amount of fees is heaping more pressure on already stretched planning departments. 

Irrespective of the fees increase, the biggest obstacle to LPAs in improving their services is the recruitment and retention of planning officers.  The rigid pay structures and protocols within councils hamper, if not completely prevent, managers from financially rewarding good planners and help persuade them to stay.  Promotion is generally the only way to increase an officer's salary, but with promotion comes inevitable management responsibilities which take planning officers further away from their role in determining  applications.  The same constraints are not as present in the private sector and in a buoyant economy the private sector usually has first dibs on applicants.

Nick Davies, Business Manager - Strategic Place, Teignbridge District Council echoes these points and adds that  "If all Councils decide to spend some of their additional income on increased staff resources we will all be looking to recruit a planner or two at the same time and I just don’t think there are enough skilled people out there who are prepared to embark on a local government planning career in the current political climate…….'  He goes on to say 'The fee increase is welcome, but whether it results in a step-change in the capacity of LPAs remains to be seen.  It may be that LPAs will find it easier to improve performance by using the additional resource to more easily engage private sector specialists as and when required.'

On the other side of the equation, developers have reacted in different ways.  Some think that it is another added financial burden, which alongside pre-app fees, planning performance agreement fees, CIL and s.106 contributions / fees only serves to prevent or delay much-needed development.  Other developers have indicated that they do not mind the increase provided that it results in an improvement to the service that they receive.

In August 2017, PublicFInance magazine (issued by the Chartered Institute of Public Finance & Accounting) reported a Home Builders Federation spokesperson as saying that commercial applications generally covered their costs and that councils lost money mainly on householders wishing to make minor changes to their property.  The spokesperson advocated making more use of permitted development rights and that nationally set fees ensured that developers knew that they would be charged the same fee for the same task in any part of the country and allowing locally set fees would mean that "inefficient authorities would be rewarded by being able to charge higher fees while applicants have no choice over the level of service being offered.”

Performance by LPAs differs widely for a number of reasons but all developers pay for and therefore expect to receive a service, which they are only able to obtain from one provider.  The degree of satisfaction felt by an applicant can be coloured by whether they are issued with a planning permission (in the form in which they want it) or if their application is refused.   Process and result are tricky to separate in this assessment.

So will the increase in fees lead to an improved service or just be an additional burden to developers?  Who knows?  There is not one, definitive, answer at this point in time nor is there likely to be one in the future.  The performance of LPAs will vary as will the experiences of developers.  LPAs will apply the increased income in different ways and will manage their overall budgets to prioritise services.  Where LPAs and developers will find agreement is the need for councils to invest in recruiting and retaining good planners.  This will take time and an improvement in the way that local government is perceived by the public and funded by the Government.



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