Housing White Paper: Could increasing planning fees overcome LPA resourcing constraints?

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The Housing White Paper (HWP) challenges all LPAs to “be as ambitious and innovative as possible to get homes built in their area”. They are to do this by having an up-to-date plan that meets their housing requirement, deciding development promptly and ensuring the homes they have planned are built out on time. It sets out a number of proposals intended to assist LPAs to meet this challenge, including increased planning application fees and making additional funding available for “ambitious authorities in areas of high housing need”.

At the same time, the HWP is increasing the burden and workload of LPAs by – amongst other things – calling upon them to take action against those who do not deliver on permissions, and to increase delivery on council-owned land.

Research undertaken on behalf of the Royal Town Planning Institute (RTPI) considered the resourcing of LPAs within the North West region and found that, between 2009/10 and 2013/14, the average net expenditure for development management services decreased by 27% and by 18% for planning policy. As a result, the number of planning staff in local authorities in the North West decreased by a third between 2010 and 2015.

The scale of cuts that LPAs have suffered has failed to reflect the significant levels of income that planning services continue to generate for local authorities through, for example, planning application fees and New Homes Bonus payments.

The HWP goes some way to addressing the chronic under-resourcing of local authority planning departments by introducing the ability for LPAs to increase planning application fees by 20%. This is conditional on them committing to invest the additional fee income in their planning department. However, it is unclear whether this increase will be sufficient to reverse the level of decline in staff numbers and the skills shortage that have been suffered within the country’s planning departments over recent years.

The Government is also consulting on proposals to allow a further 20% increase for those LPAs who are delivering the homes their communities need (see paragraph 2.15 of the HWP). Such an approach fails to recognise the significant range of reasons beyond the control of local authorities that result in housing delivery being delayed. These include prevailing market signals and site-specific constraints. This provision therefore has the potential to punish those authorities which are pro-growth but located in weaker market areas, further compounding any existing resourcing and skills shortages, and compromising the potential for delivery to be increased.

Despite a decline in LPA staffing levels, local authorities are – on the whole – continuing to decide the majority of major residential applications ‘on time’, i.e. within the statutory period or agreed extension. Indeed, statistics from DCLG indicate that the proportion of major residential applications decided ‘on time’ has increased from 53% between October 2012 and September 2013, to 79% between October 2015 and September 2016.

Figure 1: Percentage of major residential planning applications decided within time (England)

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Figure 1: Percentage of major residential planning applications decided within time (England)

In reality, it is often during the pre- and post-application stages that delays in the planning process occur. The level of service, costs and quality of pre-application varies hugely across the country, creating uncertainty for applicants. Likewise, the timescales for negotiating Section 106 Agreements and discharging planning conditions can often be protracted as staff under pressure are forced to prioritise ‘new’ applications due to resourcing shortfalls. These delays have direct and significant implications for the delivery of housing development.

The potential for fees for these stages of the planning process to be introduced or increased should be reviewed and any income generated ring-fenced for investment in the planning department.

The Government should also consider whether provisions to further encourage the use of Planning Performance Agreements (PPAs) would assist in the resourcing of planning departments. This could potentially include the imposition of a threshold above which applications for major residential development are required to be accompanied by a PPA. 

DCLG statistics indicate that between October 2012 and September 2016, a higher proportion of major residential planning applications that were subject to a PPA were determined within the agreed timescales (86%) than those that do not involve a PPA (69%). As a result, it is unsurprising that the popularity of PPAs has increased notably over recent years (see Figure 2), indicating that applicants may be willing to pay an additional fee in return for a guaranteed level of service and timescales.

Figure 2: Major residential decisions involving a PPA as a % of total number of decisions (England)

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Figure 2: Major residential decisions involving a PPA as a % of total number of decisions (England)
It is clear that local authority planning departments have been under-resourced for some time now, and the level of budget cuts experienced fails to reflect their income-generating potential. Staffing levels have continued to drop, causing a skills shortage in many authorities. Whilst the proportion of major residential applications that are determined ‘on time’ has increased over recent quarters, it is often the pre- and post-application stages where significant delays occur, including the negotiation of S106 Agreements and the discharge of conditions. The HWP fails to recognise or address these important stages of the planning process which directly impact the speed at which developers can deliver housing, even once an application has been approved.

At the same time, the HWP introduces further burdens on LPA time and resources, by holding LPAs accountable if housing delivery fails to keep up with identified needs: something that, in reality, LPAs have little control over. In reality, the provisions within the HWP are unlikely to be substantial enough to reverse the significant decline in funding and staffing levels within local authority planning departments that have been suffered over recent years.

20 March 2017