There have been storm clouds gathering for some time when it comes to funding of Local Planning Authorities (LPAs) and most of us will be aware of the very pressing situation facing many LPAs and many local authorities as a whole, not least as a result of a combination of factors including the cost of social care, temporary accommodation and the spiralling costs of providing front line services.  

In relation to the topic of planning application fees, in December 2023, planning application fees were increased by 35% for major applications and 25% for all other applications. We know here at Third Revolution how considerable this is, for example to Solar operators given land coverage, without the returns of, for example, residential or commercial land uses. Therefore, there is some concern in relation to the current consultation* (Chapter 11 -Changes to planning application fees) which is seeking views on further increases to planning application fees.    

Particularly concerning is the fact that planning application fees are not ringfenced to the planning departments of local authorities.    

Whilst "Local planning authorities are expected [our emphasis] to spend these fees on delivering their development management services" there is currently no ringfencing of planning application fees to LPA and it's really critical that the new Government addresses this.    

It seems that the prevailing wind is to increase the planning application fees again. The new Government is also inviting comments on localisation of planning application fees. There are two models being considered:    

- Full localisation whereby fees would no longer be set nationally, instead all LPAs would have to set their own fees within the existing fee categories. The consultation refers to being capped at cost recovery.    

- Local Variation: whereby fees could vary within prescribed limits.    

The consultation document is also considering increasing fees to fund wider planning services. Currently fees are only to cover the development management functions (those related to determining applications). Wider services include plan-making, heritage, design and enforcement. It is estimated that fees would need to increase by 157% to meet this cost. It notes that "increasing planning fees to cover the costs of other planning services would provide additional income for local planning authorities but would result in much higher fees which could risk deterring some development. It could also be argued that wider planning services represent a public service that should be paid for by other council budgets, funded by the taxpayer, not by individual applicants."    

I personally believe there is a good case for more cost recovery on the likes of householder applications, prior approval applications and such like. However, it's critical to not 'kill the golden goose' with further increases which may become very difficult to accommodate in this world of inflation, building cost rises and viability concerns. Especially for certain types of developments which are perhaps disproportionately affected such as solar schemes which have large site areas and high upfront costs for surveys such as ecology.    

The incoming Government are moving at pace on many aspects of planning reform but this needs careful thought so as not to further stifle development and cause potentially suitable projects to be shelved. The biggest factor too is to be calling for ring-fencing of planning resources for planning departments so as to maintain some sort of faith in the system.    

If you require Third Revolution input in considering the implications or preparing comments on your behalf, please get in touch with Gill Eaton or Liz Alexander.

Proposed reforms to the National Planning Policy Framework and other changes to the planning system - https://www.gov.uk/government/consultations/proposed-reforms-to-the-national-planning-policy-framework-and-other-changes-to-the-planning-system