As part of their continued ‘levelling up’ agenda, the Government has launched a consultation on new plans to annually adjust planning application fees in line with inflation, with an initial increase of between 25% and 35% being earmarked as early as this Summer in England. Extra funds raised by the fee hikes are to be ring-fenced for local planning authorities to provide a more effective service through additional financing and resources.
The Government says the proposed changes have come as a result of consistent feedback among many businesses and individuals involved in the planning process that the core planning application service is not consistently performing at the level it should be.
Planning Application Fees
The following amendments to planning fees are proposed by the consultation:
-An increase in planning fees for major applications by 35%
-An increase in planning fees for all other applications including prior approvals by 25%
-Double fees for retrospective applications (except for householders)
-Removal of the ‘free-go’ for repeat applications
Therefore, with the proposed 25% increase, householder planning application fees would rise by £52, from £206 to £258 while, prior approval applications would rise from £96 to £120.
Non-major applications, which are charged per dwelling or per 75 square metres of non-residential floorspace, would rise from £462 to £578.
As a result of the 35% increase in major planning application fees, major applications for between ten and 50 dwellings or between 1,000 and 3,750 square metres of commercial non-residential floorspace will rise from £462 to £624 per dwelling or per 75 square metres.
Major applications for over 50 dwellings or more than 3,750 square metres of floorspace would be charged at a rate of £30,860 plus £186 for each additional dwelling in excess of 50 dwellings or additional 75 square metres in excess of 3,750 square metres up to a maximum of £405,000. Applicants are currently charged £22,859 plus £138 for each additional dwelling in excess of 50 dwellings or additional 75 square metres in excess of 3,750 square metres up to a maximum of £300,000. The current proposals offer a considerable uplift in the maximum fees for major applications.
Having not increased since January 2018, the Government has announced that to keep up with inflation, it is proposed that planning application fees will be adjusted annually. The proposed changes would apply to all applicants, notwithstanding those able to claim fee exemptions. The Government estimate that the proposed increase will represent on average, less than 1% of overall development costs incurred by applicants.
Local Planning Authority Capacity and Capability
The Government has estimated a funding shortfall for the planning application service, which is currently estimated to be in the region of £225 million annually (approximately 33%). They emphasise a desire to reduce the funding shortfall and create greater financial sustainability for all local planning authorities, whilst also wanting local planning authorities to be more efficient, to lower the costs of delivering the planning application service.
In relation to the performance of the planning applications service, the Government state that they want to ensure all applicants experience a high-quality and timely service. The consultation therefore proposes a new approach to how the performance of local planning authorities is measured across a broader set of quantitative and qualitative measures.
The Government highlights that whilst extension of time agreements are useful, they should be used in exceptional circumstances to allow additional time for unforeseen issues to be resolved to the benefit of all parties. Currently, extension of time agreements do not count against a local planning authority’s performance figures for speed of decision-making and therefore can mask instances where local planning authorities are not determining applications within the required statutory periods. Although not specifically mentioned in relation to extension of time agreements, the Government propose the introduction of a wider range of metrics to encourage improvements in service quality, which in doing so, will allow the Government to identify authorities that are most in need of additional targeted support.
Specific metrics have not yet been outlined within the consultation, however It is proposed that a broadened planning performance framework would continue to focus on development management activity only and would exist alongside other performance monitoring regimes, for example in relation to local plan progress.
Potential Introduction of ‘Fast Track’ Applications
In addition to statutory planning application fees, local planning authorities have the ability to charge for bespoke or additional services above the level or standard that the local planning authority has a duty to provide, provided that these charges do not exceed the cost of providing the service. These services can include pre-application advice, Planning Performance Agreements (as currently exist), and the consultation identifies the prospect of premium or ‘fast track’ planning application services. More broadly, the consultation identifies that the Government has shown interest in expanding the options available to local planning authorities including allowing extra flexibility to bespoke services where these services would provide a more expedited service.
No specific changes are proposed within the consultation however the Government are seeking to understand what experiences stakeholders have had regarding bespoke or ‘fast track’ services for which an additional fee is or could be charged and how this has assisted in supporting faster decision-making. They also welcome any other suggestions on how local planning authorities could deliver a more efficient planning application service for an additional fee.
Tightening the Planning Guarantee
The Planning Guarantee allows for an applicant to secure a refund of the planning fee where a planning decision has not been made within 26 weeks of submitting a valid application if an extension of time has not been agreed with an applicant.
The consultation proposes that where the statutory determination period is 8 weeks the Planning Guarantee should be set at 16 weeks and where the statutory determination period is 13 weeks (or 16 weeks for Environmental Impact Assessment developments) the Planning Guarantee should be retained at 26 weeks.
Introduction of a Prior Approval Fee for Permitted Development Rights Afforded to the Crown by a Closed Defence Site
A further proposal seeks to introduce a prior approval fee for the permitted development right allowing development by the Crown on a closed defence site. For context, in December 2021 the Government introduced a new permitted development right allowing development by the Crown on a closed defence site under Class TA of Part 19 of the Town and Country Planning (General Permitted Development) (England) Order 2015, as amended. The right allows the Ministry of Defence to both extend and alter existing buildings and erect new buildings within the perimeter of a site, subject to certain limitations and conditions.
The proposals seek to ringfence planning fee income for the running of planning departments however this only relates to the uplifted portion of the fees with the original portion of the fee remaining available for use across any local authority function. If the Government really wanted to invest in the planning application service, all fees received from planning applications should be used to cover the costs of the service, with any additional profit being released for wider use by local authorities.
The removal of the ‘free go’ for non-householder applications is likely to provide particular concern for some small and medium enterprises who would be required to completely restart the planning process should an application be refused or withdrawn. The Government has consistently stated that they wish to support the growth of smaller businesses, however the initial costs incurred through planning could be a cause for concern. It would be more appropriate for the Government to implement a reduced planning fee in these instances to ensure consistency in their aims to support new and existing small and medium enterprises.
The proposals are undoubtedly welcomed on the whole provided that the uplift in fees will result in a tangible improvement to the planning application experience and the overall efficiency of the services provided by local planning authorities through the recruitment and training of staff.
Whilst the proposals have been earmarked for introduction this summer, they remain at consultation stage, and are likely to be subject to change as a result of the outcome of this process.
The consultation will last for 8 weeks from 28 February 2023 to 25 April 2023 and is accessible online via this link
Article by Will Hayes