draft Town and Country Planning (Fees for Applications, deemed applications, requests and site visits) (england) (amendment) regulations 2017
The Minister for Housing and Planning (Alok Sharma)
I beg to move,
That the Committee has considered the draft Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2017.
The draft regulations will bring forward the 20% increase in nationally set planning application fees that we promised in the housing White Paper, introduce fees for new categories of development and enable development corporations to charge for pre-application planning advice. If approved by the House, as they were in the other place, the draft regulations will come into effect 28 days after they are made.
The planning application regime is the gateway to new homes, economic development and regeneration, so it is important that we support and work with local authorities to promote excellence in their services. We want to ensure that the planning system is valued, resilient and capable of providing the service that local people and planning applicants expect. We also want to provide local authorities with the capacity and capability to support the Government’s objective to build the homes we need more quickly.
I recognise that planning fees have not increased since 2012. The 20% increase in planning fees set out in the draft regulations is a significant step towards addressing the widespread concerns of under-resourced local planning authorities. It is worth noting that the increase is greater than it would have been had it been linked to inflation. In recognising the wider pressures on local planning authorities, we stated in our housing White Paper that we would increase planning fees by 20% for those authorities that
“commit to invest the additional fee income in their planning department.”
Ring-fencing the additional fees in that way will ensure that resources are directly invested to support the delivery of an effective planning system. All local planning authorities in England have accepted that offer.
Based on current activity, that uplift in planning fees could generate more than £75 million of additional fee income annually for local authorities. That is equal to the average salaries of approximately 1,600 planners and other professionals who play a role in the planning process, and should bring total planning application fee income to approximately £450 million a year. The 20% increase will keep planning application fees at a modest level for householders and developers compared with overall project costs, while providing local authorities with the necessary resources to turn around applications efficiently and effectively.
In addition to the 20% fee increase for planning applications and advertisement consents set out in regulation 2, the draft regulations will make a number of other technical changes in relation to fees charged by local planning authorities. In developing the draft regulations, we undertook a technical consultation in 2016 on proposals to increase planning application fees. The majority of respondents from all sectors supported increasing planning fees.
Let me turn to the specifics of the draft regulations. Regulation 1 sets out their scope: they apply only in England and will come into force 28 days after they are made. Regulation 2 provides for an increase in all existing fees for planning applications and advertisement consents, and brings forward four technical changes.
Regulation 3 puts in place the fee a local authority will be able to charge for a permission-in-principle application. Permission in principle is a new route to planning permission, which gives developers up-front certainty that sites are suitable for housing-led development in principle before they need to work up detailed and costly development proposals. The draft regulations will introduce a new fee of £402 per 0.1 hectare for applications for permission in principle. That follows new powers that we intend to provide to local authorities to grant permissions in principle for suitable sites on application.
The same principle applies in regulation 4, which enables any mayoral development corporation or urban development corporation to charge for giving pre-application advice. That provides the same powers to development corporations as already exist for other local planning authorities.
Regulation 5(1) amends a reference to the relevant legislation relating to permitted development rights. In effect, it changes the reference from the Town and Country Planning (General Permitted Development) Order 1995 to the Town and Country Planning (General Permitted Development) (England) Order 2015.
Regulation 5(2) provides for a planning fee to be charged by local planning authorities for applications necessary because a permitted development right has been removed. The right could have been removed through either an article 4 direction of the 2015 order or a condition imposed on a planning permission. That change delivers a commitment made during the passage of the Neighbourhood Planning Act 2017.
Finally, regulation 5(3) expands the scope of prior approval applications, for which a fee of £96 can be charged. The regulations include the prior approvals required as part of the new permitted development rights that were introduced in April 2015 and April 2017. Those permitted development rights include the rights for the installation of solar photovoltaic equipment on non-domestic buildings, the erection of click-and-collect facilities within the land area of a shop, the temporary use of buildings or land for film-making purposes and the provision of temporary school buildings on vacant commercial land for state-funded schools.
We continue to keep the resourcing of local authority planning departments and where fees can be charged under review. The housing White Paper promised a subsequent consultation on a possible further 20% increase in planning fees. We published in September this year local housing needs consultation proposals entitled “Planning for the right homes in the right places”. We consulted on the potential to increase planning fees by a further 20% and how that could be targeted for authorities that are delivering the homes that communities need. That consultation closed recently, and the responses received will inform our thinking on how to ensure that planning fees deliver the resources necessary to support the high performance of local planning authorities. I commend the regulations to the Committee.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Sharma. We by and large welcome the proposals. There are areas that we want to see the Government go further on, and I will explore some of those. I also have questions that I would like to put to the Minister, for a response today.
In particular, we welcome regulation 2, which provides for the increase in existing fees to be paid to local planning authorities. We welcome the 20% increase, which will no doubt make a difference. Without the approval of the regulations, planning departments would miss out on an estimated £70 million of additional income in the current financial year. The autumn statement contained measures intended to speed up development, but included nothing to help the resourcing of planning departments, which councils have long called for.
We also welcome the move in regulation 4(2)—that is, proposed new regulation 2B of the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations 2012—to allow mayoral development corporations and urban development corporations to charge for advice in their area on planning applications at the pre-application stage. That reflects better the greater use of powers afforded to local mayors, without them having to incur additional costs in delivering those powers.
The heart of the issue is that the planning process is still being subsidised by general council tax payers. Those payments are being asked to cover an increasing shortfall in council budgets. The Institute for Fiscal Studies estimates that councils have been forced to cut planning and development services by 30% when we are demanding more and expecting that more units will be built. While the regulations are welcome, they are a small step towards achieving the house building that we know our country needs.
Councils are working hard to deliver the right kind of home and they are approving nine out of 10 planning applications, but planning departments are severely under-resourced. Taxpayers are subsidising the cost of planning applications by around £200 million a year. That money could be spent on frontline services, which we know have taken the brunt of austerity.
A shortcoming of recent regulations on this issue is that they do not account for inflation. That cannot be acceptable when they are revised so infrequently. As the explanatory notes state, the regulations were last revised in 2012, which is a significant issue. It was five years ago that this issue was last brought before the House in a meaningful way. Since then, we know that the cost of dealing with applications has gone up significantly.
Under the proposals, planning authorities will probably have to wait the same time before another increase, when costs are increasing all the time. We need a fee structure with inflationary increases built in to take into account the natural increases that councils have to bear every year. If we do not do that, the additional pressures that we see year on year through normal inflationary pressures will be passed on to general taxpayers in those areas. With austerity continuing to bite, that means that frontline services will be affected.
The Local Government Association has suggested that provision should be made for fees to increase in line with the consumer price index on 1 April every year, starting in 2018. That would bring the town and country planning fees regulations into line with the Infrastructure Planning Fees (Amendment) Regulations 2017. Those insert a mechanism for fees for development consent for certain types of nationally significant infrastructure project to be increased annually in line with CPI.
Another issue is the method for setting fees. Rather than the Government setting fees, would it not be appropriate and in the spirit of devolution for local authorities to set the fees in their own areas? We know that councils provide for fees and charges across a range of council services: burial charges, trade waste, car parking charges and market ground rents. Councils do that annually as a decision of full council. I cannot see why planning fees should not be done in the same manner, as they would be held to account by the full council meeting and dealt with in the way that the schedule of fees and charges is for the range of council services.
That way, local authorities could plan for their local needs and plan ahead for the developments that they knew would come down the line. They could have staff in place, knowing that they had the security of being masters of their own destiny, rather than having to wait for Government to carry out a five-year review further down the line.
Planning authorities understand the demand for applications, but, importantly, they also understand the nature of costs that can be associated with certain types of application. An example is where there are a number of conservation areas or listed buildings due for redevelopment. The council would know that the specialist skills that were needed in the planning department were more involved than general planning and professional advice services. It would make sense to allow that local determination, taking into account the nature of planning applications coming forward, to be in the control of local authorities, which best know their area.
Colleagues at the LGA have suggested that we should explore the option of piloting full-cost recovery in some areas; I would like the Minister’s view on that. The Government could test a fair and transparent scheme and give councils the flexibility to set appropriate fees, reflecting local circumstance. To me, that is a sensible way to assess whether that is plausible and it would refine how this could be done, creating a pathway for the future.
I would also briefly like to raise concern about the changes to planning regulations set out in the autumn statement. The Treasury has now extended powers of permitted development to allow for the demolition of existing buildings, rather than their reuse. That not only bypasses any form of local consultation, but means that anything can be built without public scrutiny. That is a significant departure from the existing planning development rules and it could undermine local planning authorities even more.
Some of the examples given, such as the extension of click-and-collect facilities, seem very passive. Why would anybody want to object to what seems on the face of it a small planning matter? Click-and-collect lockers are generally installed outside convenience stores. That means that people can collect parcels 24 hours a day, seven days a week. The convenience store itself might have restricted opening hours, recognising that it could be surrounded by dense residential accommodation, so extended opening hours could be inconvenient for people who live there.
These extended permitted development rights allow for such lockers to be installed outside convenience stores, which could be by someone’s front door, with people coming 24 hours a day, seven days a week, to open the lockers for their click-and-collect parcels. The idea that the Government will not allow local people to have a say on that is not at all in the spirit of local democracy, and it is certainly not in the spirit of people being able to determine, at a local level, what type of neighbourhood they want to live in.
More generally, I will highlight the benefits of a proper, resourced planning system. We are in the midst of a housing crisis in the UK. I do not want to get into a political argument about why and what the current methods are, but we should all agree that the way to get out of the current situation is to make sure that we have proper planning departments that are resourced and valued, and that can start planning for the long term.
One suggestion put forward—I would like to hear the Minister’s view on this—is to have a proper education and investment programme for planning officers coming into local authorities. It would be similar to a Teach First-type programme, where we would identify people at university, support them and fast-track them into local authorities, and then, when they were in place within the local authority, give them continual personal development training and support.
We should also identify young people within schools who might be interested in this sector. Young people in Oldham would love the opportunity of having what is a professional and respected job, but is maybe a job they have not even considered before. We know that our housing growth requirements will require more planning officers, so it would be advantageous to reach out into our schools, open young people’s eyes a bit and offer them that opportunity.
I know the Government will say they have consulted with the LGA. That may well be the case, and I would expect it to be, but that is not to say that what the LGA said has been taken on board in the way it intended. I will make a cross-party offer. The LGA is a cross-party organisation; it reaches consensus on many of these issues and is not party political. There is no reason this place could not act in the same mature-spirited way, too. If there is room for common ground—where we can advance the planning system, making it fit for purpose and for tackling the challenges ahead—perhaps a way to do that is somewhere outside a statutory instrument Committee, where more informal conversations could take place and we could work with our colleagues in the LGA to make sure that we get this right. If we do not get this right, there is no chance that we can build the housing our country needs.
Alok Sharma
Fees for planning applications have been the subject of successive regulations since 1981, but have not been increased since 2012. The debate is about a timely and essential adjustment of the fees that local planning authorities can charge. It will still be the case that most planning fees represent a small fraction of the full cost of any development to which they relate, and because the increases are being applied across the board, they do not impact more heavily on particular sectors of business or, indeed, the community.
I want to refer to some of the points made by the hon. Member for Oldham West and Royton. First, I welcome his and his party’s support for these vital regulations and changes. I think we can all agree that we want to see local authorities, and planning departments particularly, funded and working efficiently and effectively. That is precisely why we set it out in the White Paper that we would introduce this increase in planning fees.
The hon. Gentleman talked about the need for further funding. As I noted, in our recent consultation we asked for views on an additional 20% increase, and we will of course review the feedback that we get from that. He also raised the issue of the potential linking of the fees to inflation, using the CPI. As he knows, the regulations do not provide for indexed linking, and we would of course need primary legislation to amend the enabling power. As I set out in my opening remarks, the 20% increase that we hope to implement within the 28 days means that the increase will be greater than if a link to inflation as a measure for increasing these fees had been in place back in 2012.
The hon. Gentleman also raised a point about local authorities having the ability to set their own fees. We do not consider that allowing local planning authorities to set their own fees is the answer to resourcing challenges, as there is no guarantee that the additional income would go into planning services or would deliver efficiencies.
There is also a risk that uncertainty in relation to fees in some areas might dissuade homeowners and small developers from undertaking development and introduce unpredictability when we need developers to accelerate the number of homes they are building. However, I fully accept that we need to keep the resourcing of local planning authorities and the circumstances in which local fees can be charged under review.
The hon. Gentleman raised a number of other points. He talked about trialling or piloting full-cost recovery. Full-cost recovery, by itself, does not provide a link to service improvements. Charging at cost recovery removes the incentives for local authorities to reduce their cost, if they know they can pass the cost directly on to applicants.
The hon. Gentleman raised issues around the permitted development impact of click and collect. I want to clarify that this right applies only within a shop’s curtilage. It cannot be outside someone’s home.
Jim McMahon
Will the Minister clarify whether that includes the outer curtilage—the boundary on the deeds —or just the inside of the property?
Alok Sharma
I will write to the hon. Gentleman to clarify that. The key point is that the impact of this change is not quite as he outlined.
Jim McMahon
I think this is a slightly bigger issue than it has been given credit for. I understood from the advice that this does include the outer curtilage. At a local shop with a click-and-collect service, the locker could be on the outside—right near the front door of a residential property—under permitted development rights in this scheme. This is not for today, but the Government ought to go away and look at the impact of that.
Alok Sharma
If the hon. Gentleman writes to me to set out his thoughts, we will consider them. The changes we are discussing today relate to the permitted development rights regime.
The hon. Gentleman raised the interesting issue of education and investment for planners. We are working with organisations such as the Royal Town Planning Institute to support the education and training of planners through the provision of bursary programmes and other initiatives.
We have debated today regulations and an increase in planning fees that are widely welcomed by local authorities and those who seek planning permission. I reiterate that it is vital we have well-resourced, effective and efficient local authority planning departments to provide new homes and deliver economic growth, as the hon. Gentleman set out. We expect local authorities to match the recommended fee increases with an ongoing improvement of service when handling planning applications. In introducing these changes, we are ensuring that local authorities have the resources to take on and deal efficiently with all increasing demands made of them.
Question put and agreed to.