Housing and Planning Bill
Debate between Lord Kerslake and Lord Foster of Bath
Lord Foster of Bath (LD)
My Lords, I am very happy indeed to have my name associated with Amendment 108. The noble Baroness, Lady Gardner of Parkes, has eloquently set out the case. The current fee levels are determined centrally by government and they do not enable council planning departments to achieve full cost recovery. London Councils claims a shortfall of around £40 million a year, while we have heard from the noble Lord, Lord Porter, that the LGA estimates that the shortfall across the country is some £150 million a year. The fees were last reviewed in 2012 and the future is very uncertain. The Government consultation finished only at the end of last week, and we have no idea what the outcome will be.
I am sure many noble Lords were as pleased as I was to receive what has now become the almost ritual letter from the Minister just a few hours before each of our sessions debating the Bill. But I note that in today’s letter we are told that, because of the high response rate to the consultation, she is unable to share with us any information about what respondents have said or, indeed, how the Government will react. But the Minister has already admitted in answer to my questions in Committee—and it is repeated in the letter we received today—that it is likely that councils will get an inflation-based rise, with those deemed to be poorly performing getting even less. So the shortfall will continue, and many hard-pressed planning departments will be unable to give the quality of service they would like and that developers need and deserve.
The Minister offers in today’s letter one small glimmer of hope, where she refers to,
“greater fee flexibility for the truly radical”.
I hope she will be able to offer some insights into what she has in mind. I genuinely believe that councils are capable of radical approaches to service delivery—indeed, there are many examples that demonstrate this—but the ability to set fees at a reasonable level must surely form part of any package. I simply cannot see any of the external agencies that the Government want to involve in planning process work being willing to undertake it if their fees are to be equally constrained. Yet, where planning departments have been allowed to charge realistic fees, such as for pre-planning applications, many have developed an efficient, speedy and high-quality service. Were councils able to charge realistic fees that at least recover their full costs for their main planning functions, I am confident that the quality and speed of work would improve, to the enormous benefit of developers. It should be noted that such fee increases would in the vast majority of cases be very small in comparison with the other very much larger costs incurred in any development of any size, and that the negative impact would be more than outweighed by the benefits of the improved service offered.
I know that some noble Lords will have concerns about subsection (2) of Amendment 108, which would enable councils to set fees or charges that,
“may exceed the costs incurred … in performing the functions relating to the relevant project”,
but there will be cases where planning fee costs, if at full cost recovery for a small development, may well deter that development. If the overall costs of the planning department can be spread so that larger developments take a little extra of the share and thus enable the fees for smaller developments to go ahead, we can have the best of both worlds. I say to the Minister that this would in no way be contrary to the requirements imposed on local councils in the Local Government Act 2003, which makes it clear that councils are under a duty to ensure that, taking one year with another, charges do not exceed the cost of provision. Therefore, taking a little less from some developers and putting a little more on others is perfectly legitimate in existing legislation.
The Government continue to claim that they support localism. They can demonstrate that by supporting the amendment. Should they fail to do so, I hope there will be an opportunity to test the opinion of the House, but I hope that will not be necessary.
Lord Kerslake
My Lords, I speak very briefly in support of the spirit behind the amendment and what is sought to be achieved. I will not repeat the arguments that have already been made, but I will refer to the experience I had during the London Housing Commission, where I consulted extensively with developers across every type and scale. The consistent and unanimous view of all those developers was that they were willing to pay more to get a better service.
What they described to me was a service that was truly struggling to do the job, where major and important applications were held up through the absence of good-quality staff and where they often experienced dealing with temporary staff who were learning on the job and did not have the authority to make decisions. This is, in any description you care to think of, a false economy. The improvement by way of inflation will be helpful but it does not go to the heart of the core problem, which is that, in the situation of severe funding challenges in local government, authorities are unable to resource, in the way that is required, the level of planning services that we need to deliver the increase in housing supply.
I am absolutely of the view that there should be a link to performance here, but I also believe very passionately that we should give local authorities the local initiative and flexibility to set their own fees. Over time the consequence of this will be that they will be able to plan for increased resources and, crucially, recruit new, skilled staff and rebuild a profession which, in the public sector, has been severely reduced in its capacity.