Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2023

Baroness Pinnock Excerpts

Tuesday 17th October 2023 Lords Chamber

All told, I am very glad to have the opportunity to welcome these government regulations.

[Baroness Pinnock (LD)]

My Lords, I remind the House of my relevant interests as a councillor and a vice-president of the Local Government Association. I thank the noble Baroness, Lady Swinburne, for her detailed explanation of the content and purpose of the changes proposed to planning fees. She obviously thought that at least someone in the Chamber today would raise the fundamental concerns about full cost recovery; I will raise that issue because it is vital that it be considered.

There are two big issues of principle to raise, the first of which is why planning fees are set nationally for England. We have spent many months in this Chamber discussing levelling up, and part of that was a discussion about devolution to local areas of England. Surely, if we are serious about devolution, one aspect would be to devolve responsibility to set fees and charges for planning locally, as indeed it is, I think, for nearly every other fee and charge that a local authority can levy. The Government worry that varying fees will lead to inconsistencies across the country, but that is the very essence of devolution: that local fees are set according to the area in which they are made and the area a council represents. I suspect that there must be varying costs to planning applications—for instance, in London boroughs compared to some other parts of the country where costs are not as high.

My second major concern is the failure of these proposals to enable full cost recovery. The Government’s own assessment estimates that, currently, council tax payers are subsidising the planning service to the tune of £225 million a year. For me, it is totally unacceptable that council tax payers, who are often very hard pressed, are funding, for example, major developers who are making vast annual profits. The cost of a planning fee against the total cost of even a so-called minor development is very small as a proportion of the total, so surely full cost recovery must be not only fair but justified in not requiring council tax payers to subsidise developers. These regulations provide the opportunity to remedy that unacceptable situation, so perhaps the noble Baroness can think again about not enabling full cost recovery.

The noble Lord, Lord Lansley, said that he hopes that the increase in fees will not lead to a reduction in local authority subsidy for the planning service. I have to disagree with him, because I think the whole purpose of a rise in fees is to reduce the subsidy paid by council tax payers for the service. Otherwise, we should have full cost recovery, because many local authorities are on the verge of issuing Section 114 notices, which indicate that they have run out of sufficient money to run services as a whole in their areas.

Only today, I received an email on behalf of London Councils saying that it estimates that its councils will run short by £500 million in order to provide statutory services. Given that that is replicated across the country, it seems totally wrong for councils to take money from their budgets to subsidise planning development when they are making cuts to children’s services and adult social care. I urge the Minister to go back to the department and suggest that full cost recovery would be a better way forward.

On the details of the proposals, of course, given what I have just said, I welcome the increase in fees, which is better than nothing. However, the Government’s own estimate is that the proposal to increase fees by 35% for majors and 25% for all others will transfer £65 million of costs to planning applicants but will still leave a shortfall of £125 million of subsidy for local planning authorities. I could not reconcile the figures in the Explanatory Memorandum for the regulations, so perhaps the Minister can do that for me. There is a current shortfall of £225 million and a fee increase of £65 million, and yet apparently a resulting shortfall of £125 million. Those figures do not add up, so something must not have been provided in the Explanatory Memorandum.

[Lord Lansley (Con)]

Is it not to do with the removal of the “free go”, which I think is worth about £25 million in itself? However, the other changes, not just the fee changes, are the reason.

[Baroness Pinnock (LD)]

I thank the noble Lord; that probably is the explanation. However, it would be good to hear the Minister to confirm that.

The issue I still have is that if we do not have full cost recovery, local planning authorities will not be able to appoint all the planning officers that they need to provide an efficient and effective service. We know that the Local Government Association and other professional bodies have indicated that 58% of councils overall and 83% of county councils have trouble filling planning posts, and the RTPI reckons that one in 10 planning posts are currently not filled. Therefore, unless the fees are increased more than is proposed here, that challenge will remain, which will then lead to a less efficient and effective planning service. I hope the Minister will be able to respond to that, because it is at the heart of what is proposed today.

The other significant issue I have is with the way the planning guarantee works in practice. Of course, it is right to have a requirement to fulfil confirmation of planning applications in a timely way, but the starting point of a planning guarantee is that an application is “valid”. This can mean that the applicant has supplied the relevant information, but it does not mean that the content of the information is of the necessary standard. Herein lies the problem.

--- Later in debate ---

[Baroness Swinburne (Con)]

My Lords, I thank noble Lords for their thoughtful contributions. If they can bear with me, I have a lot of inserts and Box notes which I have been handed, so this may not sound like a closing speech. I will endeavour to answer the questions rather than to sound too eloquent.

I covered ring-fencing in my opening remarks, but I should be clear on why we are not saying that this additional income generated should be ring-fenced: it is because it is in primary legislation. There is a requirement for planning fees to be used by the local authorities to perform the function of determining planning applications. That is already in primary law so it is does not need to be restated here in a different format. As there is no surplus to planning fee income, logically there is no overspend that could be used to cross-subsidise other services. We therefore do not believe that this has to be ring-fenced.

However, I agree that, having made clear to all local planning authorities that they are expected to retain the income from planning fees for direct investment in their planning services, we should reiterate this expectation after the regulations are made. Indeed, I hope to have reassurance in writing from my department that we will monitor how these fees are generated and used.

I come to the issue of whether performance will be enhanced and how it will be monitored. In return for increasing planning fees, we expect local authorities to invest more in their planning services and deliver better performance. The fee increase provides the opportunity for authorities to consider how they might use that additional income to improve their performance and whether they are resourcing their planning application service adequately. We need to see them assessing this for themselves.

We are also developing a new framework that will measure that performance across a wider set of criteria to ensure that local authorities are delivering on all fronts, for all users of the system. That is really important. I am sure that the department and certainly the noble Baroness, Lady Scott, will welcome the involvement of the noble Lord, Lord Lansley, and his thoughts on how to develop service level agreements further.

A “free go” was mentioned by many noble Lords. We recognise that a free go has a significant resource impact for local planning authorities. Therefore, if applicants still want to arrange an extension, they can, but they cannot have a free go. I hope that has a positive impact on planning departments’ ability to resource planning efficiently.

I know that planning authorities setting their own fees is controversial. There are some who believe that they should be able to set their own fees, at an appropriate level. However, as I mentioned in my opening remarks, there is also a risk that fee variation between areas could dissuade home owners and small developers from undertaking development. It could introduce unpredictability at a time when we need developers to accelerate the number of homes they are building and to support economic growth. I am sure that that objective is supported across the House. A national fee increase ensures that all planning authorities can benefit, so we consider that to be the appropriate measure in the meantime.

Why do fees not cover the full cost of that planning application service to local planning authorities? It is fair to say that we want to proceed in a measured way. It is important that we provide additional resourcing to local authorities without disproportionately impacting businesses and householders. If we were to set full cost recovery now, we could see a substantial rise in some fees that could adversely impact potential developments. I reassure the noble Baroness, Lady Pinnock, and others who mentioned this that we intend to undertake a wider review of the actual cost of processing different types of applications, as the proposed planning reforms are implemented and the savings, particularly from digitisation, are realised. In future, we might see fees relate more directly to the cost of the service itself.

The noble Baroness, Lady Pinnock, is correct that there is a difference in the numbers that I mentioned in opening. Between the £225 million deficit and the £65 million new funding being raised, there is a difference of £160 million. As was mentioned by the noble Lord, Lord Lansley, there are measures that will make an impact on that, including the free go.

I also draw your Lordships’ attention to the fact that local planning authorities are, we believe, under- resourced, but there are ways in which we are addressing this. Staffing issues and efficiencies were mentioned. We have developed a comprehensive planning, capacity and capability programme, which provides the direct support that is needed now and upskilling opportunities for existing planners, while developing the future pipeline into the profession. As part of this, we have also launched a new £24 million planning skills delivery fund; this will directly support local authorities to help clear the backlogs of planning applications and to address skills gaps. We have also announced an additional £13.5 million to stand up a new super-squad of experts to support local planning authorities to assess specialist resources to accelerate the delivery of homes and development, starting with the activities in Cambridge with which the noble Lord, Lord Lansley, is familiar.

[Baroness Pinnock (LD)]

I thank the Minister very much for giving that detailed explanation. Is she willing to put it into a note for Members, so that we can see exactly how it will all add up?

[Baroness Swinburne (Con)]

Absolutely. I am sure that my team in the Box and back in their offices are monitoring this very closely to make sure that I am not saying anything I should not.

We monitor the financial health of all local authorities on a regular basis, using a wide range of data as well as extensive engagement with those local authorities. We stand ready to speak to any council that has concerns about its ability to manage its finances and the pressures that planning is putting on them.

In conclusion, I reiterate that we believe it is vital that we have a well-resourced, effective and efficient local planning service, and the House seems to agree with that. The measures in these regulations support this ambition by providing much-needed additional resources for local planning authorities. The Government are clear that the income from planning application fees should be used by local authorities to provide a high-performing planning service. This is essential to deliver the homes and economic growth that our country needs.