Planning application fees to rise from December 2023

Following consultation in spring 2023, the Town and Country Planning (Fees for Applications, deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2023 have been made. Consequently, the increase in planning application fees in England, of up to 35 per cent, will come into force earlier than expected – on 6 December 2023. Whilst this will be seen as good news by many, the Government has back-tracked on plans to make sure councils ring-fence any extra income raised to spend within planning departments.

Under-resourced planning teams

The capacity issues in the planning sector are well-documented and our own experience at Nash Partnership is that allocation of some applications, let alone determination, is currently taking more than six months for some local planning authorities. This can mean that pre-application advice services are given low priority to enable resources to be directed at attempts to clear application backlogs. Indeed, we can quote the example of a pre-application enquiry submitted in October 2022 which has only received a partial response 12 months on, in November 2023, when the target response date was December 2022.

The response by the Local Government Association (LGA) to the Government’s consultation on the proposed fee increases earlier this year highlighted the shortage of both local planning authority funding and staffing and warned that the proposed fee increases would not solve either of these problems. They urged the Government to give councils the flexibility to set planning fees at a local level and made the following key points:

Planning fees do not cover the cost of processing planning applications, with 305 out of 343 local planning authorities operating at a deficit totalling £245.4 million in 2020/21.
To ensure all councils in deficit are able to balance the books, fees would need to be increased by 57%.
Increasing planning fees will not address resourcing and staff retention.

Similarly, a House of Lords committee report on housing supply from June 2021 highlighted ‘the clear need for additional resources for local planning authorities’ as ‘the reduction in their funding is slowing down the workings of the planning system’. Subsequently, the House of Lords debate (17 October 2023) on introducing the regulations noted a shortfall in funding for planning application services of £225m and that the proposed fees increase would raise an additional £65m. Consequently, the increase in fee rates will leave a remaining deficit of service costs over income of some £160m.

In 2020, the RTPI estimated that £500 million over four years was needed in additional funding to implement proposed Government reforms which would require upskilling of planning officers in areas such as design and place-making.

The prospect of an increase in planning fees is generally supported across the development sector, if it will result in improved local authority planning services. At the consultation stage, the National Federation of Builders commented that it was ‘pretty sceptical that these higher fees will achieve an improvement under the current broken planning process.’

The Home Builders’ Federation welcomed the consultation, with Director Sam Stafford, saying ‘the planning profession, and indeed the wider development industry, has been united for some time in calling for more resources for LPAs in order to help build capacity and capability so this consultation is very much welcomed.’ Matt Claxton, Planning Director at developer Tritas Symmetry, acknowledging the impact that planning department under-resourcing is having on the industry, said that ‘the proposed increase to fees is supported if it directly benefits planning service budgets’.

The new planning application fees

There will be an increase in fees for major applications by 35 per cent. All other application fees will increase by 25 per cent. The increase will come into effect from 6 December 2023. From thereon in, application fees will rise annually on 1 April from 2025, in line with inflation, with a 10% cap and a three-yearly review.

Lost opportunity

Given the original consultation document on the increased fees stated that the increase would help address a shortfall of staff and skills within the planning system (a giveaway is the title – ‘Stronger performance of LPAs supported through an increase in planning fees’), it is somewhat surprising that these fees will not be ring-fenced for local planning authorities. It seems a missed opportunity to ensure support for struggling planning departments and inject some much-needed confidence into the development industry.

No more ‘free go’

The current provision for a ‘free go’ within 12 months of a refusal or withdrawal of an application will also be scrapped, but with the proviso that it remains available for repeat submission that meet the relevant conditions and where the 12 month period for a resubmission is still running.

The Government’s reasoning is that removing the ‘free go’ will emphasise the importance of the pre-application stage for discussion and negotiation with the local planning authority. However, as noted above, the lack of resources within local authority planning teams often means that pre-application services are reduced or delayed. There is, therefore, clearly a risk that more appeals will be submitted, potentially compounding the resourcing issue within the planning system more widely, as appeals do not generate a submission fee.

Shorter time period for non-major applications

Under current rules, applicants have the right to a refund if their application is not determined within 26 weeks and an extension of time is not agreed. For non-major applications this will be reduced to 16 weeks. For those authorities which are already under-resourced and not hitting current targets this might be a further blow to income. The RTPI reported that less than 50% of planning applications were decided within statutory time limits in 2021. Even non-major developments can be complex and extensions of time are routinely agreed by applicants to enable planning issues to be resolved. Whether this measure will bring significant benefit in reality remains to be seen.

Interestingly, the Government’s response on the consultation undertaken on the proposed increase in planning fees states that extensions of time will continue to be available in ‘exceptional circumstances’. There will no doubt be further guidance on what constitutes ‘exceptional circumstances’ but this would be a significant change in terms of flexibility to negotiate solutions, using what is currently the common practice of extending determinations deadlines.

Other funding routes for LPAs

In addition to the fee increases, local planning authorities have been able to apply for grants of up to £100,000 to help clear application backlogs and fill skills gaps under the £24 million pound ‘Planning Skills Delivery Fund’ (PSDF), launched by the government earlier this year. Decisions on successful applications were due to be made in October 2023 but a public announcement is currently awaited.

Linked to the Fund is the Government’s Planning Skills Strategy, publication of which will come in ‘due course’, with more details to be provided on a timeline, according to the Minister of State for Levelling Up, Housing and Communities during the House of Commons debate (25 October 2023) on the introduction of the planning fees increase.

Most recently, the Autumn Statement, presented on 22 November 2023, incorporates £32m ‘…across housing and planning to unlock thousands of homes across the country.’ This ‘includes’ additional funding to help clear local planning authority backlogs, but further details are awaited. The Statement also promises ‘…new premium planning services across England with guaranteed accelerated decision dates for major applications and fee refunds wherever these are not met.’

An improved planning service?

The increase in application fees will provide additional income to enable local planning authorities to boost the capacity of their planning teams. However, given the absence of ringfencing and the parlous state of local authority budgets, some of this money may end up filling budgetary holes elsewhere. Having said that, even if all of the additional fee income does go towards improving planning services, the shortfall of around £160m will remain, albeit potentially reduced by a further £24m through the PSDF and also some of the £32m announced in the Autumn Statement for housing and planning.

It is also the case that funding is not the only issue. It is well documented that the lack of resources and pressure on planning officers has hit morale, recruitment and retention. The planning system has perhaps also moved towards a more reactive approach, losing some of the forward-looking and delivery-focused skills that are needed. The promised Planning Skills Strategy is therefore a vital part of restoring the capacity of public sector planning services. This needs to be set within an ethos which reflects the vital role that positive planning plays in helping to deliver thriving places and communities.

Planning application fees in the context of delivering thriving places and communities — Photo by Jonny Gios on Unsplash

And, coming full circle, whilst money is not everything, a good, efficient and effective planning service comes with a price tag. Public funding generally is, of course, greatly constrained. However, an important question is whether, by not fully funding local authority planning services, value for money is achieved or are long-term costs actually increased through inefficiencies and a forgone contribution to economic growth?

So, the confirmed increase in planning fees, together with the announced PSDF and Autumn Statement funding, is an important start, but there is a good deal more to do if we are to have a public sector planning service that can do the job that we all want it to.

Contact Nash Partnership’s Planning team for more information.

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