Taxpayers forced to subsidise planning application costs by £1bn

Local taxpayers will be forced to spend £1 billion covering the cost of planning applications by 2022, the Local Government Association warns today.

Planning fees are set nationally, which means councils are prevented from recovering the full cost of processing the 486,500 planning applications they receive on average each year.

Since 2012 – the last time the national fees were increased – communities have footed the bill for as much as a third of all planning applications. This represents desperately-needed resources being diverted away from other vital local services.

Analysis by the LGA reveals the bill for local taxpayers to cover the cost of planning applications is growing at a rate of around £200 million a year and will reach £1 billion by 2022. This is the equivalent of:

• Repairing 4.35 million potholes – potholes cost £46 to repair, on average.
• Providing grant funding to help councils and housing associations provide 8,507 new affordable homes. The Homes and Communities Agency, on the last round of funding allocation through the Affordable Homes Programme, issued an average grant per home of £23,510.
• Creating more than 828 miles of public pavements, almost 4 times the length of the M6 – footways are estimated to cost around £150 per meter.

The LGA is warning this ongoing fees shortfall is hampering planning departments’ ability to stimulate housing growth in communities.

With councils facing an overall £5.8 billion funding gap by 2020, the LGA is calling on government to urgently bring forward its Housing White Paper commitment, to allow councils to increase planning fees, and also commit to testing a fair and transparent scheme of local fee setting, to allow councils to recover actual costs.

Cllr Martin Tett, LGA Housing spokesman, said “It is wrong for communities to keep being forced to spend hundreds of millions each year to cover the cost of all planning applications.
“Councils are working flat-out to approve almost nine in ten planning applications, with the majority processed quickly.

“But the shortfall in the amount of fees councils can charge and the cost of processing applications is heaping further pressure on the stretched planning departments which are so crucial to building the homes and roads that local communities need.

“Councils need to be able to recover the actual cost of applications and end such a needless waste of taxpayers’ money.

“Locally-set fees would also allow councils to prevent increased costs being passed on to residents, while developers could contribute more to maintain high-quality planning decisions, and improve the ability of councils to speed up the planning process.”