Ringfence alarm bells

Figures published by the National Audit Office suggest the value of net spending on planning and development services in 2010-11 would be worth about £2.4bn today. The budgeted net spend for planning and development in the 2023-24 fiscal year is just over £1.6bn. In other words, about £800m – or a third of annual funding in real terms – has been lost to planning departments since the Conservatives took office in May 2010.

Small wonder that so many who responded to the government consultation on planning fees thought it might be wise to pay more, in the hope it might yield a better, quicker and more consistent service – or at least one or two of the above.

About 45% of respondents were local planning authorities themselves, more than nine out of 10 of which (92%) supported the notion of raising fees for major applications by 35%. But even among developers and businesses, support for higher fees on major projects stood at 62%. Across all respondents, support for a 35% hike in major-application fees was widespread, at 77%.

Support for a 25% rise on non-major applications was not quite so strong but dissenters remained in the minority. With some justification, therefore, the government has gone ahead and green-lit both fee increases, with draft regulations laid before parliament by the housing minister immediately before the summer recess. The regulations also approve another change – to link fees in future years to the Consumer Prices Index, with an annual increase every April, starting in 2025.

An even greater majority was in favour of another proposal put forward in the consultation: to ringfence the additional income for planning. Overall support for this idea among respondents came in at 88%, or quite a bit stronger than the support for the fee hike itself.

One wonders why this sensible-sounding idea was floated in the first place, given that the government has no intention of adopting it.

“We welcome the strong support for this proposal,” the consultation response notes. “We want to ensure that the fee increase results in additional funds being available to local authority planning departments, but we will not take ringfencing forward through legislation as this would impose a restriction on local authorities when they are best placed to make decisions about funding local services.”

This, presumably, is code for ‘some of this cash will be shovelled into social care’.

The most credible justification for not ringfencing is to note that the existing budgets for planning departments are not centrally determined. In turn, this poses the threat that base budgets might be cut by amounts coincidentally similar to the new sums ringfenced, leading to no real change. Central government is understandably reluctant to get involved in that kind of squabble.

The government simply says: “We would expect local planning authorities to protect at least the income from the planning fee increase for direct investment in planning services.” In other words, it is asking councils nicely to do the right thing.

Higher fees are coming. Time will tell what happens to the cash.