Frustration over Government refusal to ringfence planning fees

The Mineral Products Association (MPA) has expressed deep disappointment at the Government decision not to ringfence income from increased planning fees to spend on council planning services. MPA is calling on the Government to urgently reconsider the decision.

The Department for Levelling Up, Housing, and Communities (DLUHC) announced this week that, while it would be proceeding with plans to hike planning application fees by as much as 35% from April 1st next year, it would not require local authorities to use the additional revenue raised in processing planning applications, contrary to consultation responses.

This means there is no guarantee that councils will allocate this additional revenue to council planning departments. Underfunding of planning departments is widely viewed as a key reason for the poor performance of many local authorities in dealing with planning applications. Lack of resources creates added costs, delays and uncertainty for applicants, and serves as a deterrent to investment.

Local authority planning department budgets have disproportionately suffered from cuts in public spending compared to other council departments in the last 12 years. Between 2009/10 and 2020/21, local authority net spending per person on planning dropped by 59%, the highest of any service, according to the Institute for Fiscal Studies. The Royal Town Planning Institute has also estimated that net expenditure by planning authorities fell from £844m in 2009/10 to £480m in 2020/21.

MPA has consistently called for increased resourcing for planning departments in order to build capacity, improve services, and deliver faster, better, more consistent outcomes to planning applications. However, DLUHC’s move raises fears that planning applicants will be used as a ‘cash cow’ for councils to subsidise budget shortfalls in other parts of local government, while planning departments remain starved of resources with no improvement in services.

Mark Russell, Executive Director at MPA, commented: “We are bitterly disappointed that the Government has decided against ringfencing income from increased planning fees, despite the wishes of the overwhelming majority of respondents to their consultation.

“This ill-judged decision to increase planning fees without ringfencing the funds raised to support delivery has been tried time and time again, and in every case it has proved to deliver the same result: higher fees but a significant decline in services due to the ongoing under-resourcing of council planning departments.”

“This leads to applicants being treated as captive customers who, because they can’t use alternative service providers, get charged higher and higher fees in order to subsidise budget shortfalls in other areas, while not getting value for money in the service they receive.”

“Planning is an essential service for our economy, and it needs to be supported with ringfenced fees. The Government must urgently reconsider their decision.”

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