Fees fail to speed planning system
Copyright: David Lawson - first published Property Week June 2005
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Planning fees jumped sharply in April, taking costs for a major development as high as £50,000. Cash-strapped local authorities breathed a sigh of relief but now face a barrage of new criticism unless waiting lists begin to shrink. Ministers boasted that fees would enable planning authorities to bring in new staff to eliminate delays but few have seen any improvement. Decisions may be faster, as councils compete to win a larger planning delivery grants but quality has declined. Applications are often rejected rather than negotiated in an attempt to speed development.
Planners are caught between two powerful critics. The Chancellor made barely-veiled threats in a pre-election speech that he would act if local authorities obstructed business expansion. Meanwhile, developers and land owners are losing patience. ‘There are no signs that the system is getting any better. If anything, it is worse,’ says Gareth Capner, senior partner at consultant Barton Willmore. But is this all the fault of incompetent bureaucrats? Paula Carney, a senior director at international planning RPS, has some sympathy with local authorities. Fees were frozen for three years until April, despite a huge workload increase.
Some ran out of resources and even with higher fees they will continue to have problems finding enough planners, filling gaps with youngsters brought in from countries like Australia. ‘I have a tremendous respect for how hard they work,’ she says. ‘I often get calls at 8pm when they are still in the office. But they don’t have enough people, nor the same intimate knowledge of the UK planning system, so there are bound to be problems.’
The government has effectively negated any increase in resources by adding huge complexity to planning. Carney indicates a typical application on her desk which includes reports on design, transport, contamination, noise, sustainability, energy, telecommunications and daylighting. ‘And that is on something not even large enough to require an environmental statement,’ she says. Local authorities often lack the skills, let alone numbers, to consider all these specialist areas and have to use scarce resources to pay consultants.
But this cuts little ice with developers who only see extra bills. Capner has just put in a scheme for 1.25m sq ft on former MoD land west of London for Crest Nicholson Morley which has totted up charge of £41,000. A new system involving pre-application discussions with planners to iron out problems and reduce delays has merely added to the bottom line. ‘We have been given quotes of up to £2,000 per meeting, says Capner.
While Westminster City Council has hit the headlines for making these charges, the problem is spreading. He estimates that around 10% of local authorities have now picked up the idea for raising extra resources. But this can be a mere pinprick compared with the pain inflicted by a bewildering array of indirect charges. Developers have long accepted the requirement to pay for ‘planning gain’ or ‘community obligations’ – polite terms for subsidising roads, schools and other local facilities. As council coffers dwindle, however, these demands have become increasingly ambitious, particularly since local authorities enthusiastically adopted government advice to load provision of social housing onto private sector developers.
These were supposed to be rationalised under the new Act into a system of tariffs but the idea disappeared onto the back burner as the government turned attention to more important matters of winning the election. It has also been blurred by suggestions of a development tax floated by Kate Barker in an investigation into boosting housebuilding. The Office of the Deputy Prime Minister is expected to decide which way to jump by the end of the year. Capner fears ministers could be tempted to impose both tax and tariffs. And local authorities will continue to demand a further raft of planning ‘contributions’ based on evidence about the way they have unmercifully milked the current system.
The ‘bible’ for planning gain is Circular 1/97, which says all demands must be linked to the development involved. But local authorities interpret that widely and have even introduced their own price lists such as £1,500 for a primary school place. Many developers cave in because they can set costs against the amount paid for land. But Capner urges even the smallest to dig in their heels, otherwise they set precedents for ever-widening demands and pile up costs. Agreeing to as much as 50% social housing, for instance, has added as much as £20,000 to homes in West Berkshire. But at least developers can budget forward when they know how much will be required. It is the uncertainty of dealing with different demands from each council which drives them to distraction.
Proposals for a ‘roof tax’ in the huge expansion zone around Milton Keynes, have won strong backing because this sets a fixed charge. The idea is not new, according to Carney. The gaggle of developers involved in the Millennium Quarter in London Docklands contributes to a pool which pays for the planning team at Tower Hamlets. Other council such as Kingston in west London have also used this technique. But she says the legality is still untested and could be open to challenge at appeal. Capner also warns builders not to take uniform charges at face value. ‘You have to dig deeper as they may still mask other charges planners may demand for individual developments,’ he says.
Increases in planning application fees have mainly hit major developments, with maximum fees rising as much as five-fold, according to consultant Development Planning Partnership. But its summary of the changes show rises right across the board.
Up to 50 homes - fee per dwelling has increased by £45 to £265.
More than 50 homes - £13,250 plus £80 for each dwelling over 50 to a maximum £50,000. The previous limit was £11,000.
Example: outline application for mixed-use development on 15 hectares risen from £5,500 to £16,625. Outline applications for over 25.5 hectares attract the maximum £25,000.
Full and Reserved Matters
2.5 hectares or below £265 for each 0.1 hectare (an increase of £45).
Over 2.5 ha - maximum increased from £5,500 to £25,000, based on £6,625 plus £80 per 0.1 hectare above the 2.5 hectare threshold.
Example: 100 homes £17,250 (previously the maximum £11,000). More than 460homes merits the maximum £50,000.
Maximum for more than 3,750m2 (40,359ft2) increased from £11,000 to £50,000 calculated on the basis of £13,250 plus £80 for each 75 sq m above the threshold.
Between 75sq m and 3,750 sq m, the fee is £265 for each 75 sq m.
Example: retail development of 7,500 sq m (80,000 sq ft)gross increased from £11,000 to £17,250. Developments over 38,000 sq m (408,880 sq ft)charged at the maximum £50,000.
Fees for other types of application have been increased generally in a range from 20% to 25% but some maximum levels have risen substantially.
Change of use to residential follows the same pattern as outline and full applications. For up to 50 homes the fee has risen by £45 to £265 per new dwelling and a further £80 per dwelling in excess of 50. The maximum for outline and full applications has more than trebled to £50,000.