Government unveils plans to allow councils to set own planning fees

The decentralisation minister Greg Clark has launched a consultation on scrapping the national fee charging system by April 2011 and instead allowing councils to set fees at whatever level is needed to recover costs.

The proposal is aimed at plugging a £230m shartfall in the cost of running the planning system, although councils would not though be able to use the fees to make a profit.

Clark said the previous system had left local taxpayers subsidising property developers because the fees were set at uneconomic levels.

“Having a system where Whitehall dictates to local councils what planning fees they can charge is very unfair for local taxpayers who are left paying for the shortfall where fees don't cover costs,” Mr Clark said. “Letting councils set their own fees is a much fairer system for both the applicant and the local taxpayer and will ensure there is flexibility in the system to recover the actual costs of applications.”

The Planning Officers Society welcomed the proposal, but its president Stephen Tapper warned: “We should try to avoid adjoining authorities poaching much needed regeneration development from one another; we don’t want a fee price war.”

It will issue guidelines on how councils can demonstrate the costs of their planning service on a consistent basis, allowing for easy comparisons.

The Local Government Association also welcomed the consultation.
Its environment board chair Gary Porter said: “Allowing councils to charge the full cost of processing planning applications will help plug a £230m black hole in the planning system.

“Last year town halls had to subsidise developers by more than £500 for every planning application submitted because rules set in Whitehall prevented them charging the full cost.”

The Department for Communities and Local Government said its research showed fees were on average 10% below cost recovery levels, with an average cost of £619 per application and an average fee of £563.

A copy of the consultation is available here: http://www.communities.gov.uk/publications/planningandbuilding/planningfeesreport