Proposals for a fairer planning fees system have been proposed by the Department for Communities and Local Government.
At the moment local council taxpayers have been left subsidising the costs of dealing with planning applications.
Councils have been unable to recover the true costs of applications because of a fixed fee charging system set by central Government. This has meant local taxpayers having to make up any shortfall in revenue through their council tax bills.
Local authorities and developers have argued for greater flexibility in the system so there is enough revenue to cover the costs. Under new proposals – set out today in a consultation – local councils will be given the power to set their own fees to cover costs. They will not be able to make a profit on fees but they will be able to recover the actual cost of submitting an application from those benefiting.
Decentralisation Minister Greg Clark said:
"Having a system where Whitehall dictates to local councils what planning fees they can charge is very unfair for local taxpayers around the country who are left paying for the shortfall where fees don't cover costs.
"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."
David Cook, Chief Executive at Kettering Borough Council said:
"The current system of nationally set fees means that, typically, councils don't recover the full costs of processing large commercial planning applications. This cost has to be met and thus results in an extra burden on local council tax-payers. The proposals in the consultation should address this."
Simon Loomes, Strategic Projects Director at The Portman Estate added:
"I welcome the consultation on decentralising planning application fees to the local level. It is essential that local authorities are properly resourced to respond in a proportionate and timely way to applications which in the main represent economic progress."
National fees fail to take into account that local authorities have different resources and so incur different costs. Councils setting their own charges will mean fees in some areas may increase but similarly in other areas fees will fall to cover actual costs.
Research commissioned from Arup in February 2009 to re-examine planning application costs and fees suggests that fees were approximately 10 per cent below associated costs. This is based on an overall average cost of £619 per application and an average fee of £563.
If proposals on decentralising planning fees are taken forward following consultation, local authorities will be able to set their own fees from April 2011. They will be given six months from April to October to publish their fees. During that period they will be able to use the current fees set by Government; these will be withdrawn in October.
Planning application fees constitute a very small portion of development costs – less than half a percent. Business will benefit from fees that are more transparent and more accurately based on cost.