With the Government aiming to introduce reforms to the country’s town and country planning system through the Planning and Infrastructure Bill (‘the Bill’), the Government is overhauling the approach to planning application fees in England – specifically to pass powers to allow local planning authorities (LPAs) to set their own fees.
As the Bill proceeds through its final stages, the relevant provisions in the Bill appear to be settled and so this article considers the changes and what they mean for different stake-holders in the English planning system.
Current System
Planning fees are set nationally by the Secretary of State of Housing, Communities and Local Government (the Secretary of State) through section 303(1) of the Town and Country Planning Act 1990 (TCPA). As such, LPAs do not currently have the authority to set their own planning fees and the nationally-set fees do not take into account variations in costs experienced between each LPA despite the different requirements and potential impediments faced. Consequently, the application fees currently charged by LPAs do not cover the cost of carrying out their planning functions and the Government estimates there to be an overall funding shortfall of £362 million per year. ([1])
Additionally, statutory consultees or bodies are presently unable to charge or recover any of their costs for carrying out their statutory functions. This is in contrast to Nationally Significant Infrastructure Projects in the DCO regime, which allows for cost recovery for statutory consultees. This has caused an imbalance in the spread of resources between these different regimes and the potential for lower-quality services being provided in TCPA applications, despite there being a larger volume of applications under the TCPA compared to the DCO regime.
([1]) Ministry of Housing, Communities & Local Government, Loal authority revenue expenditure and financing England: 2023 to 2024 – second release, 12 December 2024.
Proposed Reforms
The Bill proposes to insert an amendment into section 303 of the TCPA for the Secretary of State to make regulations to authorise or require local planning authorities in England to set the level of a fee or charge in respect of the performance of any planning functions. This will enable local planning authorities to set fees or charges at a level up to, but not exceeding, cost recovery for planning applications where a fee is payable.
This new ability or requirement is set to come with a number of safeguards to protect Applicants from excessive or unjustified fee increases, which include:
- Certain requirements that LPAs must meet when setting planning fees or charges, including;
- providing the consultation carried out in setting the fee or charge;
- setting out the criteria applied in setting out the fee or charge;
- publishing information or reports;
- obligations to notify the Secretary of State;
- reviews of the level of the fee or charge;
- Income from planning applications fees must be applied towards the relevant planning function; and
- The fee or charge does not exceed the cost of carrying out the planning function for which it is set.
Further, the Secretary of State may intervene and direct an LPA to review and, if necessary, amend their planning fees or charges when they consider them to be inappropriate.
In circumstances where statutory or outside bodies are consulted or are required to provide support in a planning application process, the Bill also allows the Secretary of State to impose a surcharge on the fees to cover their costs.
What Does This Mean
Local Planning Authorities
The above reforms will, of course, only have effect in practice if the Secretary of State proceeds to make the necessary regulations. However, the ability to set their own level of fees and charges should ensure that LPAs are not left out of pocket or with a shortfall when carrying out their planning functions. This is intended to prevent carrying out these functions from being a burden on LPAs and to result in improved processing of applications.
As any fees or charges set will be subject to oversight from the Secretary of State, local authorities will need to ensure they remain transparent in their fee setting and to keep accurate records to justify any increases. LPAs should be aware that where a fee or charge has been directed to be reviewed or amended after being determined to be inappropriate, the Secretary of State may make regulations that provide for the repayment by the LPA of the whole or part of the fee or charge.
Guidance is set to be provided from the Government about what costs should be considered by LPAs when calculating fees and on what planning functions income from planning applications can be spent.
Applicants
While these amendments will likely result in an increase in planning application fees across all local authorities, there is hope that this will lead to a more efficient and reliable process for Applicants. In principle, this increased income will lead to direct improvements in the delivery of a LPA’s planning functions and providing transparency to Applicants as to how their fees are being spent by the LPAs.
Once the Secretary of State has made the necessary regulations under the new power, Applicants will need to budget for the potential increase in application fees and any surcharges for the benefit of statutory consultees.
Whilst much of the detail here is dependent upon the Secretary of State’s regulations, one conceivable by-product of the new system of application fees will be a reduced need for planning performance agreements (PPAs) between Applicants and LPAs. As PPAs often provide for the recovery of the remainder of costs not covered by application fees, there may be less of a need for them if LPAs are adequately compensated for their work by the amended planning application fees. This will be an interesting space to watch develop.
Statutory Consultees
The amendments are a boon for statutory consultees since it will create a mechanism for them to recover money spent on carrying out their statutory functions in relation to TCPA applications. This should encourage statutory consultees to dedicate more resources to TCPA applications and bolster their capabilities to deliver quality advice in a timely manner.
Concluding Remarks
The changes to the setting of planning application fees in England contained in the Bill are aimed at addressing the challenges faced by LPAs and to provide an improved planning system. This includes addressing the current funding shortfall for LPA development management services that is adversely affecting their ability to provide optimal service.
While the ability to set their own planning fees should benefit LPAs, the likely increase in fees that will result from this is unlikely to be welcomed by the development industry unless they too see the benefits in the form of an improved planning system. The worst outcome for those applying for planning permission will be increased fees with no discernible improvements to the current service.
Applicants should be encouraged in this regard by the safeguards that the Government is incorporating to ensure that the fees are linked to the planning functions to which they relate. Only time will tell if these reforms will actually lead to an improved planning application process, not least because they are entirely dependent on the Government first making the necessary regulations under the new power. Currently, there is no set date as to when this will happen. Given the potential impact on day-to-day practice, LPAs, applicants and statutory bodies in England should all remain alert to this – the timing and detail of these regulations will matter.
