This is one of two pieces on setting fees – see also the companion post on practicals. It’s written at the end of June 2011, when there hasn’t even been an announcement on localisation of fees, let alone any details. It’s based on some thoughts I’ve had and ideas I’ve stolen from front-runner work I’ve been doing with some volunteer authorities (bless you).
The post is written to help discussions between heads of service and their leadership teams.
Pareto in planning
It’s always been true, but the way the new fee structure looks it’s easier to see. 80% of your application activity is spread across 20% of the available codes. These codes are important, but also easier to understand – they represent your bread & butter work. You can do some sampling, they’re part of the management of people’s workload that your teamleaders already do.
So, what do you do with the other stuff ? In fact, what do you do for those fee categories where you’re pretty sure that you’re not ever, ever going to see an application ? Take, for example, the biggest category of housebuilding – applications of more than 4,000 units. Most councils – short of earthquakes, tsunamis and volcanoes – will never see an application of this size. So what should go on the fee schedule ?
My initial thought was “who cares ?”. The way the model is structured, it get’s multiplied out by a quantity to form your anticipated income. Anything times zero is zero. You could price this 4000-unit application at a zillion pounds and it wouldn’t disturb the rest of your model at all.
But that fails to recognise the world that we live in. Our fee schedules will be pored over by people wanting to turn them into news headlines, or to use one council’s numbers to bash another. “Council fatcats award themselves a zillion pounds” doesn’t actually reflect reality, but by then it’s too late to engage in a story of how one part of a fee-setting model balances with another.
If we were estate agents, we would use “POA” and invite interested parties to come in and talk. I don’t think we can do this, as the development industry need some assurance that they can submit an application and proceed to non-determination without getting caught-out by instransigent councils failing to agree a fee.
So, question 1:
Without spending loads of time on it, and without having either gaps or enormous prices in your schedule, how do you signal “negotiate” to potential developers ?
What sort of work goes into your schedule ?
The principle of how the model works is that the resources and the work must be in balance. Easy to say, tricky to do, difficult to live with. Amongst other uncomfortable truths, it means that if work volumes decrease you have to get rid of people. The good news is that if work increases you don’t have to get everyone to work 10-hour days – you can employ more.
But wait. What if you suspect that a tricky application might appear next year – a greenfield landfill site. Should you put it in your schedule, alongside your best guess at the handling cost ? The answer is probably “no”, and here is why.
Problem 1 is that if you’re not careful you’ll apportion your current resources across your applications (to create a model in balance). Then what happens if the application doesn’t appear ? You’ll have to reduce. Too late you’ll reflect that you should have used your “annualisation” sheet to add more resources in, to cope with this mega application.
Problem 2 is nothing more than these rare, diverse applications are intrinsically difficult to resource. The chances of you guessing the cost – given the unknowns unknowns arising from consultation and committee – are about nil.
So, you decide not to include it. What’s the harm ? You negotiate via a PPA and separately organise a process and its resources. And because it’s a PPA you can agree to review the agreement itself as it goes through its various milestones and gateways. Great.
But where, on reflection, does it make sense to draw this line ? Should you also assume that the largest residential schemes will go via a PPA ? What about going down the foodchain from the “biggest” to merely “big” ?
So, question 2:
Should it make sense to assume that all big, awkward applications are separately managed via a PPA ? Should you only model 80% of your application-handling resources into a standard pricelist, knowing that 20% of your work will be the result of individually negotiated fees ?
Answers below or back in the forum. Note that these two questions are linked.