Funding the planning system

The early stages of a project are brilliant. Everyone is still keen, and the team’s natural inclination is to think big, bold, exciting thoughts. We’re doing some work with some forward-thinking councils about how ‘devo’ might work out in practice, and how a deal might be struck between a region and the government – a “something for something” arrangement as they are now described.

What does “fee flexibility” mean ?

February’s big technical consultation document set out some challenges to local government. It made the case that locally set fees doesn’t work in a monopoly situation, but suggested two cases where flexibility might be created:

  • as part of a devo deal – “we are keen to see proposals for ambitions reforms in the way planning services are delivered, and which can enable greater flexibility in the way that fees are set”
  • where there is a competitive market

My own starting point for imagining what this means is to offer up some service improvements in return for closing the gap between existing fees and costs:

cost recovery

This is the “thinking small” version that I think I started with. We could propose some cheap improvements (more consistent pre-application; simpler validation requirements) and get an above-inflation increase in fees.

But then AlicePalace challenged me: where does that get you ? Yes, cash-strapped councils will be glad to be able to use that top-up money for something else. But there is no extra – the sources of the money are different but nothing transformational has happened. If developers are prepared to pay more it is only on the basis that services improve, and this move to cost recovery doesn’t create any more capacity. And it’s capacity, at many places, that is the issue.

Funding the planning system

It is only at the beginning of projects that people have the mental agility and energy to make big leaps and creative connections. We began by proposing something that might allow the planning applications office to cover it’s costs, but left enforcement and policy to fend for themselves. What about a completely different way of framing the problem ? And so, in a windowless office in a very hot council building, we wondered what an easy solution would look like:

norwich proposition

Planning is a process that increases value. Why shouldn’t it collect part of that value on the way ?

And there were further creative hops along the way. Councils might be skint, but they are very big and stable institutions who (by and large) do not need to obsess over cash flow. Why should they charge small builders (or self builders) at the beginning of the process? Why not agree to collect a levy only when the first house is sold ? Planners could have a role like an old-fashioned bank manager – get acquainted with the developer, assess the project and if it is a goer become a partner. Interests can align without predetermination.

Next steps

Of course, I know we’ve just circled back to an idea of linking planning and land values that has cropped up every decade or two since Planning began. Chances are, we’re not going to succeed where so many others have failed. And, no doubt, the other parts of the project will end up becoming a bit of a slog and every ounce of creativity will be squeezed out by templated reports and risk registers. But working with zingy people in creative councils who allow themselves to think big thoughts is a buzz and I’m very grateful and lucky to be a part of it.



One thought on “Funding the planning system

  1. All interesting food for thought, but, er, “Why not agree to collect a levy only when the first house is sold?” rather assumes that planning permission would always be granted and/or that homes would actually be built.

    The real cost to councils is in (a) dealing with speculative planning applications that go against local policies (and are likely to be more expensive to process because they are controversial) and which should be refused anyway under a plan-led system, and/or (b) dealing with applications that the applicant has no actual intention to develop – just wanting to recoup a profit from land trading – or did want to develop, but then circumstances change and the development never happens.

    So, this solution should only apply where the site is allocated for development in the local plan, and the proposal accords with the local plan allocation. In a way, there’s a case for charging reduced fees for such applications, because the proposals are delivering on local aspirations and the community will benefit from New Homes Bonus…

    Conversely, speculative applications should always be subjected to at least a “full recovery” fee, up front, and why not a punitive fee on top of that (unless the council doesn’t have a 5 year land supply)?

    (The above is not necessarily CPRE policy.)

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