Motion to Approve
Moved By
That the draft regulations laid before the House on 5 January be approved.
Relevant document: 6th Report from the Joint Committee on Statutory Instruments.
My Lords, the regulations laid before the House on 5 January and approved by the House of Commons on 10 February set out a fee structure for new categories of planning application developed to introduce a greater degree of flexibility into the planning system and assist householders and developers as the country moves towards economic recovery. A new application type gives local authorities the power to extend the life of existing planning permissions that are due to expire for a further limited period without the need for a full, new planning application. In addition, the Government have also introduced a formal system to allow applicants to agree non-material amendments to existing planning permissions with the relevant local planning authority, similarly avoiding the need to submit a full new planning application.
These new legislative provisions were laid before Parliament on 8 September 2009 and came into force on 1 October 2009. If approved by noble Lords today, the associated change to the fee regulations will be brought into effect tomorrow.
The regulations also establish a lower fee cap specifically for planning applications falling within category 9(b) of Part 2 of Schedule 1 of the regulations, reducing the cap from £250,000 to £1,690.
The principle underlying the planning fee regime is that would-be developers, rather than the council tax payer, should meet the bulk of the costs incurred by local planning authorities in considering any application submitted. The Government have worked closely with local authorities, developers and other interested parties in establishing a fee level that reflects this driving principle of cost recovery in the planning fees system.
In the case of an application submitted to extend the life of an existing planning permission, the Government propose that, if the applicant is a householder, the relevant fee will be £50; if the application is for major development, it will be £500; and in any other case, it will be £170. In the case of an application for non-material changes to a planning permission, if the applicant is a householder, the relevant fee will be £25; in any other case, it will be £170.
The fee levels proposed reflect the outcome of the government consultation on this issue undertaken between 18 June and 13 August 2009, where a flat fee of £170 was proposed for extensions to planning permissions and for non-material amendments, with the exception of non-material amendments to householder applications, for which a flat fee of £25 was proposed.
In response to the consultation, a number of local authorities noted concern that the £170 fee for extending planning permissions would not cover the costs of processing larger applications. In response, the Government undertook a further consultation exercise involving earlier consultation respondents and an expert panel on planning fees. They proposed a higher fee of £500 for all major applications, and a lower fee of £50 for a householder application. These fee levels attracted support from a significant majority of respondents and are the levels that we now propose to take forward.
The reason for these applications having a lower fee than would be paid for a new permission is that there is less work for the local planning authority due to the extent to which material considerations have changed the original permission. The fees proposed will enable the local planning authority to undertake the necessary work on a cost-recovery basis.
Finally, the regulations also establish a lower fee cap specifically for planning applications falling within category 9(b) of Part 2 of Schedule 1 of the regulations, reducing the cap, as I said earlier, from £250,000 to £1,690. This cap was raised in error to the £250,000 maximum in the last revision of the regulations in 2008, when it should have been increased in line with the overall fee increase. The lower cap on this category was to ensure that schemes such as habitat creation were not subjected to an unrealistic fee as a result of the area of land that they cover. The amendment reinstates that lower cap and corrects the error made in the 2008 regulations. I commend the regulations to the House. I beg to move.
My Lords, I shall rise briefly on these regulations; I do not think that they are particularly controversial. In fact, many elements of them are welcome. I thank the Minister for the way in which he set out the rationale behind the regulations. It is notable that the Government acknowledge that there was an error in raising the threshold in the first place. It is always encouraging to hear that kind of admission and a desire to correct the error. Also encouraging is the fact that there seemed to be a meaningful consultation exercise. As the Minister said, local planning authorities’ representations were taken into account as a result of that and changes were made to the proposals. The way in which the exercise has been conducted is encouraging also because it is likely to save applicants substantial amounts of money in the planning process. The overall saving is estimated in the impact assessment to be between £4 million and £14 million per annum—although that seems a pretty broad range —with administrative costs for business being reduced by between £5 million and £18 million per annum. Again, one has to applaud all that.
These matters are important because the consultation document shows a worrying trend which I hope the Minister will comment on when he responds—if he can; he is not to worry if it is not possible. The schematic shows that the number of applications which have progressed has declined from a high of 65 per cent in 2003-04 to half that in the third quarter of 2008. We do not have later figures but it would be interesting to see them. In 2007-08, over 1,000 major applications were progressed; that number has fallen to fewer than 200. Those figures reveal the true impact of this. If it is possible for the Minister to update those figures, it would be extremely welcome.
While it is very good news for business that the cost of applications is being reduced, there are fewer applications. The fee income from applications is an important revenue stream for local government. What consideration has been given to the impact of the reduction in fee income on pressures that may occur elsewhere in the budgets of local authorities?
My Lords, the Liberal Democrats welcome flexibility for local authorities given the difficult economic environment and the need to lay the groundwork for future recovery. Flexibility will be needed as the recovery proceeds at different speeds in different areas. A working planning system can aid this.
On the £250,000 maximum limit which the regulations will revise back to £1,690, I understand that this was a mistake made under the 2008 regulations, the intention of which was to increase the cap by 25 per cent. Is it a change in policy or was it indeed a mistake that we now have to rectify? From what the Minister said, we can be clear that it was a mistake.
As the noble Lord speaking for the Official Opposition said, councils have suffered a loss in fee income during the downturn, with fewer applications made. I repeat his question: what measures have the Government taken to help local authorities with this? The concern is that if the fee income falls substantially as a result of any amendments, there might be additional costs for local authorities. Further, what assessment have the Government made of the potential impact of these regulations on the prospects for development sites which are currently empty?
Broadly, though, we are happy and supportive of these regulations.
My Lords, I am grateful to both noble Lords for their support for these regulations. The noble Lord, Lord Bates, said it was good to see the Government put their hand up when an error had been made and to confirm that it was an error. I can confirm also for the noble Lord, Lord Lee, that it is not a change of policy that we are dealing with here. A number of amendments were made to the schedule to increase the cap; this one was included in error. We understand that not too many people have been affected by it in the interim, but obviously now is the first opportunity we have had to correct it and to put matters right.
The noble Lord, Lord Bates, also acknowledged that we had a meaningful consultation and he is right to say that it changed our original proposals on the fee structure. He referred to the fact that this would lead to administrative and cost savings for business.
He also mentioned the number of applications that have been progressed in recent years and asked for an update on that. I may be able to provide him with further information in writing but I understand that major applications are significantly lower and that there has been a 22 per cent fall in major applications in the past year. I think that his point was on applications progressing to action. Of course, a key component of the changes introduced last year, by giving the opportunity of extending planning permissions, is to help those planning applications that have stalled, perhaps because of the economic situation, and to get them back on track as quickly as possible, rather than having to go back to square one with an application process.
Both noble Lords asked about the implication of changes in fee structure for local authorities. The principle is that the fees are pitched on a basis that should enable the local authorities to recover the costs of dealing with this new form of applications. With regard to support for local authorities in general, I point out that for the year that we are just about to enter, 2010-11, there has been a 4 per cent increase in total grant to local authorities, which is now expected to be something like £76.2 billion. Over the first 10 years of this Government, government grants to local authorities increased by something like 39 per cent in real terms. The loss of fee income will be a challenge to local authorities, but the Government have strongly supported local authorities throughout recent times, and particularly in the upcoming year.
I hope that that has dealt with the points raised. I thank noble Lords for their support for these regulations.
Motion agreed.
House adjourned at 5.26 pm.