Housing and Planning Bill — House of Lords, 2016-04-20
Topic: Housing
Susan Williams (Conservative, Centre-right): My Lords, I thank the noble Lords and my noble friend Lady Gardner of Parkes for speaking to this amendment, which would allow local authorities to go beyond cost recovery. We currently work with the Town and Country Planning Act and the Local Government Act 2003, which places a duty on authorities, requiring them to ensure that, taking one year with another, any income derived from planning fees or fees from discretionary services does not exceed the cost of providing the service. However, what cost recovery means in practice in terms of fee levels and increases could vary widely. I am deeply concerned that this amendment, and another we will debate later, have no protections or safeguards to prevent local authorities setting excessive and unreasonable fees, leaving the potential for substantial increases in fees for applicants. My noble friend Lord Porter outlined some of the snags in this approach. Although noble Lords might argue about recovering costs, where is the protection for applicants so that they are not simply funding a highly inefficient service, as he said? Without safeguards for applicants, this amendment, and the one we will debate later, are flawed. There are real technical challenges with the amendments we are debating. That said, it has been interesting to hear noble Lords’ comments, so I shall go into further detail about some of the issues raised I appreciate the strength of feeling on this issue, particularly from my noble friend Lady Gardner. It is easy to be seduced into thinking that resource and performance challenges in planning departments can be resolved by localising fee setting. The arguments for and against local fee setting are more complex and nuanced than has been suggested. However, to give carte blanche to local authorities to recoup whatever their costs, whether or not they are efficient, cannot be right. This is why we want to test and learn from different approaches to fee setting to better understand how we can secure well-resourced and top-performing planning departments I shall set out why I am not convinced that allowing local planning authorities to set their own planning fee levels at this time is the answer to resourcing challenges. Local authorities have told us, supported by some evidence from the NAO, that there have been disproportionate cuts to planning services since 2010. Such local decisions suggest that additional income from local fee setting may not necessarily make its way into planning services, particularly against the backdrop of local government arguing for, and gaining, reductions in ring-fenced budgets and income. Local planning authorities are monopoly providers of planning services in their area, which does not provide much incentive to innovate, reduce costs and provide the most efficient and effective service. Local fee setting could compound this because it enables planning authorities to pass on their costs to applicants, despite any inefficiencies in their planning service. Fees could rise in a way that dissuades small or medium-sized developers from undertaking developments. Local authorities tell us that resource pressures are most acute in small development schemes, and fees for this type of development could rise proportionately the most significantly. While local authorities have transformed many of their services, they have been slower to transform their planning services. Those that have introduced new ways of delivering planning services have shown that performance can be improved and costs reduced We have set out three proposals for tackling resource pressures in planning departments. First, we have consulted on increasing national fees in line with inflation since the last fee increase in 2012 for those authorities that are performing well, with annual increases thereafter also linked to inflation and performance. We have also proposed testing the provision of greater flexibility in fee setting, on top of our proposals for national increases in fees linked to inflation, where local areas come forward with ambitious plans for reforms and improved performance. This could mean some limited, localised fee setting in a few areas or small additional increases in fees above inflation. This approach will allow us to test and better understand whether fee flexibility directly linked to service reform and performance can secure better planning services for communities and developers alike. We want to introduce pilots to test competition in the processing of planning applications. We think that the market might work best where service providers are free to set their own fees so we are minded, subject to consultation, to enable authorities in pilot areas to set their own fee levels Section 303 of the Town and Country Planning Act 1990 allows the Secretary of State to provide, in regulations, that local planning authorities can set their own level of fees up to cost recovery. We already have the powers to enable local fee setting, but handing local planning authorities a blank cheque in this way does not guarantee a better-resourced planning department or incentivise authorities to drive down their costs. This is why we want to test the approaches that we are developing to tackle resourcing pressures in local planning authorities I have already set out that there are legislative provisions that prevent authorities from going beyond cost recovery. Additionally, the Government’s guidance on handling public funds, entitled Managing Public Money, states that charges and fees, such as those for planning applications, should be set at cost recovery so that the Government do not profit at the expense of applicants. The proposed amendment also does not have any safeguards—for example, to prevent local planning authorities from profiting from fees set at excessive levels that could dissuade applicants, particularly smaller ones, from bringing forward development—or any requirement on authorities to consult on fee proposals. I feel very strongly that it is up to local authorities to determine how fees are used and that the income generated from planning fees remains with the council.