Planning system ‘faces crisis without higher fees’

Developers should pay increased fees to ease the “emerging crisis” in council planning departments, a House of Lords committee has said.

The finding comes in a wide-ranging report into meeting housing demand by the cross-party House of Lords built environment committee which highlights barriers to house building and makes policy recommendations across a raft of areas (see box below), including measures to improve the planning system.

The report, which follows a six-month inquiry, said: “There is an evolving crisis. Local planning authorities do not have sufficient financial resources, and in many cases do not have the skilled personnel, to deliver a quality service in a reasonable timeframe.

“The government needs to increase resourcing for local planning authorities consistently and for the long term. Additional resources should be targeted at improving local plan-making and processing planning applications more quickly. This should include increasing planning fees to help cover the costs of the system”.

The report, published today, relied on evidence submitted by key players in the sector including the RIBA.

Its recommendations include raising planning fees and further boosting resources for planning departments, reversing the “collapse” in the SME housebuilder sector, upskilling construction, bringing forward more small sites for development and increasing access to finance.

It also called for the New Homes Ombudsman to have robust and enforceable powers to ensure new homes are built to high standards of quality and design.

The report cited retirement housebuilder McCarthy & Stone which said that local authorities on average now take 46 weeks to determine its applications, despite the official statutory limit being 13 weeks.

Baroness Neville-Rolfe, the chair of the committee, told Building Design’s sister title Housing Today she “completely understands” that housebuilders are already facing extra costs from the impending cladding tax, new regulatory burdens through building safety legislation, inflation and corporation tax increases.

However, she said: “It is not good that things are moving too slowly as a result of resourcing, it is affecting the output of the housebuilding industry, we didn’t think we could recommend more government money, so where do you go?

“You could do it in a shared way so smaller developers don’t have to pay so much.”

Baroness Neville-Rolfe said the committee is not recommending a specific rate of increase but pointed to estimates from the Royal Town Planning Institute that £500m is needed over four years to tackle significant planning delays.

The findings follow official figures issued by the Department for Levelling Up, Housing and Communities in December revealing that the performance of planning authorities, in terms of speed of making decisions, had fallen to the lowest level in five years.

The report said proposed planning reforms and delays have led to a “chilling effect” in planning departments, while the fact that only 40% of local plans are less than five years old is leading to uncertainty for developers.

The committee proposed time-limits on plan-making processes and called for standardised definitions and simplified guidance for councils to aid the local plan making process.

The report also outlines measures to tackle construction skills shortages, including a recommendation that the Construction Industry Training Board (CITB) is replaced with an alternative model if it cannot be improved.

It suggests measures to encourage SME housebuilders, including a fast-track planning process for smaller builders, easier access to finance and a wider rollout of the ‘master developer’ model.

It also said government funding for demand-side home ownership schemes, such as Help to Buy, do “not provide good value for money” and more money should instead be spent on new social housing to ease affordability problems for renters and reduce the housing benefit bill.

The report contains key recommendations on later living development and design and quality.

The government is expected to publish its response to the Lords’ report in March.