Planning fees should rise by up to 40%, says ODPM report

Registered social landlords and developers may have to pay up to 40% more in planning application fees if a proposal in an ODPM-commissioned report is accepted.

The report, published on Tuesday, found that planning fees may have to increase by 15-39% in order to fill the gap between councils' planning costs and the amount of funding they receive from central government.

The Planning Service: Costs and Fees, written by consultant Arup Economics and Planning, found council planning authorities in England spent as much as £940m every year dealing with planning applications – a figure 5% larger than previously estimated.

Unlike earlier research, the investigation considered additional overheads, such as pre-application discussions, as an element of the system's overall cost. Councils' income from government grants, which total £700m, and planning fees, which brought in £174m in 2002/3, leaves them £60m or more short of the report's estimate of their costs.

The report proposed a number of ways in which extra funds could be generated. These include a blanket increase in all planning fees, an increase of the maximum fee charge, or an introduction of fees for services that have until now been free.

Lee Searles, the Local Government Association's programme manager for planning and transport, said the LGA would support fee rises. He said the report "justified a need for an increase by demonstrating the extra money councils have to devote to planning".

Some areas should remain free, but if you can’t charge, how will you fund services?

Lee Searles, LGA

On the question of introducing fees for currently free services, Searles said: "There are some areas that should remain free of charge, such as enforcement, but more generally if you can't charge, how will you to fund services?"

Robin Tetlow, managing director of consultancy Tetlow King Planning, said housing associations would be willing to pay a extra for planning "so long as they could see an improvement in the quality of service".

The report is the latest in a series of papers investigating the performance of the planning system, seen by the government as being crucial to the delivery of its plans to increase housebuilding levels. In the Communities Plan, it promised to invest £350m in the planning service over three years.

The House of Lords has put itself on a collision course with the government by voting 158 to 137 in favour of a Liberal Democrat amendment to stop the government from putting control of regional planning policy in the hands of un-elected bodies.