Alternative processing providers: Update 16 June 2016

Sections 161 to 164 allow the secretary of state to introduce regulations piloting "alternative provision" for processing planning applications. The procedure would give applicants the option to submit applications for processing, but not determination, by a "designated person" other than the local planning authority.

These provisions, added during the Housing and Planning Bill’s parliamentary passage, enable regulations providing for "temporary arrangements in particular areas in England" to test the practicality and desirability of competition in the processing of planning and "connected" applications.

The regulations could be limited to specified descriptions of development and would need to specify a duration of no more than five years, beyond which the provision would be withdrawn. The secretary of state would then be required to review its operation and effectiveness and report back to Parliament.

The act also indicates that the secretary of state may designate a local planning authority as a "designated person", offering councils scope to handle applications in other areas.  The secretary of state is also empowered to require designated persons to provide assistance to the responsible planning authority in connection with appeals or court cases arising from its determination.

The act is clear that regulations cannot allow or require the responsible planning authority’s duty to determine an application to be carried out "to any extent" by a designated person and that nothing said or done by a designated person will be binding on the authority. The regulations would allow councils to recover processing in circumstances to be specified in detailed regulations.

Section 163 allows the secretary of state to make provision for setting fees, offering scope "to prevent the charging of fees that he or she considers excessive". It says the provisions may require a designated person or a responsible planning authority to refund some or all of an applicant’s fee where the person or the authority fails to do a "particular thing within a specified period".

The regulations would cover eligibility to act as a designated person, councils’ capacity to act as designated persons and actions or procedures to be followed – including timescales – by the various parties involved. They would also cover performance standards, investigation of complaints, compensation, indemnity, redress for maladministration and situations where an alternative provider pulls out of processing an application.

A Department for Communities and Local Government technical consultation issued on 18 February said that a competitive market for processing applications would need to allow providers to set their own fees and service standards. It said that such proposals would need to maintain the minimum standards for notification and representations set out in legislation, while offering decisions in less time than the current statutory periods. The government sought views on whether fast-track standards should be set out in regulations, or whether local performance agreements could be used to provide sufficient assurance of an enhanced service.

The consultation sought views on the scope of the competition test, including who would be able to compete and which applications they could compete for. It suggested that the market for application processing might operate best by allowing approved providers and councils in test areas to set their own fee levels, enabling different levels of fee for different levels of service. Alternatively, it said they could be restricted to setting fee levels within a range: "A requirement for providers in test areas to provide a low-cost processing option could also be explored."

Commencement: These sections came into effect on 12 May, but further regulations will be needed to take the regime forward.

Comment: Planning Officers Society junior vice-president Steve Ingram warned that the government had not considered the implications of politically contentious applications being processed by alternative providers. He pointed out that even when applications are processed by council officers, "there can be all sorts of accusations flying around". Former Barton Willmore consultancy senior partner Ian Tant said: "There isn’t a market aversion to this, and particular consultants may suit this way of working. This will likely be high-volume, low-margin work with a lot of repetitive processes."  Stephen Hollowood, senior director at consultancy Bilfinger GVA, said, his firm is "very unlikely" to be interested because of fears over conflicts of interest.

The DCLG technical consultation document is here

More on this topic:

Why outsourcing firms may opt out of competition pilots