Government mulls ring-fence for planning fee increase funds

The government is looking at a 'mechanism' to ensure that additional money raised from planning fee increases is ring-fenced for planning departments rather than absorbed into overall council spending.

Parliament: Neighbourhood Planning Bill at committee stage
Parliament: Neighbourhood Planning Bill at committee stage

Speaking earlier this week at the first committee session into the Neighbourhood Planning Bill, housing and planning minister Gavin Barwell said that the government would be responding "very shortly" to the results of its consultation into allowing planning fees to rise.

He added that the "realistic likelihood is that the response will come in the [Housing] White Paper", due later this year.

Barwell said the government was thinking about "how to come up with a mechanism to ensure that all the money goes through to extra spending in planning departments".

"For example, there might be a council department where 60 per cent of the budget is funded through fees, and 40 per cent comes through council tax. The council could take the extra fee income and just remove the money that was funded through council tax.

"Not a penny more would be spent on planning, but they would have released some money somewhere else for the local authority. Now, I can well understand their desire to do that but, in my job, I want to ensure that if more money comes in, it leads to more money being spent in total."

A question to the minister from Chris Philp MP asked whether there was anything to learn from business improvement districts in terms of raising funds for planning departments.

Philip said: "Extra money comes in by way of the business rate supplement but the local authority has to agree the existing level of service provision in writing in advance, and it cannot reduce that. The extra bid funding provides for incremental service levels.

"Could a similar approach be adopted in this situation? You would agree with the council, before they levied extra fees, that there are 30 people working in the council’s planning department and that the extra fees must lead to incremental hires on a cost basis".

Barwell replied that "there are a number of mechanisms".

"I do not want to get into too much detail speculating about them now, but that would certainly be a possibility".

Elsewhere, Barwell said that there are "councils that are potentially interested in looking at whether they can take their planning department and offer it as a service that would cover a wider area".

He also said that the government was thinking "about how we could restructure services and about how councils might work together on some of this agenda, which might also lead to some improvement".

The minister also suggested that the Housing White Paper could contain measures to boost the planning "skills agenda".

"We are thinking about an overall strategy for how we get this country building the homes that the Prime Minister wants to see us building, and a key ingredient of that is ensuring we have enough people with the right skills, both within local councils’ planning departments, more generally in the planning world and in the construction industry—making sure that we have got enough people out there to actually build these homes.

"The skills agenda—ensuring we have got the right people in the right places with the right skills—is absolutely a cornerstone of the strategy that we need to build", he said. 

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