The planning system should be "principally funded" by applicants rather than taxpayers, states the government’s recently-published planning white paper. Currently "the cost of development management activities by local planning authorities is to a large extent covered by planning fees", but local plan preparation and enforcement is "largely funded" out of councils’ own resources, it states. But the paper adds: "Some local planning activities should still be funded through general taxation given the public benefits from good planning."
To an extent, the government’s move reflects the shift in planning authority resourcing over the last decade of public sector cuts. According to a report by the Royal Town Planning Institute (RTPI) last year, application fees bankrolled just over half of the £900 million total per annum expenditure by local authorities on planning services in 2017/18 - a proportion that had almost doubled since 2009/10. These payments by applicants cover about 70 per cent of expenditure on development management activities, according to the RTPI research.
However for some commentators, a push for greater reliance on developer contributions could water down the ethos of public purpose that they believe underpin planning. Tom Kenny, a former Royal Town Planning Institute policy officer, has written in a recent blog that the government’s white paper proposal represents a “privatisation” of the planning process. He told Planning: “Planning is not a way to facilitate housebuilding but a way of balancing competing demands for land and to deliver the public interest.” But the shift signalled in the white paper could “fundamentally change” local planning authorities’ incentives, Kenny said, adding: “If their income is completely dependent on securing development, local authorities become organisations geared up to provide development.”
Finn Williams, chief executive at social enterprise Public Practice, shared these concerns. “There is a simple logic in expecting applicants and not taxpayers to cover the full cost of the planning process but that reveals a very narrow view of what the planning process is for: planning has to be more than just managing housing growth," he said. "If funding is entirely aligned with growth, we lose some of the wider public benefit of planning.” Philip Smith, a board director at consultancy LUC, added that moving to a largely applicant-funded system could "undermine public support for the planning system”.
However, Paul Seddon, management of planning spokesman at local authority body the Planning Officers Society, said it was good news that planning authority resourcing is on the government’s agenda, particularly given continued pressures on "cash-strapped" local government budgets that are expected to intensify as the Covid-19 crisis unwinds. “There is a stated recognition from government that the planning system needs to be properly resourced," he said. “Planning has to be paid for in some way."
Planning barrister Christopher Katkowski QC, one of the government’s white paper advisors, agreed that the document recognises that "something needs to be done" to improve the system's monetary and skills resources. He also rejected the argument that its proposals around resourcing would “compromise or undermine the public duty aspect of local authority planning”. "To the contrary, the redesigned planning system that is envisaged would serve the public interest in a far better way than the current system does and would give far more effective means to local authorities to best serve their communities," he said.
In terms of additional resources, the paper states that a "small proportion of the income" from its proposed new "infrastructure levy" should be "earmarked to local planning authorities to cover their overall planning costs, including the preparation and review of local plans and design codes and enforcement activities". Meanwhile, application fees "should continue to be set on a national basis and cover at least the full cost of processing the application type based on clear national benchmarking". It further promises to "develop a comprehensive resources and skills strategy for the planning sector to support the implementation of our reforms".
But some commentators were sceptical that the new levy would generate much cash for planning services, given the competing demands there will be on this source of funding. And there was widespread agreement that the white paper’s vision of locally-produced design codes is likely to require hefty resources. Williams pointed to the Swedish city of Gothenburg, which is a similar size to Sheffield, where he said around 100 of the local planning authority’s 250 staff are involved in preparing the city’s patchwork of design codes.
Kenny agreed that the new design codes would swallow up an “insane” level of additional resources, adding: “You are talking about a huge amount of time spent by local authorities on policy and there isn’t a plan for how that is going to be funded."
Authorities will also find it challenging to find the urban designers and other professionals who will be needed to deliver the white paper’s vision, some practitioners suggested. Most councils simply lack such skills and capacity, said Seddon. These resourcing issues could be compounded during the paper's envisaged transition period, he suggested, when councils will be expected to prepared to move to the new arrangements, including preparing fresh kinds of local plans and design codes, as well as carry on with processing applications under the existing system. However, the paper states that "time limited funding" will be provided at the next spending review "in line with the new burdens principle" to support authorities to "transition to the new planning system”.
A thornier question for the government’s wider agenda is how greater reliance on applicants’ resources can be squared with its stated mission to ‘level up’ the economic performance of deprived regions. Greater reliance on fee income could lead to very significant regional differences between authorities in prosperous and poorer areas, said Smith: “If you don’t have that many planning applications coming in, you don’t have that much income.”
“It runs completely counter to the government’s agenda on levelling up," Williams added. “Aligning funding with growth will only exacerbate regional and spending inequalities so local authorities that don’t have the major applications with infrastructure levy to cross-subsidise those broader planning activities could face a spiral of under-resourcing.”