Industry gives chancellor’s planning changes cautious welcome

Developers will soon be able to pay for a “premium planning service” with a money-back guarantee, according to measures laid out by the chancellor today. Delivering what he called an “Autumn Statement for growth”, Jeremy Hunt gave a taste of  “110 growth measures” intended to “back business”, with the need to remove planning red tape first on his list. Other measures in the hour-long speech included a clutch of new investment zones, a permanent extension to full expensing, business rates frozen for SMEs, and more government money for housing. The chancellor said: “It takes too long to approve infrastructure projects and business planning applications. Many businesses say they would be willing to pay more if they knew their application would be approved faster. So, from next year, working with the communities secretary, I will reform the system to allow local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines. If they fail, fees will be refunded automatically, with the application being processed free of charge. He called it: “A prompt service or your money back – just as would be the case in the private sector.” The reform will be welcomed by many developers. The detail shows that this will come in two parts, the first to ensure that energy infrastructure takes less time to go through the system, and the second to allow commercial developers to pay for a swifter service. Supporting documents state the “new premium planning services across England” will include “guaranteed accelerated decision dates for major applications and fee refunds wherever these are not met”. These are intended to improve the existing patchwork approach of planning performance agreements. In addition, the government has said it will invest £5m to incentivise greater use of local development orders in England, to end delays for businesses so that key commercial projects secure planning permission faster. All good stuff, said Nicola Gooch, planning partner at Irwin Mitchell. “But this will require yet another amendment to the Fees Order, which is a little surprising given that it is about to be amended, with increased planning fees coming into effect on 6 December 2023.” And there is the possibility of unintended outcomes. “The ‘prompt service or your money back’ guarantee does not appear to relate to residential planning applications,” she noted. “If these changes to planning fees are limited to non-residential applications, it could result in commercial applications being prioritised over housing schemes, where the planning application fee would not be set on a costs recovery basis and the risk of a refund would be lower.” But the real issue cannot be solved by small-scale solutions, however welcome, said BPF chief executive Melanie Leech. “The planning system can only work more effectively, and be held to account for delivering swifter outcomes, if it is resourced properly. The planning system has been under-funded for at least a decade and its expertise in handling major projects hollowed out. We need a long-term planning skills strategy for local authorities to enable them to determine applications more quickly and make increasingly complex decisions that balance sustainability, heritage and local need.” That theme was picked up by Ashurst lawyer Kathryn Hampton: “Whilst the announcement shows that the government is alive to the chronic delay and under-resourcing issues within the planning system, it does not address the capacity constraints within local authorities.” Instead it poses a number of questions, she said. “What is a “major business application”? How will the cost of the application be determined? Will an estimate be given with a final bill at the end? What will the deadlines be? If the fees are refunded how will the LPAs recover their costs? Will we see a load of authorities going bankrupt? Will this just mean that we see more appeals again non-determination?” Stephanie Hall, partner at Davitt Jones Bould, agreed. “The proposals do not address the significant recruitment and retention issues within local authority planning departments, as there appears to be no funding allocated up front to allow planning services to expand in anticipation of the provision of the express service.” Instead, supporting documents show that the total amount of money allocated to support these, and other planning measures, is £32m. Jon Stoddart, CBRE’s head of London and South East planning, said to call this ‘planning reform’ was “slightly overplayed”. “But there are some encouraging amendments”. Other planning measures include a consultation on a new permitted development right, this time to allow the conversion of a house into two flats, as long as there are no changes to exterior of the building. There have now been 11 planning-related consultations issued by ministers in the past 12 months, Gooch pointed out, “most of which are still awaiting a response”. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo by George Cracknell Wright/LNP/Shutterstock