Development FinanceNews

Planning fee increase would help improve home building applications

Planning cuts make the government’s housing targets impossible to meet, according to the vast majority of local authorities who also want to see a rise in fees.

Nearly 90% of local authorities believe that a cash injection is needed as their resources are not sufficient to meet the target of a million new homes by 2020, according to new research.

The research from the Federation of Master Builders (FMB) and the Local Government Information Unit (LGiU) is the first of its kind to draw upon the experience of both local authorities and SME house builders from right across the UK.

Overall it found that 64% of builders and 45% of local authorities see lack of planning resources as a barrier to developing more small sites and more than half of councils deliver fewer than 40% of homes on small sites.

Builders and local authorities are calling for councils to be allowed to raise planning application fees to help them deal with the lack of resources.

Brian Berry, chief executive of the FMB, said: “The government aim to build one million new homes by 2020 won’t be realised unless more SME house builders can enter the housing market. That’s why the barriers that SME house builders currently face need to be removed.

“We know that the availability of suitable small sites and the difficulty getting planning permission on them are two of the biggest barriers these firms face. In this research, both local authorities and SME builders identify under resourcing as a key barrier to allocating more small sites and getting planning permissions in place on them.

“Too often small sites are dealt with entirely by inexperienced officers. There simply aren’t enough senior and experienced planners to make the system work effectively. Planning departments need a cash injection and we therefore urge the government to take on board concerns shared by both builders and councils and to allow local authorities the power to increase planning fees.

“Most small local developers are so concerned by the level of service provided by resource-stripped planning departments, they would be happy to foot the bill, provided the raised fees are ring-fenced and result in an improved service. The government deserves some credit for the priority it is now placing on house building, but unless planning departments have enough experienced planners on the ground, our housing targets will be nothing more than aspirational.”

According to Jonathan Carr-West, LGiU chief executive, there is a large untapped potential in small sites, but resource and capacity pressures in planning departments make it difficult to unlock.

“We need new approaches and new partnerships to build the homes we need. By working with a wider range of local builders, councils can stimulate local economic growth, while providing jobs and training for young people in the area,” he said.

“But this is about more than meeting targets. It is about building homes and thriving places for people to live. By working with smaller local builders to unlock these sites, councils could also stimulate local economic growth, while providing jobs and training for young people in the area,” he added.

The report also says that in most areas sites suitable for small builders of less than 30 units make up the minority of housing identified in local plans. SME builders want to see more smaller sites and it adds that councils need to be encouraged to be more proactive in terms of promoting and publicising small site availability.

It also points out that delays in planning are not helped by junior staff being given the job of dealing with small applications and by a lack of expertise in dealing with technical aspects of planning applications.

It concludes that small builders appear to be willing to pay higher planning fees if that would lead to an improved and more consistent service from council planning departments but councils also need to be more flexible and seek to pool resources and minimise uncertainty and complexity in the planning process.

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