94FB: Clause 48, page 61, line 3, leave out “or require”
Member’s explanatory statement
This amendment seeks to probe the Government’s intentions in seeking the power to require a local planning authority to set the level of fees for planning decisions.
My Lords, I start by reiterating our view that the Bill does not go far enough. It tweaks processes, roles, fees and training but leaves the fundamental planning framework—the very framework needed to unlock genuine house building—without the proper reform that Ministers promised. We now hear in the media that a second planning Bill is expected. The Government have missed an opportunity with the Bill.
Amendments 94FB and 94FC in my name seek to probe the Government’s intentions behind the powers given in Clause 48 to local planning authorities and the Mayor of London to set specific fee levels for planning applications. Fee setting must strike a careful balance between national consistency and local flexibility. Planning authorities operate in vastly different contexts, from rural districts handling modest, small-scale applications to major cities building highly complex developments. That diversity and its differences must be respected; a one-size-fits-all approach risks overlooking the practical realities faced by local authorities on the ground.
As currently drafted, Clause 48 enables the Secretary of State not just to permit but to require that these bodies set fee levels. While enabling authorities to set fee levels is one thing, which would potentially support greater local flexibility, requiring them to do so raises important questions: first, in what context would the Government require a local authority to set a specific fee?
My Amendment 99ZA is also a probing amendment. In tabling this amendment, we are seeking to understand how subsection (6) will work in practice. Can the Minister please explain the process Ministers intend to use in calculating appropriate surcharges, and how the duty to have regard to relevant costs will work in practice? It will also be helpful to know whether Ministers intend to consult local planning authorities going forward to ensure that the fees imposed do not exceed the relevant costs incurred.
My Lords, I shall speak to my succinct and simple Amendment 94G, and in doing so draw attention to an issue—planning fees—that might seem a bit techy on the surface and perhaps even boring, but in reality strikes at the very heart of fairness, opportunity and the future of our housing market. I recognise and acknowledge that this Government are trying to address the concerns of SME builders in different ways; thus I believe that this amendment is in line with their thinking. It seeks a simple fix to a gross unfairness within the planning fees regime.
The reality is that the way our planning fees are currently structured disproportionately penalises the very people we need most—the small and medium-sized enterprise builders, the SMEs who once formed the backbone of housebuilding in this country. Our high watermark was the 1960s and 1970s, when SMEs delivered almost 50% of our homes. But now, there are just 2,500 SME builders, down from just over 12,000 in the late 1980s.
When the large developers apply for planning permission, they can absorb the cost of these fees—dozens, or even hundreds of units. For them, the fee for a major scheme is just a fraction of their overall margin. It is, if you like, just one more line on a long spreadsheet. But for the SME builder, often working on only one site at a time, sometimes building just a handful of homes, usually locally in the community where they live, the same planning fee represents a very different calculation. Proportionally, it is far higher—sometimes eye-wateringly so—relative to the potential return. For some, it can make the difference between a scheme being viable or never getting off the ground.
Let us not forget that many SME firms operate on tight margins—it is just a fact of the market today—and have limited access to capital. They do not have the balance sheets of the volume builders, nor teams of in-house planners and consultants to smooth the path. They are nimble, creative and often willing to take on small and difficult sites—precisely the kind of brownfield or infill plots that larger developers might overlook. In that sense, they perform a vital public service, delivering homes in places where others cannot or will not. If the Government are serious about reviving the role of SME builders, whose share of new homes has plummeted to barely 10% today, we cannot afford to ignore the structural barriers that hold them back. Planning fees are one such barrier, and it is entirely within our power to address them in this Bill.
My Lords, I am grateful to my noble friend Lady Scott for opening this small group of amendments and for lending her support to my Amendment 95, to which I will briefly speak.
As drafted, the Bill leaves out the question of enforcement measures being recovered from the fee. I put a very simple question to the Minister: was this a wilful omission or was it omitted by default? As my noble friend Lady Scott said, it would be helpful to know why the question of enforcement measures not forming part of the fee that can be recovered has been left out.
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The explanatory statement sets out the reason for this amendment. Clause 48, as currently drafted,
“enables local planning authorities to set their own planning charges at a level up to, but not exceeding, cost recovery for planning applications for which a fee is payable”.
However, the Bill’s Explanatory Notes state that enforcement activity would not be covered.
At the moment I think we still have a hose-pipe ban in Yorkshire, but we could very quickly go to a state of severe flooding. On an ongoing basis, it is incumbent on local authority planners to ensure that prior to a future flood, resilience measures can be put in place when applications are made. Therefore, enforcement of planning approvals is vital to ensure that any specified flood mitigation or resilience measures have been installed adequately. It is therefore essential to ensure safe development, and these measures should be included in the fee. It is important to note that these resilience measures are not always cheap, and we should remove any barrier in their path. So this is not so much a technical amendment as simply a plea to make sure that the fees will cover the enforcement measures to ensure that the resilience measures have been agreed and are fit for purpose.
With those few remarks, I repeat my request to the Minister. Will she see fit to support this modest and humble amendment and insert a very simple measure in the Bill or the implementing regulations that will no doubt follow—it seems to be an omission, more by default than by design—to ensure that these mitigation or resilience measures will be installed adequately and can be included in the fees?
My Lords, it is a pleasure to follow my noble friend Lady McIntosh of Pickering. Her Amendment 95 may be modest but it is very sensible, and I congratulate her on the way she outlined it. I also congratulate the noble Baroness, Lady Thornhill, on the way she outlined her amendment in this group. As well as speeding up the delivery of the provision of more houses, making it easier for small and medium-sized enterprises is a way of making sure we can deliver the sorts of smaller developments that are popular in local areas and that match the local vernacular rather than imposing a sort of identikit, sprawling housing estate on every part of the country with no reference to local design.
I have Amendments 96 and 97 in this group, and I am grateful to my noble friend Lord Harlech and the noble Lord, Lord Inglewood, who signed the second of these, as well as to my noble friend Lady Scott of Bybrook for the support that she outlined and her kind comments in her opening speech. Clause 48 would allow the Secretary of State to subdelegate the power to set fees for planning applications to local planning authorities, allowing them to set their own fees to reflect the actual costs that are incurred in dealing with applications and other relevant planning functions, and with that income ring-fenced so that it could be spent only on those specific functions. In many ways that is a welcome and sensible provision; I can understand why local authorities would welcome it. But for it to be truly welcomed, a great many people would like to see some further details and to hear some reassurance about this proposed change.
As is so often the case with legislation nowadays, those details and that reassurance are not in the Bill but are to follow. The Government have said that they intend to consult on the precise arrangements for localised fee setting later this year, and in Committee in another place the Minister stated that detailed processes would be set out in regulations. But it would be very helpful if the Minister could make clear today that this new provision will not include the potential for local authorities to introduce fees for listed building consent. That reassurance would bring great relief to organisations from across the heritage sector, and indeed to the very many ordinary people who happen to own listed properties and who are worried about the detrimental effect on our shared heritage and the potential financial penalties for the people who are the custodians of it.
My Lords, I will speak to Amendments 98 and 99, tabled in my name, which would enhance the existing statutory power under Section 303ZA of the Town and Country Planning Act 1990 to charge fees for planning appeals to the Planning Inspectorate. That existing statutory power has never been used. There is currently no charge to submit an appeal to the Planning Inspectorate against the refusal or non-determination of a planning application. That contrasts with the position in relation to planning applications, where applicants for major developments pay application fees of tens of thousands of pounds, and sometimes more.
A huge amount has rightly been said in the context of this Bill and planning reform generally about the importance of ensuring local authorities are fully resourced to improve the speed and quality of planning decision-making at local level. That is of course right, but the same applies to the Planning Inspectorate, which performs a critical role in scrutinising local authority decision-making and plan-making. The inspectorate is already overworked and underresourced. This has consequences for its ability to deal as effectively as it would like with its existing case work, and for its ability to attract the widest possible range of candidates to become planning inspectors, including from the private sector. A couple of years ago, many inspectors went on strike due to what they said was unacceptable pay, which in most cases is significantly less than that of a First-tier Tribunal judge, which is, broadly speaking, the equivalent of a planning inspector in other aspects of the justice system.
With the expected uptick in planning appeals and local plan examinations resulting from the new National Planning Policy Framework, as well as the Government’s promised 150 development consent orders and a raft of new spatial development strategies which inspectors will need to examine, the demands on the inspectorate’s resources are bound to increase. Given the constraints on the public purse, an obvious solution is to introduce appeal fees for some or all types of appeal. I have advocated this publicly and privately for a long time—indeed, longer than I have been in this House. I have been reliably told that a key blocker to introducing this has been that, under the existing power to charge fees, any money charged by the inspectorate could not be retained by it but would go to the Treasury.
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I will now briefly set out our view on the other amendments in this group. We agree with the principle behind Amendment 94G from the noble Baroness, Lady Thornhill. Of course, all fees should be proportionate. That said, delivering it through an amendment to the Bill may be more challenging. Therefore, will the Minister please address the principle of proportionality and how the Government intend to ensure that fees are proportional as well as responding to the amendment itself?
I move on to Amendment 95, tabled by my noble friend Lady McIntosh of Pickering. As drafted, Clause 48 explicitly excludes enforcement. She makes a strong case for her amendment, and I hope that the Minister will reply constructively. In particular, we would like greater clarity on the “polluter pays” principle. Will the Minister please explain why enforcement action has been left out of this fee-raising power? Is it because the Government feel that it would be inappropriate for applicants acting within the rules to pay a higher fee to cover the cost of enforcements against bad actors? I hope that the Minster will be able to give an unequivocal answer to that question.
Furthermore, Amendments 96 and 97, tabled by my noble friend Lord Parkinson of Whitley Bay, address two important aspects of the planning system: transparency and heritage protection. Amendment 96 would ensure that guidance to local authorities includes references to archaeological and other services, so that external services are correctly funded. I know that my noble friend has a wealth of experience on heritage issues, and he was a truly excellent Minister for the arts and heritage. We would appreciate a clear assurance from the Minister on this issue.
Amendment 97 would rightly preserve the very long-standing policy of not charging for listed building consent. This is a vital protection for owners, who often invest significant time and resources in maintaining some of England and Wales’s most treasured heritage assets. Although policymakers in the socialist tradition and the owners or prospective owners of heritage properties may not be natural bedfellows, our historic houses have an important role to play in our housing stock.
The UK has the oldest housing stock in Europe; almost four in 10 houses were built before World War II, and two in 10 were built before World War I. Too often, historic houses are left empty to wither and decay because of the costs and complexities of taking them on, yet every historic property that is restored is an empty home returning to use. We must encourage more people to take on the challenge of restoring our heritage properties, both as a practical step in driving down the number of empty houses and as a gift to future generations. Our historic houses are part of our great island story, and my noble friend is right to seek assurance from Ministers that listed building consent will remain free of charge. Can the Minister give him a cast-iron guarantee on this issue?
I turn to Amendments 98 and 99, tabled by my noble friend Lord Banner. These proposals represent sensible and pragmatic reforms to our planning appeals system. We see the merits in the case that he makes for the introduction of differential fee levels based on the type or complexity of an application. His amendments reflect the practical realities of casework and seek to ensure that the system better aligns with the demands placed on it. Likewise, the proposal to allow the planning inspector to charge appeal fees and, importantly, to retain that income, is a constructive measure. It would enhance the inspector’s operational resilience and reduce their reliance on central funding.
Amendment 99 goes further by proposing a fast-track appeal process that is optional, fee-based and designed to deliver quicker decisions where appropriate. This is clearly a constructive proposal that Ministers should take away and consider carefully. I hope the Minister will engage positively with this amendment.
In conclusion, this group of amendments raises essential questions about the funding, fairness and functionality of our planning system. I look forward to the Minister’s response. I beg to move.
My amendment addresses this issue without costing the Treasury a single pound. I am not suggesting that planning departments should be starved of resources—quite the opposite: we all hope that they will be even busier in the future. We all know they need proper funding to recruit and retain skilled staff and to deliver timely decisions, but surely there is a case for a more proportionate, graduated system—one that recognises the scale of development, the number of units and the genuine impact on the planning service. Without such reform, we risk reinforcing the dominance of volume housebuilders, who are of course essential; this is not a downer on them but a recognition of the role that SMEs can play in increasing innovation and diversity. They bring local knowledge and understanding to their role. By ignoring this, we weaken our ability to deliver the variety of homes this country so desperately needs.
The reason for my amendment is that planning costs are probably the most significant disparity, with SMEs facing costs that are over 100% higher than their plc counterparts. In fact, planning fees at the moment are £626 per home for the first 50 units, and only £189 per home thereafter. Therefore, a 50-home scheme pays three times more per unit than a 1,000-home scheme. This is where it creates a real structural disadvantage for SMEs, deterring those much-needed smaller developments and slowing delivery on small and medium sites. Under the Bill, fee-setting powers are being devolved to local authorities and/or mayors, so there is a genuine opportunity to fix the imbalance.
This is not about special pleading; it is about fairness, proportionality and the kind of housing market we want to create. Do we want one dominated by a handful of big players, or one where smaller, local builders have the chance to thrive? I urge the Government to look again at the planning fees regime and at how it might better support our SME builders. Without them, our housing crisis will only deepen. My amendment would help ensure that SMEs are not burdened with excessive costs; and, over time, alongside other government measures, it might reverse their sad decline. I am pleased to note that it also chimes with Amendment 98 in the name of the noble Lord, Lord Banner. I hope the Minister agrees.
Under current legislation, obtaining listed building consent is a cost-free process. Consent is required for works that affect the special architectural or historic interest of a listed building under the Planning (Listed Buildings and Conservation Areas) Act 1990, in addition to any planning permissions that might be required.
Listed status is a badge of honour—a mark of our collective appreciation for buildings of particular significance—but it brings with it burdens in the form of conservation and maintenance that are in the public interest, not just for those of us who are alive today but for future generations too, and owners of listed buildings cannot opt out of these obligations. This issue affects a very large number of home owners, not just the grandest stately homes but ordinary family homes in every part of the country. The UK has the oldest housing stock in Europe, as my noble friend Lady Scott said, with around two-fifths of homes built since the end of the Second World War and one-fifth since the end of the First World War. There are some half a million listed buildings across the United Kingdom, many of them owned by people of modest and increasingly stretched means. Ensuring that this service remains free of charge to the people we ask to look after these historic buildings for posterity is hugely important. I am not the owner of a listed building but should perhaps declare a non-financial interest in that I am a trustee of the Cambridge Union, which has its own grade 2* listed property. This issue affects many charitable and civil society organisations as well.
Adding a fee for listed building consent would strongly discourage desirable work to listed buildings, especially work such as decarbonisation and conservation repair, which are often financially unrewarding to the generations that carry them out. Imposing a new fee would also discourage compliance, increasing the already considerable amount of work that goes ahead without the proper consent, risking harm to our cherished buildings and headaches when they come to be sold.
It is also worth noting that a high proportion of listed building consent applications mirror corresponding full planning applications, which already incur a cost. The introduction of fees for listed building consent would in effect be a duplication of costs for applicants when the applications are handled as a pair by the local planning authority. Even in cases where planning application is not required, having to make an application for listed building consent already carries substantial costs in the forms of obtaining drawings, which would not otherwise have been required, professional fees for analysis of heritage significance and potential impacts, and the cost of often lengthy delays. That is why a huge array of organisations across the heritage sector—the Listed Property Owners’ Club, Historic Houses, the Heritage Alliance, the CLA and the Government’s own statutory advisers, Historic England—have said that the applications for listed building consent should remain free. If the Government agree with them and with all this, and do not want to see local planning authorities introducing new charges for listed building consent, they could put that beyond doubt by adopting my Amendment 97. I hope the Minister will say that they are minded to do so.
Separately, in addition to the above, it is important that the consultation and regulations to follow the Bill recognise that many local planning authorities obtain their archaeological and other heritage advice from another local authority under service level agreements. For instance, county councils often provide such services for the district councils and national parks in, and sometimes even beyond, their own administrative area.
My Amendment 96 would ensure that guidance which goes out to local planning authorities about assessing the correct level of charges includes a reminder or recommendation that inputs from other authorities should be included to ensure that external services are correctly funded in this way. I hope that the Minister will look favourably on this amendment.
Amendment 98 is designed to address this by providing that, if the power to charge appeal fees is implemented in future, the fees received will be ring-fenced for the inspectorate. That mirrors the existing provision in Clause 48 for local authority planning application fees to be ring-fenced for planning. I must stress that this is only an enabling provision. The effect of Amendment 98 would not be to introduce appeal fees; it would simply ensure that, if the existing power to introduce such fees were to be implemented in future, the inspectorate could keep the fees. I find it very hard to see what policy objection there can be to that, particularly given the Bill’s existing provision for fee ring-fencing at local level.
Amendment 99 goes further and would make provision—again, this is only an enabling power—for an optional fee that appellants could pay for a fast-track, bespoke appeal process, a bit like one can pay extra for a fast-track passport or a fast-track visa. Ask any developer or land promoter what their biggest concerns about the planning appeal system are at the moment and they will tell you four things. The first is unpredictable delays in the process, particularly the time taken between when a planning appeal is submitted by the appellant and when the Planning Inspectorate validates it and issues a start letter.
The second is the lack of a right to a public inquiry, where the local authority’s refusal or non-determination of their planning application can be subjected to detailed scrutiny through cross-examination. The appeal statistics persistently show that inquiry appeals have the greatest success rate—they are the form of appeal that delivers more homes and more growth—yet there is no right to the inquiry. The Planning Inspectorate chooses the process and, given the constraints on its resources, there are only so many cases it can allocate to the inquiry procedure. More and more often, I personally have seen cases for substantial schemes involving issues of real complexity being allocated against the appellant’s will to the hearing process, or even written representations, which are much lighter-touch processes and, in my view, in the light of that have a markedly lower success rate.
Thirdly, there is the inability of the inspectorate to recruit from the widest possible range of backgrounds in the planning profession due to the pay constraints. There are, I must stress, many really brilliant planning inspectors, but there could be many more. Fourthly, once a planning appeal is started by the inspectorate, often after weeks of delay since the appeal was submitted by the appellant, inquiry or hearing dates are then imposed on the parties at relatively short notice, which can have the effect of depriving them of expert witnesses or legal representatives who have been on the project for years and are integral to its conception and formulation.