£1 billion of taxpayers’ money subsidising planning applications, LGA claims

Local taxpayers will be forced to spend £1 billion covering the cost of planning applications by 2022, the Local Government Association (LGA) has warned.

The LGA, which represents over 400 local authorities in England and Wales, said councils are currently having to allocate £200 million yearly to process applications - totalling £1 billion over the next five years.

Since planning fees are set nationally, many councils are unable to charge enough to cover the cost of processing the 486,000 applications that the average authority receives annually.

The difference must then be covered through council tax, meaning that in some cases local people subsidise applications for luxury developments.

The LGA says the cost of up to a third of all planning applications since 2012 has been paid by councils diverting ‘desperately-needed resources’ from vital local services.

The government has already promised to give councils the ability to increase planning fees, but changes are not expected to come into force until later this year.

With councils facing an overall £5.8 billion funding gap by 2020, the LGA is calling on the government to bring forward its Housing White Paper commitment, to allow councils to increase planning fees, and also commit to testing a fair and transparent scheme of local fee setting, to allow councils to recover actual costs.

Martin Tett, LGA Housing spokesman, said: “It is wrong for communities to keep being forced to spend hundreds of millions each year to cover the cost of all planning applications.

“Councils are working flat-out to approve almost nine in ten planning applications, with the majority processed quickly.

“But the shortfall in the amount of fees councils can charge and the cost of processing applications is heaping further pressure on the stretched planning departments which are so crucial to building the homes and roads that local communities need.

“Councils need to be able to recover the actual cost of applications and end such a needless waste of taxpayers' money.

“Locally-set fees would also allow councils to prevent increased costs being passed on to residents, while developers could contribute more to maintain high-quality planning decisions, and improve the ability of councils to speed up the planning process.”

A Department for Communities and Local Government spokesperson said: “This government is committed to giving local authorities the tools they need to drive new housing and build the right homes in the right places.

“All councils have now accepted the 20 per cent planning fee increase announced in the Housing White Paper, and we are introducing regulations this autumn.”