My Lords, I remind the House of my relevant interests as a councillor and a vice-president of the Local Government Association. I thank the noble Baroness, Lady Swinburne, for her detailed explanation of the content and purpose of the changes proposed to planning fees. She obviously thought that at least someone in the Chamber today would raise the fundamental concerns about full cost recovery; I will raise that issue because it is vital that it be considered.
There are two big issues of principle to raise, the first of which is why planning fees are set nationally for England. We have spent many months in this Chamber discussing levelling up, and part of that was a discussion about devolution to local areas of England. Surely, if we are serious about devolution, one aspect would be to devolve responsibility to set fees and charges for planning locally, as indeed it is, I think, for nearly every other fee and charge that a local authority can levy. The Government worry that varying fees will lead to inconsistencies across the country, but that is the very essence of devolution: that local fees are set according to the area in which they are made and the area a council represents. I suspect that there must be varying costs to planning applications—for instance, in London boroughs compared to some other parts of the country where costs are not as high.
My second major concern is the failure of these proposals to enable full cost recovery. The Government’s own assessment estimates that, currently, council tax payers are subsidising the planning service to the tune of £225 million a year. For me, it is totally unacceptable that council tax payers, who are often very hard pressed, are funding, for example, major developers who are making vast annual profits. The cost of a planning fee against the total cost of even a so-called minor development is very small as a proportion of the total, so surely full cost recovery must be not only fair but justified in not requiring council tax payers to subsidise developers. These regulations provide the opportunity to remedy that unacceptable situation, so perhaps the noble Baroness can think again about not enabling full cost recovery.
The noble Lord, Lord Lansley, said that he hopes that the increase in fees will not lead to a reduction in local authority subsidy for the planning service. I have to disagree with him, because I think the whole purpose of a rise in fees is to reduce the subsidy paid by council tax payers for the service. Otherwise, we should have
full cost recovery, because many local authorities are on the verge of issuing Section 114 notices, which indicate that they have run out of sufficient money to run services as a whole in their areas.
Only today, I received an email on behalf of London Councils saying that it estimates that its councils will run short by £500 million in order to provide statutory services. Given that that is replicated across the country, it seems totally wrong for councils to take money from their budgets to subsidise planning development when they are making cuts to children’s services and adult social care. I urge the Minister to go back to the department and suggest that full cost recovery would be a better way forward.
On the details of the proposals, of course, given what I have just said, I welcome the increase in fees, which is better than nothing. However, the Government’s own estimate is that the proposal to increase fees by 35% for majors and 25% for all others will transfer £65 million of costs to planning applicants but will still leave a shortfall of £125 million of subsidy for local planning authorities. I could not reconcile the figures in the Explanatory Memorandum for the regulations, so perhaps the Minister can do that for me. There is a current shortfall of £225 million and a fee increase of £65 million, and yet apparently a resulting shortfall of £125 million. Those figures do not add up, so something must not have been provided in the Explanatory Memorandum.