My Lords, I thank noble Lords for their thoughtful contributions. If they can bear with me, I have a lot of inserts and Box notes which I have been handed, so this may not sound like a closing speech. I will endeavour to answer the questions rather than to sound too eloquent.
I covered ring-fencing in my opening remarks, but I should be clear on why we are not saying that this additional income generated should be ring-fenced: it is because it is in primary legislation. There is a requirement for planning fees to be used by the local authorities to perform the function of determining planning applications. That is already in primary law so it is does not need to be restated here in a different format. As there is no surplus to planning fee income, logically there is no overspend that could be used to cross-subsidise other services. We therefore do not believe that this has to be ring-fenced.
However, I agree that, having made clear to all local planning authorities that they are expected to retain the income from planning fees for direct investment in their planning services, we should reiterate this expectation after the regulations are made. Indeed, I hope to have reassurance in writing from my department that we will monitor how these fees are generated and used.
I come to the issue of whether performance will be enhanced and how it will be monitored. In return for increasing planning fees, we expect local authorities to invest more in their planning services and deliver better performance. The fee increase provides the opportunity for authorities to consider how they might use that additional income to improve their performance and whether they are resourcing their planning application service adequately. We need to see them assessing this for themselves.
We are also developing a new framework that will measure that performance across a wider set of criteria to ensure that local authorities are delivering on all fronts, for all users of the system. That is really important. I am sure that the department and certainly the noble Baroness, Lady Scott, will welcome the involvement of the noble Lord, Lord Lansley, and his thoughts on how to develop service level agreements further.
A “free go” was mentioned by many noble Lords. We recognise that a free go has a significant resource impact for local planning authorities. Therefore, if applicants still want to arrange an extension, they can, but they cannot have a free go. I hope that has a positive impact on planning departments’ ability to resource planning efficiently.
I know that planning authorities setting their own fees is controversial. There are some who believe that they should be able to set their own fees, at an appropriate level. However, as I mentioned in my opening remarks, there is also a risk that fee variation between areas could dissuade home owners and small developers from undertaking development. It could introduce unpredictability at a time when we need developers to accelerate the number of homes they are building and to support economic growth. I am sure that that objective is supported across the House. A national fee increase ensures that all planning authorities can benefit, so we consider that to be the appropriate measure in the meantime.
Why do fees not cover the full cost of that planning application service to local planning authorities? It is fair to say that we want to proceed in a measured way. It is important that we provide additional resourcing to local authorities without disproportionately impacting businesses and householders. If we were to set full cost
recovery now, we could see a substantial rise in some fees that could adversely impact potential developments. I reassure the noble Baroness, Lady Pinnock, and others who mentioned this that we intend to undertake a wider review of the actual cost of processing different types of applications, as the proposed planning reforms are implemented and the savings, particularly from digitisation, are realised. In future, we might see fees relate more directly to the cost of the service itself.
The noble Baroness, Lady Pinnock, is correct that there is a difference in the numbers that I mentioned in opening. Between the £225 million deficit and the £65 million new funding being raised, there is a difference of £160 million. As was mentioned by the noble Lord, Lord Lansley, there are measures that will make an impact on that, including the free go.
I also draw your Lordships’ attention to the fact that local planning authorities are, we believe, under- resourced, but there are ways in which we are addressing this. Staffing issues and efficiencies were mentioned. We have developed a comprehensive planning, capacity and capability programme, which provides the direct support that is needed now and upskilling opportunities for existing planners, while developing the future pipeline into the profession. As part of this, we have also launched a new £24 million planning skills delivery fund; this will directly support local authorities to help clear the backlogs of planning applications and to address skills gaps. We have also announced an additional £13.5 million to stand up a new super-squad of experts to support local planning authorities to assess specialist resources to accelerate the delivery of homes and development, starting with the activities in Cambridge with which the noble Lord, Lord Lansley, is familiar.