Taxpayers forced to subsidise planning application costs by £1 billion over the next five years

Local taxpayers will be forced to spend £1 billion covering the cost of planning applications by 2022, the Local Government Association warns.

Planning fees are set nationally, which means councils are prevented from recovering the full cost of processing the 486,500 planning applications they receive on average each year.

Since 2012 - the last time the national fees were increased - communities have footed the bill for as much as a third of all planning applications. This represents desperately-needed resources being diverted away from other vital local services.

Analysis by the LGA reveals the bill for local taxpayers to cover the cost of planning applications is growing at a rate of around £200 million a year and will reach £1 billion by 2022. 

The LGA is warning this ongoing fees shortfall is hampering planning departments’ ability to stimulate housing growth in communities.

With councils facing an overall £5.8 billion funding gap by 2020, the LGA is calling on government to urgently 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.

Mark Robinson, Assistant Director of Economy at Rochdale Borough Council, said: “Along with the vast majority of councils in England, we have accepted the government’s offer to allow us to increase the fees for processing all types of planning application, with an agreement that the additional income will be reinvested into the planning service. This will enable us to continue to drive growth and economic development across the borough, while also reducing the taxpayer subsidy on planning application costs.”