Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
"The measures introduced by the Department for Communities and Local Government to speed up the handling by local authorities of planning applications for major housing developments are having unintended effects. Yes, the authorities have now focused their efforts on increasing the number of decisions taken within the 13 week target period. But the target has created perverse incentives: authorities can lose interest in applications once the target has been missed; and, of the decisions taken within the 13 weeks, a much greater proportion are rejections than acceptances.
"The Department simply does not know how long it takes on average from the initial, pre-application stage to the start of construction. NAO work suggests that the whole process takes on average almost two years. It will have to be speeded up if the rate of delivery of new homes is to meet underlying housing need, estimated at nearly a quarter of a million new households a year.
"The improvements needed to the development management process include more effective discussions between the authorities and developers in the pre-application stage. At present, there is a lack of clarity about the purpose of these early discussions and a lack of consistency in how authorities approach them."
Mr Leigh was speaking as the Committee published its 33rd report of this Session which, on the basis of evidence from the Department for Communities and Local Government (the Department), examined the incentives to encourage Authorities to perform well, the changes made to the development management process and the Department’s efforts to increase planning capacity.
Housing developments require the approval of planning applications by local planning authorities (Authorities) before they can proceed. The Department has implemented a number of measures in recent years to improve the performance of the development management stage of the planning process, in which applications are considered by Authorities, and to boost planning capacity. The measures include the setting of national targets for the speed of Authority decision-making, and the allocation of £68 million a year in Planning Delivery Grant (the Grant) to Authorities as a reward for meeting targets.
The Grant, together with the setting of a 13 week target for decisions, has provided Authorities with an incentive to determine applications more quickly. Between 2002–03 and 2007–08, the percentage of major residential planning applications decided within 13 weeks almost doubled to 67 per cent.
The Department does not know, however, how long it takes on average for applications to be determined, whether the time taken has fallen over time, and whether there has been an improvement in the total time taken for schemes to progress from pre-application to the start of construction. The target regime has resulted in some perverse consequences. For example, as Authorities prioritised their efforts on taking decisions within the 13 week target period, there has been less focus on applications that have missed the target.
The Department’s measures to improve the application process have met with mixed success. The Department has encouraged Authorities to hold pre-application discussions with developers, but there is a lack of clarity across Authorities about the purpose of these discussions. Some Authorities have not deployed sufficiently senior and experienced staff in the discussions, and Authorities have also taken different approaches to charging. Some Authorities have not charged fees in order to encourage discussions, whereas others have used a fee regime to assist the resourcing of such discussions. Authorities’ monitoring of developers’ discharge of the conditions attached to planning permissions has been given a low priority, partly because of the focus on meeting the 13 week decision target.
Some developers and Authorities have expressed concerns about the time taken by statutory consultees such as the Highways Agency, Natural England, Environment Agency and English Heritage to provide comments on applications, thus delaying decisions.
The Department’s measures to build public sector planning capacity have also had mixed success. Authorities have spent about 95 per cent of Planning Delivery Grant on their planning functions, although the extent to which it has resulted in extra expenditure on planning is unclear. The Department’s bursary scheme for increasing the number of planners has helped to double the number of students taking post-graduate planning courses, but the numbers involved remain small. Expansion of the skills base may also be constrained by the economic recession as Authorities’ income from planning fees falls due to fewer applications.