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House builders fear 'perverse incentive' in productivity plan

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Government proposals to speed up the local authority planning system contain a perverse incentive that could instead slow it down, the house building industry has warned.

Last week’s ‘productivity plan’ contained a measure to strip councils of development control powers if they failed to decide at least half of planning applications within prescribed time limits of 13 weeks for major applications and eight weeks for minor ones. The previous target was 40% for major applications only.

An LGC analysis found 40 councils were at risk of losing planning powers to government planning inspectors under the proposals.

The productivity plan noted: “Evidence suggests that delays in processing planning applications may be a significant factor preventing housing supply from responding to upturns in the market.”

But the Home Builders Federation told LGC members were alarmed by the change; fearing councils would reject applications at 13 weeks even where a short further period of negotiation would lead to agreement.

This is because a council that rejected an application would have ‘decided’ it and so it would prevent the council from reaching the threshold for government intervention. Meanwhile, if a council regularly exceeded the threshold it could lose its planning powers even if these delays helped to progress a project.

An HBF spokesman said: “We’re in favour of things that would speed up the whole end-to-end process but there could be a perverse incentive here to reject applications. There is though very little detail.

“One of the first things that struck us [about the productivity plan] was that the 13 weeks rule could be a problem. It was not the result of our lobbying and not something we pressed for.”

The HBF has long been concerned that a combination of financial pressures and skills shortages has left councils unable to adequately staff planning departments to deal with an economic upturn.

Royal Town Planning Institute head of policy and research Richard Blyth said: “Speed is important, but so is the quality of decisions. This poses the very important issue of capacity and skills in the planning profession.

“How authorities respond to the tightening of performance measures may vary, but most will take a sensible approach to balancing the need to make good quality decisions with the need to ensure timely delivery.”

Under the old system, Halton and Worthing BCs and Blaby DC were threated in late 2013 with the removal of planning powers, though this was ultimately imposed only on the latter.

Blaby’s then leader Ernie White (Con) said he had been “naïve to believe” that the Tories were committed to localism.

A DCLG spokesman said: “Nationally 75% of decisions on major applications are made on time but where authorities consistently make fewer than 50% of [these] decisions on time it can delay the delivery of much-needed homes and space for businesses to grow.

“Authorities and applicants can agree more time where it is needed to deal with particularly complex schemes, and this is taken into account in the statistics on performance.”



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