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Spring Statement 2025: An emerging plan for growth in a changing world?

Spring Statement 2025: An emerging plan for growth in a changing world?

Lucie Bailey & Richard Coburn 27 Mar 2025
Against the backdrop of a challenging economic outlook, declining state of public finances and growing global geopolitical uncertainty, the Chancellor of the Exchequer’s Spring Statement 2025 was an important opportunity for the government to demonstrate a firm handle on the economy and a credible plan for delivering their “number one mission” for growth.
Having previously downgraded it to a ‘spring forecast’, the rapidly changing global context since the Budget was delivered last Autumn meant that Rachel Reeves’ speech in the House of Commons on Wednesday became much more significant.
As widely anticipated, the latest forecasts from the Office for Budget Responsibility (OBR) have downgraded UK economic growth to just 1.0% during 2025, which is half the rate expected back at the time of the Autumn Budget. Growth is then forecast to increase to 1.9% during 2026 and has been upgraded slightly in cumulative terms across the forecast period to Q1 2030.
 
Scarce pickings for public investment
Amidst the various cross-cutting spending cuts confirmed by the Chancellor, there were no ‘new’ announcements or funding commitments specifically in relation to planning and development.
Nevertheless, the Chancellor was keen to emphasise government’s “serious plan for growth”, citing some of the recent announcements already made to boost the economy including support for a third runway at Heathrow airport and £2 billion of grant funding to deliver up to 18,000 new social and affordable homes[1].
This follows the granting of development consent by the Secretary of State on Tuesday for the Lower Thames Crossing, and allocation of £600 million worth of investment to train up to 60,000 more skilled construction workers to help achieve government’s target to build 1.5 million homes in England by the end of this Parliament.
 
Planning reform remains in pole position
Planning reform was reiterated as being key to achieving this plan for growth, with the government’s flagship Planning and Infrastructure Bill having passed its second reading in the House of Commons on Monday.
The Chancellor was delighted to share the OBR’s conclusion that the planning reforms included in the updated (December 2024) National Planning Policy Framework (NPPF) will lead to 170,000 additional homes being built over the forecast period (i.e. to 2029-30), in turn increasing the level of real GDP by 0.2% and adding £6.8 billion to the economy (in today’s prices)[2].
This reflects the biggest positive real GDP effect that the OBR has ever reflected in its forecast for a policy with no fiscal cost. More explicitly, it shows that changes to the planning system have the potential to play a major role in driving economic growth if they can be implemented effectively.
In cumulative terms, the OBR expects net additions to the UK housing stock will amount to 1.3 million from 2025-26 to 2029-30, reaching 305,000 a year by 2029-30 (as shown in Figure 1 below).
 
Figure 1: Net additions and private housing completions

Source: Office for Budget Responsibility, Economic and fiscal outlook (March 2025)

This would see housebuilding reach its highest level in over 40 years and put the government within “touching distance” of achieving its manifesto promise of 1.5 million new homes by the end of this Parliament (albeit the 1.5 million target relates to England only, so in reality the ‘shortfall’ could be more significant).
 
Signs of a broader economic plan?
The Spring Statement was an obvious opportunity to back these planning reforms with specific measures to kick start economic activity and move the focus beyond house building. We are still awaiting the government’s full Industrial Strategy (following publication of the Green Paper ‘Invest 2035’ in October 2024) which will set out a 10-year plan for investing in the high growth sectors that will drive government’s growth mission. This is due to be published in ‘Spring 2025’, alongside Sector Plans for eight growth-driving sectors and aligned with the multi-year Spending Review. 
 
The economic role of defence
In advance of this, the Chancellor set out a series of initiatives and funding commitments to boost Britain’s defence industry as way of achieving economic growth alongside maintaining national security.  In particular, leveraging the additional £2.2 billion defence spending announced in the Spring Statement to invest in defence technology and innovation.
This includes establishing UK Defence Innovation (UKDI) to enable innovative technology to rapidly progress from idea to the front line to secure competitive advantage and wider economic spillovers.
A new Defence Growth Board, co-chaired by the Chancellor and Defence Secretary, aims to put defence ‘at the heart of the UK’s modern Industrial Strategy’, as the country develops its credentials as a “defence industrial superpower” armed with the skills, jobs and economic opportunities to strengthen the UK and drive economic growth.
Specific growth and investment locations were identified in the Spring Statement including the Cumbrian town of Barrow-in-Furness (home to defence giant BAE Systems), alongside a commitment to regenerate and secure the future of Portsmouth Naval Base. Given that defence spending has historically focused on south western and south eastern parts of the country (as shown on the interactive map below), the government will need to carefully consider how this top-down investment into defence priorities can deliver economic growth and opportunity for all parts of the country.
 

 
One down, seven sectors to go
Defence is rightly highlighted in Invest 2035 but represents just one of its eight priority growth sectors[3]. The country’s business communities are eager to learn more about the government’s plans for them all.  Similarly, local authorities including proposed Strategic Authorities are anxious to understand their role and priorities in enabling the sectors to grow. Whilst it is understandable for the Chancellor to emphasise that “the world has changed”, we suspect that the apparent delay to the publication of the final Industrial Strategy and associated Sector Plans relates to the disappearing prospect of sufficient fiscal headroom needed to stimulate investment anytime soon.   
The sector-focused approach is positive, logical and meaningful in economic policy terms.  However, if the government genuinely intends to ‘tackle barriers to growth’ and ‘create the right conditions for increased investment and higher quality jobs’, public sector capital will be required. Taking the creative industries as an example, it would be revealing to see how much investment is required simply to keep existing regionally and nationally important cultural assets operational and economically productive (not unlike the country’s tired and under-invested infrastructure system – from potholes to ubiquitous water leaks). This is before consideration is given to the capital support required, for example, to ensure affordable workspace is available for new creative enterprises throughout our cities, skills programme put in place to deliver the modern workforce needed for growing sectors or targeted funding gaps filled to ensure the next generation of theatres, arts and music venues can be realised.     
 
The role of planning in industrial strategy
Whilst government borrowing may provide an element of the investment required in the short-term, the growth community will need to be patient. In the meantime, the government should continue to make best use of the policy levers it has at its disposal to release latent private sector capital investment. Planning reform coupled with a direct relationship to economic development policy is probably one of the most potent tools available to government in a constrained economy. In anticipation of an industrial strategy with any teeth, the planning reform focus must move well beyond house building and start to address how it can be effective in enabling various forms of commercial, industrial, creative and other types of development which can collectively kick start economic growth. 
 
Lichfields is following the progress of the Planning and Infrastructure Bill and is considering the implications for the development industry including how planning can support priority growth sectors. Please visit our website to find out more, including our assessment of the government’s revisions to national policy and other reforms.

 

Footnotes

[1] The Spring Statetment 2025 notes that this is a bridge to a new programme, and in June the government will follow this with further announcements on wider long term investment into social and affordable housing through the Spending Review.
[2] CP 1289 – Office for Budget Responsibility – Economic and fiscal outlook – March 2025
[3] Invest 2035 identifies eight ‘growth driving sectors’:  Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services.

Image credit: Jacob Diehl via Unsplash

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Local Development Plan Gate Checks in Scotland – what have we learned so far?

Local Development Plan Gate Checks in Scotland – what have we learned so far?

Dan Evans 24 Mar 2025
Following on from our recent blog ‘Celebrating 10 years of Lichfields in Scotland’, which focused on what we’ve learned and what’s next, this blog will discuss what Gate Checks tell us about the new plan-making system in Scotland.
The Planning (Scotland) Act 2019 and associated secondary legislation have brought in a number of new requirements for planning authorities bringing forward ‘new-style’ Local Development Plans (LDPs), most notably the introduction of ‘Evidence Reports’ and their scrutiny at a ‘Gate Check’.
The purpose of the Evidence Report is to set out the planning authority’s interpretation of its baseline evidence base, and the implications for the preparation of its LDP. In turn, the Gate Check, carried out by a Planning and Environmental Appeals Division (DPEA) Reporter, makes an independent judgement of whether the evidence report contains ‘sufficient information’ to inform the preparation of the LDP.
The overall intention of these two new requirements is to reduce the level of debate when the Proposed Plan is examined, and to make for a better, more evidence-led plan. The expectation is that it should not be necessary for the sufficiency of evidence base to be revisited at the examination stage.
At the time of writing, six Gate Checks have concluded, with an additional three ongoing (including Glasgow City Council’s resubmission). Whilst it remains to be seen whether the new process will have the desired effect of streamlined examinations and high quality plans, the decisions taken by Reporters to date are providing a better picture of what is required to prepare an insightful Evidence Report and successfully pass the Gate Check.
So what have we learned so far?
1. Reporters really are scrutinising Evidence Reports
From the Notices of Sufficiency (the document provided by the Reporter where the Evidence Report has been deemed to have been acceptable) published to date, it is clear that Reporters are using the Gate Check to get under the skin of the evidence provided, and are picking up minor gaps, inconsistencies or issues to consider further in a constructive way.
However, planning authorities aren’t expected to have all the answers at this stage. Reporters are using the opportunity to highlight remaining uncertainty or the need for clarification to secure alignment with Scottish Government guidance, often in the form of advisories to be considered in preparing the plan. In many ways, this is to be expected – the rationale for bringing in this stage early in the plan making process was to allow independent scrutiny of the key principles of a draft LDP early enough in the preparation procedure for remedial action to be taken if flaws are uncovered.
For their part, authorities are also being encouraged to identify in their Evidence Reports any potential gaps in the evidence gathered or uncertainty in data, and to highlight areas where stakeholders disagree with the evidence.

 

2. The 'so what' is really important
Whilst the Evidence Report is largely focused on the baseline information available for plan makers to use to inform their plan, it is not enough to simply state what is known – Reporters are looking to understand the planning authority’s interpretation of what the evidence means for the LDP and Delivery Programme. Indeed, one of the reasons for the Reporter’s return of the Evidence Report to Fife Council (therefore not allowing them to go forward in preparing their plan) was that the Report did not establish what the evidence meant for the plan.
The minimum evidential requirements for Evidence Reports have not been defined by the Scottish Government; their guidance provides flexibility for proportionate professional judgment about what type and amount of evidence is sufficient. However, given the experience of the early submitters, Fife Council and Glasgow Council, in failing to progress to plan preparation stage first time (and being criticised for not going far enough on some topics) it would not be surprising if subsequent authorities choose to include more in their Evidence Reports to manage the risk of being found non-sufficient.  

 

3. An ‘ambitious approach’ to setting a housing land requirement is a key test…
The Scottish Government – as further clarified in a Chief Planner letter in June 2024 – expects LDPs to take an ‘ambitious approach’ to local housing land requirements (LHLR), setting figures that exceed the Minimum All-Tenure Housing Land Requirement (MATHLR) provided through NPF4. Gate Checks have become the arena in which this ‘ambitious approach’ is being scrutinised.
Both Fife Council and Glasgow Council were found not to have provided a transparent and understandable explanation of how the indicative LHLR has been arrived at, nor to have fully meet the requirements of national policy and guidance. In both cases, the Reporters set out revisions required to provide a more robust, transparent and easily understood explanation of how and why the evidence set out in the evidence report has been used to set the indicative LHLR.
That being said, what it means to have taken an ‘ambitious approach’ does not appear to have been settled on. Whilst some authorities have set arrived on an LHLR that is materially above MATHLR, Midlothian Council successfully argued for a LHLR only one dwelling above the MATHLR, and its Evidence Report was found to be adequate. West Lothian Council has recently engaged on two options for LHLR: one close to its MATHLR figure; and a higher figure that would address a wider definition of existing need. It will be interesting and informative to see which one the Council chooses to put forward when it submit its Evidence Report to the DPEA.
4. …but sites are not being considered at this early stage
Scottish Government guidance states that the role of the Evidence Report is to establish what to plan for, with specific locations or sites being the focus of the later Proposed Plan stage. In turn, some planning authorities appear to be holding off undertaking call for sites exercises until after their Gate Check. For some of us, this seems like a lost opportunity – understanding potential development sites and their location can be a really important part of forming and testing a spatial vision for a place.
However, whilst sites themselves aren’t being considered as part of Gate Checks, planning authorities are often preparing site appraisal methodologies to submit, setting out how they propose to assess sites to inform plan allocations. It therefore remains important to engage with the Evidence Report to understand and shape these methodologies and to understand what is likely to be required to see sites be allocated.

 

5. Constructive and early engagement is critical
Evidence of stakeholder engagement has been an important factor in the Gate Checks that have taken place to date. For example, the Reporter concluded that they were unable to conclude that Glasgow Council had sought the views of, and had regard to any views expressed by the key agencies, or had demonstrated a fully collaborative approach. They therefore concluded that they could not confirm that the Evidence Report was robust.
One of the intentions of the Gate Check is to streamline examination of plans. Guidance states that it should not be necessary for the Evidence Report or the sufficiency of the evidence base more generally to be revisited at the examination, which should instead focus on unresolved issues arising from the plan. The Gate Check process itself is not an examination – although the Reporter can request further written information or convene hearings if they conclude it is necessary – and so engagement at this stage should not be relied upon in order to shape the plan and its evidence base.
For this reason, it is also critical for those seeking to shape the plan to take the opportunity to engage with local authorities ahead of submission of Evidence Reports to the DPEA. Planning authorities are expected to undertake early and proactive engagement with stakeholders, to ensure collaborative and transparent evidence gathering, and to collate robust evidence. We have found that authorities are choosing to do this in different ways – some by providing a number of topic papers at the same time and asking for comments, and others holding a rolling process of engagement.  
Get in touch if you’d like to find out more about how we can support you in engaging with Evidence Reports and the plan-making process more generally.

Image credit: Artur Kraft via Unsplash

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Spatial Development Strategies – a planning panacea?

Bethan Haynes 20 Mar 2025
Spatial Development Strategies (SDSs) could potentially play a key role in supporting local plan-making and achieving the Government's objective of delivering 1.5m homes across this Parliament. With the principle of strategic planning forming a key part of the Government’s proposed planning reforms, the Planning and Infrastructure Bill represents the next step towards bringing strategic planning – with all its strengths and opportunities - back to the forefront of plan-making. But what are some of the immediate challenges that need to be considered, and what questions remain unanswered?

 

What’s in the Bill?

The Planning and Infrastructure Bill sets out the process by which certain authorities should prepare strategic plans; largely following the processes (including scope for intervention by the Secretary of State [SoS]) already set out for local plan-making – shown in Figure 1. The initial step will involve establishing geographies, which we understand to be subject to a consultation process by Government later this year. Combined, combined county, upper-tier and unitary authorities (not within a combined authority) are ‘principal authorities’ and are strategic planning authorities (SPAs); they can join together to form a Strategic Planning Board (SPB) covering multiple SPAs, if appropriate (and the SoS can also intervene in establishing SPBs, if needed).
The Spatial Development Strategy for London will continue to be produced in accordance with the Greater London Authority Act 1999 (i.e. the London Plan). The provisions therefore do not apply to London.
Once established, much like current local plan-making, the SPA must prepare a timetable to prepare its SDS, prepare and consult on a draft SDS, submit this for examination, undertake any necessary main modifications, send to the SoS and then adopt the SDS. There will be requirement to review it from ‘time to time’, but as yet no indication of what this means. Similarly to current plan-making, there is scope for the SoS to intervene at virtually all stages to direct an authority to prepare an SDS (or indeed, to stop any work on the SDS), make modifications, to adopt the SDS, alter the SDS after adoption and to review the SDS.
The SDS should address matters of ‘strategic importance’, including infrastructure and housing (this may include the type, quantum and/or distribution, including identifying general areas that are suitable for development) but should not make specific allocations. Like local plans, SDSs should have regard to their effects on sustainability, climate change and health.
Figure 1 – Summary of process by which Spatial Development Strategies are prepared (Source: Lichfields, adapted from Planning and Infrastructure Bill)

 

How has joint planning worked up until now?


In some areas, it’s worked….
The introduction of the NPPF in 2012 and revocation of Regional Spatial Strategies (RSSs) saw strategic planning wind down considerably, with this only taking place voluntarily where authorities were aligned with their neighbours in their vision for housing and infrastructure. We’ve seen joint plan-making in areas including in Greater Norwich, Central Lincolnshire, South Worcestershire, Cheltenham/Gloucester/Tewkesbury, North Essex and Plymouth/South West Devon. We’ve also seen a joined-up approach to plan-making (where local plans are produced separately, but with close collaboration and [importantly] agreement on key issues, and in some cases examined together) across areas like Greater Cambridge and – until recently – Oxfordshire. In some cases though, they have taken a really long time to prepare and adopt – nearly 10 years in the case of the Greater Manchester Spatial Framework (and even then, the plan saw Stockport withdraw, leaving the plan ultimately covering only 9 of the 10 Manchester authorities).

 

…in other areas, less so…
However, there have been far more areas where voluntary joint planning has not been taken up where, objectively, it was likely to have been necessary to address cross-boundary issues, including housing. The historic – voluntary - system neither required nor incentivised truly joint working and agreement, with little in the way of consequences for the ‘do nothing’ approach for authorities whether they were ‘exporters’ or ‘importers’ of development needs. This has typically been further complicated by the requirement for ‘unanimous’ support, leading to the unravelling of plans in areas where just one (or two) areas are not aligned with the vision for a wider plan.
The failure of joined-up plan-making has also often taken place in areas where high housing pressures meet significant planning constraints; Greater Brighton and Coastal West Sussex, Urban South Hampshire, Birmingham and the Black Country, South West Hertfordshire and South Essex (and more – with many areas failing to even see a plan get off the starting line). Indeed, we’ve seen some areas make attempts at joint planning only for those efforts to be abandoned where they lack unanimous support; the West of England Joint Spatial Plan (withdrawn in 2019), the Oxfordshire 2050 Plan (abandoned in 2022) and the Black Country Joint Plan (collapsed in 2022) to name just a few. We’ve even seen attempts by Central Government to initiate strategic planning, notably in the proposed OxCam Arc Spatial Framework, although this was significantly watered down and eventually abandoned by the-then Conservative Government in 2022.
If the last decade has taught us anything, it’s that genuinely effective joint working on a voluntary basis is – unfortunately – the exception, not the rule (particularly as this has required unanimous support, which has often been the hurdle in getting joint plans in place). This is a key lesson which we must learn from in order for strategic planning to be fully effective in the future. On the face it, the many and varied powers that the SoS has to force an SDS into existence and variation, including controlling the area to which it relates, suggests that there is perhaps more scope for this iteration to succeed. The shift from ‘unanimous’ to ‘majority’ (as proposed for SDSs) is also an important one.

 

What solution could SDSs offer?

The principle of SDSs – which will address strategic matters, primarily infrastructure and housing, which need to be considered across larger areas - will be one that is welcomed by many. But their effectiveness will be determined by a range of factors, namely whether: 
 
    1. They cover an appropriate geography where such matters can appropriately be assessed and addressed. Too small and they risk not being capable of properly addressing strategic matters, particularly in relation to infrastructure. Too large and there is a real risk of lacking agreement, as areas have different needs and priorities (in turn, creating delay and uncertainty). Of course, the question of geography will also inherently link to local government reorganisation (which we return to later) – albeit we expect the geographies to be established through a consultation process and, if necessary, the SoS will be able ‘patch’ areas together; and
       
    2. They are prepared quickly and with content which is proportionate to their objectives. Historically, strategic planning (whether driven by a top-down or bottom-up approach) has taken far too long and with strategic plans containing far too much material for their purpose. The London Plan provides a valuable lesson in this sense, with the London Plan Review Report of Expert Advisors recently noting the London Plan’s “excessive complexity and policy overload”[1]. SDSs must be kept as brief as possible whilst addressing the key strategic matters for their area, both to allow them to be prepared and adopted quickly and to avoid repetition of any material set out in national policy (including unlawful repetition of future National Development Management Policies) and material that should be within local plans. Indeed, our research insight ‘Spatial Awareness’ published in 2022[2] identified conciseness as being of key importance to the success of SDSs.

 

With history showing the voluntary strategic planning does not work in many parts of the country (albeit this has been in the context of requiring unanimous support, which is set to change), central to the establishment of SDSs will be the extent to which the SoS intervenes in the event that SDSs aren’t progressing in a timely manner or are too detailed.
Although intervention powers for local plans already exist, they were scarcely used by the previous Government, even in areas which chronically and repeatedly failed to take any action to prepare and adopt a plan. As of March 2025, over 100 – a third – of authorities have a plan which is more than 10 years old, of which around half of these have not adopted a plan since the introduction of the NPPF in 2012. Yet, there was only intervention by the previous Government in a handful of areas. A shift in approach to intervention powers from the current Government will be crucial in getting strategic planning up and running.

 

What could it mean for local plan-making in the immediate future?

When thinking about the prospects for local plan-making, we have identified four important considerations:

    1. The prospect of local government reorganisation and the creation of Foundation and Mayoral Strategic Authorities;
    2. The interaction between local plan-making and any future SDS;
    3. Practicalities of producing plans and resourcing; and
    4. Long-term thinking, including the next General Election.
1. Local Government reorganisation
With many parts of the country currently being asked to consider how to reorganise local government, there will remain – at least in the short term – uncertainty in some parts of the country on the area/s (authorities and geographies) which SDSs will apply to. Until such time as any reorganisation is complete, authorities of all types may find themselves unsure whether to progress local plan-making and/or SDSs (as applicable).

 

 2. Local plan-making and SDSs
Government has made it clear that its objective is to “drive local plans to adoption as quickly as possible” and that “authorities without an up-to-date plan should not stop work on a plan”[3]. But historically, we have seen authorities pausing their plan-making process to await the outcomes of proposed planning reform[4], and the proposed introduction of SDSs (separate to the issue of local government reorganisation) could yield similar results. Authorities which think they may be subject to an SDS might pause their local plan-making efforts until that SDS is adopted, to avoid any abortive work on a local plan – albeit it could be possible that the SoS may intervene to require local plan-making to continue, given the clear expectations that have been set out by Government. In the event that plans are paused (particularly where the current plan is out-of-date), this might create a local plan ‘vacuum’, creating uncertainty; in highly constrained areas development is likely to slow significantly, and in less constrained areas this could yield a flurry of speculative non-plan-led development.
On the flip side, we may see authorities continue to progress with their plans, although the interaction between these local plans and any forthcoming SDS is unknown; indeed, it is likely to depend on the format and content of those SDSs. For example, will future SDS be drafted such that their strategic policies account for local plans which might have been recently adopted, thus not rendering those local policies superseded? Or might those SDSs have to set policies contrary to those local plans, rendering parts of them out-of-date?

 

3. Practicalities and resourcing
For principal authorities (like unitary authorities) that already having plan-making functions preparation of an SDS will likely come naturally, but for most principle authorities this type of plan-making will be something new for which the authority won’t have a team of ready-made planners. The lack of planners is nothing new in the industry, so questions remain as to where these staff could come from, particularly given they will be needed relatively quickly. This may see new recruitment into the sector, but may also see planners seconded (from lower-tier, i.e. district councils) in order to support the principle authority preparing the SDS (albeit this may simply create knock-on effects, affecting capacity and plan-making function within those lower-tier areas).

 

4. Longer-term thinking
The time taken to implement wide scale local government and planning reform, not to mention the general local plan-making cycle, is likely to be longer than a parliamentary term, and no doubt some authorities will be considering their future beyond the horizon of the current Government. This has been the case in the past; the concept of Regional Strategies (RSSs) was introduced in 2004 by the-then Labour Government, with some regions adopting a strategy in the following years (coverage was not universal). However, the subsequent election of the Conservative (and LibDem Coalition) Government in 2010 saw RSSs revoked, with a return to locally-led plan-making. Realistically, some authorities will be considering whether the next General Election might yield a new Government with different priorities for planning, and therefore whether to invest their efforts in local and/or strategic planning at this time, though the longevity of any planning reform will of course also depend on how changes are introduced and embedded into the system (with SDSs coming forward in primary legislation, rather than say secondary legislation or guidance).

 

Concluding thoughts

Strategic planning has the potential to overcome some of the significant barriers to development that we have seen over the last decade and to unlock a genuine solution to cross-boundary issues like infrastructure and housing. But in order to be effective, Government must learn the lessons from past efforts in strategic planning, which have typically seen strategic planning take far too long to implement and have (largely) not worked when enacted on a voluntary basis. Things are – at least in the immediate term – made more complicated by the prospects of local government reorganisation, albeit in the long term having larger authorities may be conducive to strategic planning. Provided reorganisation can take place quickly, and that intervention powers related to strategic planning are used appropriately to ensure SDSs are prepared quickly and efficiently (and of course, assuming capacity within the profession to provide the planners needed to implement all of this), they could provide the mechanism for effective strategic planning that has been largely missing over the last 10-15 years.

 

Footnotes

[1] London Plan Review Report of Expert Advisers Commissioned by the Secretary of State for LevellingUp, Housing and Communities 15 January 2024 available here

[2] Spatial Awareness: The role of Spatial Development Strategies, Lichfields May 2022 available here

[3] Proposed reforms to the National Planning Policy Framework and other changes to the planning system, Consultation Outcome February 2025, available here

[4] See Lichfields blogs here and here

 

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Planning Fees – All Power to Local Authorities?

Planning Fees – All Power to Local Authorities?

Seán Farrissey & Harry Payne 18 Mar 2025
The Planning and Infrastructure Bill has been published and it proposes further changes to the planning fee regime. Planning fees have been the subject of a few amendments in recent years as the Government has sought to respond to shortfalls in funding for local planning authorities (LPAs) and improve the performance of the planning service. The most recent changes to fees, including the first year of indexation, come into force on 1 April 2025 and are discussed in further detail here. The provisions in the Bill discussed in this blog will require secondary legislation before they come into force. It is anticipated further details of a local fee setting model and the benchmarking of associated costs will be consulted on in due course.

 

Localisation of Planning Fees
The Planning and Infrastructure Bill proposes amending the Town and Country Planning Act 1990 to give LPAs autonomy to set planning fees themselves to a maximum, but not exceeding cost recovery levels. This provision will apply to all applications where there is currently a planning-related fee payable. This approach follows that was set out in the Government’s proposed reforms to the National Planning Policy Framework and other changes to the planning system, which was published for consultation in July 2024. That consultation included different approaches to localising planning fees, more detail on this can be found here.
It seems clear that the Government has taken the route of full localisation by allowing LPAs to set their fees to a maximum of cost recovery levels. The ‘Factsheet’ published alongside the Bill, sets out the rational for this change:
‘nationally set planning fees do not account for local variations in costs of running development management services across different LPAs in England’.
The Factsheet adds that:
‘allowing LPAs to set their own planning fees is the most effective way to increase resources in a way that responds to the individual circumstances of each LPA’.
A potential concern is that this proposal could reward those LPAs that run their services inefficiently and penalise those that run a lean and efficient service so the former can charge more whilst the latter have to charge less. Developers in particular highlighted their concerns in the consultation on these measures, arguing that widespread variation in fees would make it difficult for them to financially plan and there were worries that LPAs could raise fees significantly. It was also recognised that there will be spatial variability in costs incurred by LPAs at a regional scale - clear parameters will need defining to ensure LPAs within the same geographic region maintain somewhat of a standardised approach for assessing associated costs to reflect combined authority boundaries.
It seems the Government has taken on board some of these concerns in the first reading of the Bill.
To safeguard against exceedance of cost recovery, the Bill affords the Secretary of State powers to intervene and direct LPAs to amend planning fees or charges. Indeed, the Secretary of State may intervene if fees are considered disproportionately too high or too low, or if the requirements for setting or varying fees are not adhered to. It is proposed that this would comprise a two-stage process, with the Secretary of State first directing the relevant charging authority to undertake a review of the level of fee or charge, and provide appropriate evidence for the result of the review. Subsequently, if following review, the fee or charge remains set at a level not considered appropriate by the Secretary of State, an imposed fee or charge can be set directly by the Secretary of State, as considered appropriate.
Interestingly, the Bill also introduces scope for a retrospective refund mechanism, whereby the charging authority would be responsible for reimbursement of applicants where any inappropriate fee or charge is reduced as a result of the Secretary of State intervention.
The Bill outlines that cost recovery will cover the expenses incurred by the LPA carrying out their planning function related to processing and determining of planning applications, including other technical specialists within the LPA that contribute to planning decisions. How ‘cost recovery’ will be quantified, and importantly standardised, between LPAs is not yet established. The Government’s February 2025 response to the 2024 national planning policy consultation said “We will also undertake a benchmarking exercise to establish a robust baseline for full cost recovery of fees and to inform a national default fee. We will consult further on the details of local fee setting model and the benchmarking of costs in due course”. This appears to be specific ringfencing of planning fees in all but name as the Explanatory Memorandum for the Bill is clear the planning fees cannot cover wider planning services such as plan-making or enforcement [1].
This move will no doubt be welcomed by many in the industry who voiced their frustration in relation to the lack of ringfencing for planning fees in the recent amendments to the Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) Regulations. The Government is clear that the localisation of fee setting will provide LPAs with greater flexibility to deliver an effective planning service, in a manner that is clearly justifiable and based on actual costs incurred. This should give many in the development sector confidence that increased planning fees will result in a better planning service rather than fees being lost to other council departments.
The Bill does not refer to the setting of fees for pre-application advice services or Planning Performance Agreement (PPA) services, which are currently localised. Importantly, the intersection between the recovery of application fee costs and additional revenue raised through PPAs will need careful consideration, given that a direct function of PPAs is to safeguard supplementary finances for necessary resourcing on large scale planning applications. PPA services were highlighted in the NPPF consultation response as a service which will help ensure applications can be determined in timely and effective manner. The consultation response also outlined plans to develop secondary legislation to enable cost recovery for relevant services provided by local authorities in relation to applications/proposed applications for development consent under the Planning Act 2008.
Additionally, no commentary is provided on the incorporation of third-party review costs within localised fee setting, required when LPAs do not have in-house resourcing for technical reviews such as viability or daylight/sunlight. However, such reviews are typically borne directly by the applicant in addition to application fees.
Closing Thoughts
The decision by the Government to pursue the localisation of planning fees will undoubtedly divide opinion, as the responses to the July 2024 consultation reflected. Despite the fact that LPAs will only be allowed to charge up to cost recovery levels, developers will be keen to ensure that this translates into a better and more responsive planning service and the first version of the Bill also makes this expectation clear. As outlined above, further detail will need to come forward before LPAs and developers can gain a real sense of how locally set fees will impact the industry. Further detail will be provided in the consultation exercises that will inform secondary legislation. While the intended approach might emerge fairly swiftly, the approaches to benchmarking, including how localisation of fees might be viable; how full cost recovery will be achieved (while recognising current differences in LPA efficiencies); and avoiding competition between LPAs, may well take some time to resolve.

 

Footnote

[1] relevant planning functions are defined in the Act

 

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