Guidance

Factsheet: Local fee setting

Published 11 March 2025

The government is committed to sustained economic growth and getting Britain building again. The Planning and Infrastructure Bill is another major milestone in our reform programme.

The Bill will speed up and streamline the delivery of new homes and critical infrastructure, supporting delivery of the government’s Plan for Change milestones of building 1.5 million safe and decent homes in England and fast-tracking 150 planning decisions on major economic infrastructure projects by the end of this Parliament.

It will also support delivery of the government’s Clean Power 2030 target by ensuring that key clean energy projects are built as quickly as possible.

These fact sheets are designed to inform readers on:

a) the issue specific measures are solving
b) what the Bill will do
c) what this means in practice

What is the issue?

Planning application fees are currently set nationally and are intended to cover the cost to a Local Planning Authority (LPA) of processing and determining a planning application (their ‘development management service’). However, planning fees do not fully cover the costs of running the development management service. There is an estimated annual funding shortfall for LPA development management services of £362 million, based on most recent local government spending data for 2023-24. Additionally, nationally set planning fees do not account for local variations in costs of running development management services across different LPAs in England.

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. Without this flexibility, LPAs will continue to experience funding shortfalls amid ongoing local government funding pressures, and capacity issues in the planning system would not be addressed. This lack of capacity and resources in LPAs delays decision-making and as a result the delivery of housing and economic growth.

What will the Planning and Infrastructure Bill do?

This measure would establish a new power for the Secretary of State to sub-delegate the setting of planning fees to LPAs. It also requires the planning fees must not exceed the cost to LPAs to determine that planning application and that the fee income must be retained for spending on an LPA’s relevant planning function. Our changes to planning fees will ensure that LPAs have the resources they need and that they are directly invested in deliver an efficient planning service.  

The measures taken forward on planning fees include safeguards to prevent against excessive or unjustified fee increases, by providing the Secretary of State with the power to intervene and direct an LPA to amend their fees or charges when it is considered appropriate to do so. This will prevent LPAs setting fee levels above cost-recovery and do not become a barrier to kickstarting development.

What will this mean in practice?

The government has confirmed that it intends to pursue a fees model that allows for local variation from a national default fee. This would enable LPAs to vary from the national planning fee and set their own planning fee where that is considered necessary to fully recover (but not exceed) the costs incurred in determining planning applications. This approach provides LPAs with greater flexibility to fund the resources needed to deliver an effective planning service. It also introduces greater accountability and transparency into the planning fees system as LPAs would need to be able to demonstrate that their charges are justifiable and based on actual costs.