Fees rise in pipeline for developers

Commercial property developers can expect an increase in fees. Picture: Phil Wilkinson
Commercial property developers can expect an increase in fees. Picture: Phil Wilkinson
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SCOTLAND’S commercial property developers are bracing themselves for a hike in fees, in exchange for a slicker planning system.

The planning systems north and south of the Border will go head-to-head this week as they introduce reforms designed to attract investment.

Chancellor George Osborne promised in his Budget speech that a new pro-business national planning policy framework for England and Wales, which offers a presumption in favour of consent being granted and a streamlined process, would be published on Tuesday.

Scottish minister for local government and planning Derek Mackay is also expected to make an announcement imminently on changes to fees, but industry insiders think he may go further and use the opportunity to make the system slicker. Mackay has already said he is considering “radical change” that could involve tying planning application fees to performance.

Anthony Aitken, head of UK planning at property firm Colliers International, said a hike in the fees faced by Scottish developers is inevitable given how far they have fallen behind the levels charged by local authorities south of the Border. Fees for large developments can be as much as £250,000 in England, while in Scotland they stand at about £17,000.

But Aitken, who thinks it unlikely that Mackay will bump fees up to English levels at this stage, said developers will be happy to pay a bit more if they got a better system.

“What developers are after is certainty of outcome,” he said. “There is a consensus that they would pay to get a good service, but it’s not yet clear how that’s going to be approached.”

Increased certainty could be achieved by having planning officers work more closely with companies applying for permission, and councils agreeing to process applications within a fixed amount of time. Aitken suggests a six-month limit, as some major developments currently take a year to go through planning, slowing the recovery of the construction sector.

“At this point in time development is exceptionally tough, but there are positive signs,” he said.

The tentative recovery could be given an extra boost if Scotland offers a streamlined planning system, but equally developers with limited funds could favour projects south of the Border if the new framework gives them a better chance of starting work early.

Aitken would ideally like to see timescales agreed on a contractual basis so that if councils do not deliver, they could be forced to give back the fees they charged.

However, he acknowledges the minister is unlikely to go that far, and has already indicated a preference for naming and shaming underperforming planning authorities instead.

Large developers in London have already shown that they are willing to pay a premium for a better planning service. Westminster City Council’s recent offer to enter into a binding timescale for planning applications for an extra fee of £26,000 found a number of takers.

But Neil Collar, head of planning law at legal firm Brodies, said opinion was divided, and some firms will resent higher fees at a time when money is tight.

He noted that some – although not all – Scottish councils have already improved their service significantly, and points out that binding timescales may be difficult to enforce if local authorities argue that poor applications are to blame for delays.