The government moves to cut planning red tape, as councils face 9% spending cuts and a 51% cut to transport project grants.
Councils will face cuts of up to 9%, with a 51% overall cut to grants for new transport projects, but they will be able to dispense with some planning applications to accelerate development projects under new measures announced by the government on Monday.
The cuts are contained in the local government finance settlement, and while local government budgets are being cut, the relaxed planning regime could soften the blow by encouraging local development projects.
Proposals in the Localism Bill include a “neighbourhood planning” measure which will allow developers to gain permission for projects as full plans or outlines, without the need for planning applications.
The aim is to reduce bureaucracy and central government involvement. This will “streamline decision-making and remove barriers to development”, the Department for Communities and Local Government (DCLG) said.
“Decisions on applications for major infrastructure projects should be taken by ministers, who are democratically accountable, rather than by an unelected quango.”
The Planning Inspectorate will also lose its ability to amend local plans, although it will still have final approval. Planning inspectors will continue to assess local plans at a public examination, and local authorities will only be able to adopt plans judged ‘sound’ by the inspector, but inspectors will only be able to suggest changes at the request of the local authority.
The Bill outlined the abolition of the Infrastructure Planning Commission and its replacement with “an efficient and democratically accountable system that provides a fast-track process for major infrastructure projects”. The current system for consenting major infrastructure projects is not accountable enough, it said. “Decisions on applications for major infrastructure projects should be taken by ministers, who are democratically accountable, rather than by an unelected quango.”
The ICE welcomed the focus on accountability, and said it would drive both public acceptance of projects and investor confidence.
“With a looming energy generation shortfall and pressing environmental targets we simply don’t have time to go back to square one.”
Tom Foulkes, ICE
The Bill also said the London Development Agency would be abolished and its duties for regeneration and management of European funding to be transferred to the Greater London Authority “so that the mayor [of London] is directly accountable”.
Under the Bill, the mayor will also be able to create Mayoral Development Corporations to focus regeneration on specific areas, such as east London’s Olympic legacy.
The ICE warned that drastic planning reforms could prove too costly in terms of time spent on restructuring. “With a looming energy generation shortfall and pressing environmental targets we simply don’t have time to go back to square one,” said ICE director general Tom Foulkes.
He also criticised the Bill’s lack of clarity over how “larger than local” projects – those that go beyond neighbourhood planning but are not nationally significant – will be dealt with.
“We could be looking at a radically different planning process, with … the result in some cases being made by referendum.”
Charles Anglin, RenewableUK
But trade association RenewableUK hailed the Bill, calling it “the most radical overhaul of local planning rules in the last 60 years” and saying it would have a “profound impact” on renewable energy projects. It said the Bill’s proposals on local referendums, predetermination, neighbourhood planning, pre application consultations, abolition of regional spatial strategies and the community infrastructure levy were of particular importance.
“We could be looking at a radically different planning process, with councillors allowed or even encouraged to campaign ahead of the decision, and the result in some cases being made by referendum,” said RenewableUK director of communications Charles Anglin. “We will need to consult with communities ahead of logging an application and make sure that the economic and community benefits are clear.”
On the same day, the DCLG published the local government finance settlement to outline how the Comprehensive Spending Review’s cuts would trickle down to local authorities.
37 councils were the hardest hit with an 8.9% cut in spending power – just over the 8% limit demanded by the Local Government Association (LGA) – including Manchester, Liverpool, Middlesbrough and Norwich.
“The level of spending reduction that councils are going to have to make goes way beyond anything that shared services can achieve.”
Baroness Margaret Eaton, LGA
English councils will face an average 4.4% reduction in spending power in 2011-12. The largest spending cut by value was to Birmingham at £105.3M, accounting for 8.32% of the budget. Dorset was the only council to get an increase in funding, at 0.25%.
The impact of the cuts was cushioned by £85M of previously unallocated DCLG distributed to local authorities that are home to large numbers of vulnerable people in the form of “transitional grants”. The largest grant of £15.550M went to Liverpool, saving it from a cut of 11.34%. Manchester had the second largest grant at £13.332M.
Local Government Association (LGA) chairman Baroness Margaret Eaton said the settlement was “the toughest … in living memory”. She said councils face a total funding shortfall of £6.5bn over the next year.
“This level of grant reduction will inevitably lead to cuts in services.”
Baroness Margaret Eaton, LGA
Business lobby group the CBI said councils will have to deal with the cuts by “re-engineering delivery” and sharing some services. It recommended sharing both back office functions such as IT and HR, and front line services including street maintenance and social housing management.
It also said “private and third-sector providers” could help find efficiencies in the delivery of services.
But Eaton said this would not go far enough. “The level of spending reduction that councils are going to have to make goes way beyond anything that conventional efficiency drives, such as shared services, can achieve,” she said. “This level of grant reduction will inevitably lead to cuts in services.” She noted that waste management and flood defence are two areas already under particular cost pressure.
The Comprehensive Spending Review indicated front-loaded cuts to local government of 27% over four years.
The biggest losing councils with 8.9% cuts:
- Blackburn with Darwen
- Great Yarmouth
- Kingston upon Hull
- North East Lincolnshire
- South Tyneside
- St Helens
- Tower Hamlets
- West Somerset
On the same day, the Department for Transport (DfT) published settlements for its capital grants to local authorities in England. While maintenance grants were only slightly decreased, funding for new projects was cut by more than half.
The total Integrated Transport Block funding, for small transport improvement schemes costing under £5M, was slashed from £602M for 2010-11 to just £300M for 2011-12.
The DfT emphasised “the significant scope for efficiencies, for example through combining purchasing power of local authorities to drive down prices”.
Meanwhile the Highways Maintenance grant – covering bridges and tunnels as well as roads – was £806M, slightly down from the previous year’s £808.6M. The South West will receive the largest proportion – £142M – with the South East receiving £140M.
Greater Manchester Integrated Transport Authority had the largest total grant by far at £48.9M.
In the settlement, the DfT emphasised “the significant scope for efficiencies, for example through combining purchasing power of local authorities to drive down prices”. The Association for Consultancy and Engineering (ACE) warned that these efficiencies must be achieved “in a way that is sustainable and meaningful”.
The Department for Education also published its settlement and announced £2.1bn of capital funding for schools in 2011-12. £1.3bn will be allocated for schools’ capital maintenance in the same year. “It is essential that buildings and equipment are properly maintained, to ensure that health and safety standards are met, and to prevent a backlog of decay building up,” said education secretary Michael Gove.
He said the capital settlement was “extremely tight”, with a 60% reduction in 2014-15 compared to the “historic high” of 2010-11. £15.8bn of capital will be invested by the department over the Spending Review period, he said.
This week the Chartered Institute of Public Finance and Accountancy (CIPFA) released a survey of local authorities showing that English councils are considering slashing up to 73,000 jobs, with a fifth of authorities expecting cuts of 50% or more to investment in capital projects.
The Local Government Association’s (LGA) estimate that 140,000 jobs would go was dismissed as unfounded by communities secretary Eric Pickles earlier this month (NCE 2 December).