the blog posts

planning fees: revenue source or deterrent?

Like most agents, I received an email from the Department of Planning advising me of the increase in planning (and building) fees that would commence on 1 April 2012.

Planning was kind enough to draw to our attention the enormous leap in fees for applications seeking retroactive (after work has started) planning permission. One argument has it that such high fees will act as a deterrent for those inclined to behave badly. The opposing argument takes the position that this is nothing more than a revenue grab.

I thought it would be interesting to see what planning fees are charged in the UK. The reason for looking to the UK rather than the US is because our planning system follows the format of the UK system, albeit outdated by comparison.

Both planning systems charge fees on a graduated basis with, in the UK, the sliding scale being based on either the site area, floor area or number of dwelling units. In Bermuda the sliding scale is based on gross floor area.

The highest fee charged in the UK is $405,910 (no, that's not a typo) for operations connected with exploratory drilling for oil or natural gas. The highest fee charged in Bermuda is $25,700 for an application seeking planning permission retroactively where the gross floor area exceeds 1,000 sq.ft. There is no category in the UK for retroactive applications: you are either seeking planning permission or you're not.

Why might that be, you ask? Because addressing the issue of whether work started before planning permission was granted is a matter of enforcement for the local authority to address by way of the courts, if necessary. It is not a matter for the Planning Committee, which deals with applications for planning permission. In Bermuda, the equivalent route for enforcement matters is the Minister. As most know, the Development Applications Board deals with planning applications.

Levying a fee upon application for retroactive permission assumes:

  1. an application will be made in the first place, and,
  2. processing that application takes so much more effort on the part of technical officers that the additional fee is required and can be justified. 

Given that the other fees levied are roughly based on the size of the proposal (bigger = more complex = more time consuming), the fees proposed for retroactive applications stand out as being illogical in this scheme.  

On balance, therefore, I lean towards this being a grab for revenue. Will it succeed? Hmm, that's more difficult to assess. Initial feedback from applicants behaving badly suggests that applications will simply not be submitted. Such inaction on the part of landowners will put the onus where it should be in the first place: Planning's enforcement system.