stephen clarke, lga - local government finance and the planning service

Planning Advisory Service Peer Day

Local Government Finance and the Planning service

Stephen Clarke

Adviser, Local Government Finance

Local Government Association

Stephen.clarke@local.gov.uk10 February 2015 www.local.gov.uk

Outline

• Setting the scene• LGA outlook• Planning in context• Tough Times so far for

the planning service?• Future trends• Assumptions

• What if…• Planning outlook• The local picture• Planning, Spending,

Funding• LGA asks• What’s next?

www.local.gov.uk

Context: OBR forecast for Local Authority spending

The LGA’s outlook

www.local.gov.uk

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/200

10

20

30

40

50

60

How service expenditure might be squeezed

Capital Financing and other

Central Services

Planning and Development

Highways, Roads and Transport

Culture, Recreation and Sport

Housing

Education

Waste Management

Adult Social Care

Children's Social Care

£ (b

illi

on

)

Planning = 3% of 2014/15 expenditure

2%

Adult Social CareChildren's Social CareAll other services, capital financing and other costsEducationWaste ManagementCentral servicesCultural ServicesHousingPublic TransportHighwaysPlanning and DevelopmentRegulatory ServicesOther Environmental Services

What has happened in the last few years?• Councils made a larger reduction in spending

on planning and development services (11.5 per cent, on average) in 2012/13 than they had budgeted for

• Planning and development saw the largest average reductions in spending from 2010/11 to 2013/14: 37.6 per cent in real terms

(Audit Commission, Tough Times 2013)

What might happen in next few years?

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/2075%

80%

85%

90%

95%

100%

105%

110%

115%

120%

125%

Projected expenditure (2013/14 = 100%)

Children's Social CareAdult Social CareHousingWaste ManagementPlanning and DevelopmentCentral servicesTotal net expenditure

Assumptions about planning expenditure• CPI inflation on supplies and services• Pay drift on salaries• Projected change in population• income from charges increases by CPI (in long term)• “efficiencies” on gross cost of 1% per annum• What do you think?

What if…

• What if fees continue to be constrained?• What if demand increased?

The planning outlook

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 -

0.5

1.0

1.5

2.0

2.5

Projected planning and development spend £bnSqueezed expenditure £bn

Local variation

• That’s the picture nationally• The gap is largely created by social care

swallowing more and more budget• About half of all Shire Districts have no

funding gap (according to the model)

Spending and funding

• Planning is one service where expenditure has (fairly direct) influence on funding

• Council Tax base• Business Rates retention• New Homes Bonus• Cuts to planning expenditure in year 1 might

reduce funding in year 2/3/4… a vicious circle?

LGA asks

• 100 Days “big finance asks”• Fiscal Devolution Bill• Locally set planning fees• To cover costs of processing applications• Ideally the net cost of that part of the service is

zero, not subsidised by taxpayer at all

Next steps

• March: Budget 2015• May: next government – future of NHB• (Autumn?) Spending Review 2015• (December?) 2016/17 local government

finance settlement

Questions

?

?