BOROUGH OF POOLE
REPORT TO CABINET
2nd November 2010
REPORT OF HEAD OF PLANNING & REGENERATION
SHORTFALL IN PLANNING FEE INCOME, LOSS OF HOUSING PLANNING DELIVERY GRANT & MITIGATING ACTIONS
1.Purpose & Policy Context of Report
To advise Cabinet that there is likely to be a significant shortfall in the planning application fee income for 2010/11, and to set out the steps taken to mitigate the risk to the Council’s budget.
2.Recommendations
Cabinet is asked to:
2.1Note the contents of the report and the actions taken and proposed.
3. Background
3.1The August Council Budget Monitoring report identified a forecast year end net pressure (after contributions from the LDF reserves) on Planning & Regeneration’s 2010/11 budget of £231,000. The August variance included a forecast shortfall on Planning Fee income of £135,000 and a further £34,000 shortfall on the Pre-Application Advice income budget head.
3.2Planning fee income has always been susceptible to the national economic situation, influenced by macroeconomic policies and interest rates.
3.3Estimates of fee income have always been made at budget formulation stage bearing in mind the previous year’s economic activity and the likelihood of that continuing through the next financial cycle. The 2010/11 budgeted figure was put together in December 2009and based on the following assumptions:-
£1,201,000 2008/09 Budget Planning Fee Income
(£ 450,000)Impact of the economic downturn on 2008/09 activity
(£ 30,000)Impact of changes to Permitted Development Regulations from
October 2008
______
£ 721,000
For the 2010/11 budget an assumption was made that general economic conditions could improve sufficiently to consider retaining the Planning Fee Income budget levels set during the build up of the 2009/10 budget.
3.4Planning Fee income received in the first half of the financial year is currently £22,812 below target. However, two very large applications have contributed nearly 1/3 of the total received and in forecasting for the remainder of the year, a more prudent figure of £42,000 per month has been used to calculate the forecast outturn of £600,000 resulting in a shortfall of £120,000 Additionally, shortfalls are forecast of £34,000for Pre Application Advice income, against a budget of £95,000, due in the main to amendments to the pre-application advice scheme to include the offer of a free concept meeting for Agents/Applicants. This change was made as a result of consultation and feedback from service users and in an effort to encourage development and increase confidence. A shortfall of £5,000 is also forecast for S106 Administration Feeincome.
3.5The budget for the Service Unit had been supported by £100,000 from the Planning Housing Delivery Grant that has been discontinued in the 2010/11 financial year as part of Central Government cutbacks. A further £100,000 of Housing Planning Delivery Grant was used to support the work of the Planning Policy Implementation Team. The loss of this grant has therefore created an immediate £200,000 pressure on the Unit’s 2010/11 budget.
3.6In September’s Council Budget Monitoring report the amount of the projected overspend for Planning & Regeneration Services in 2010/11 caused by just the forecast shortfall in Planning Fee and Pre-Application Advice Income and the loss of Housing & Planning Delivery Grant is £159,000 and £200,000 respectively – i.e., £359,000 in total. (The equivalent figure in August was higher – i.e. £378,000).
3.7The economic downturn that affected the development industry during 2008/2009 has been slow to recover and the numbers of larger schemes received has slowed dramatically having a disproportionate effect on fee income.
3.8In previous years around 40 – 50% of total fee income has been generated from applications in the Major category (schemes with 10 or more properties or over 1000 sq. meters) although the actual application numbers represent around 5% of total applications received.
3.9This year to-date we have seen the number of Major applications reduce to around 1.5% of total applications submitted but contributing around 44% of
total fee income received.
3.10The total number of Planning Applications received during 2009/10 was 1554 and the forecast outturn for 2010/11 is around 1500 so it appears that application numbers are now stabilizing. The average caseload per Planning Officer is between 148 – 150 cases which is in line with the recommended maximum caseload (Planning Officers Society 2007).
3.11 The Unit has already given up £85,000 of savings identified earlier in the financial year as part of the MTFP savings. These savings were found by freezing vacant posts, covering other vacancies by internal secondment andprudent cost centre management.
4Management of 2010/11 Budget Pressure
4.1 In addition to the savings noted above at 3.11, subsequent mitigation measures have realised the following savings:
- Saving of £14,000Secretariat cost for Multi Area Agreement (MAA). £25,000 in budget but 56% of costs picked up by RDA, therefore £14,000 saving.
- Saving of £24,000Generated by reduction in supplies and services cost centre’s including, postage, maps & plans, ICT, printing etc.
- Saving of £27,000Generated by delaying staff recruitment, replacing vacancies at lower grades and internal secondment and reorganisation.
4.2In total the savings listed above amount to £65,000
4.3Further mitigation has been identified as a series of options and choices for consideration by the Management Team. Options put forward to address the shortfall include reduction in staff and redundancy which will have an impact on service provision and resident / customer satisfaction in what is already a highly scrutinised service.
4.4 Further savings agreed as part of this options exercise include:
- Saving of £13,000Generated by delaying recruitment to vacant Arboricultural and Enforcement Officer posts until the next financial year.
- Saving of £11,000Generated by delaying formation of the MAA Strategic Team until 1/4/11.
- Saving of £25,000Generated by reducing by half the £50,000 budget set aside for Local Economic Assessment work in 2010/11. This will compromise the credibility of the evaluation and assessment of the economy.
4.5In total the savings listed above amount to £49,000.
5. Financial Implications
5.1 As outlined in 3 and 4 above.
6.Legal Implications
6.1Possible staff redundancy.
7. Risk Management Implications
7.1Options presented to Management Team in order to address outstanding shortfalls have been risk and impact assessed
8. Equalities Implications
8.1None
9. Conclusions
9.1The net position reported in the September Council Budget Monitoring report after taking into account the savings identified above is a £160,000 shortfall for the Planning & Regeneration Service. This represents a £71,000 reduction on the pressure reported in the August report. Had it not been for the deletion of Housing Planning & Delivery Grant the Unit would be well within budget for the year.
9.2Prudent forecasting of fee income for the second half of the financial year may lead to an improvement in the position at year end but is unlikely to cover the current shortfall.
Stephen Thorne
Head of Planning and Regeneration Services
Contact Officer - Sue Ludwig:Extension: 3308
APPENDIX A12