Powers to levy full council tax on incomplete properties should be included in planning reforms, Housing, Communities and Local Government Committee says

The UK Government's proposed reforms to the planning system should include powers for local authorities to levy full council tax on incomplete properties if not completed in a timely period, a report from the Housing, Communities and Local Government Committee has found.

The Local Government Association welcomed the report's recommendations for ensuring houses are built in a timely fashion once developers have received planning permission, particularly the proposal to allow councils to levy full council tax on incomplete properties after a certain time period.

The report, The Future of the Planning System in England, which is an examination of the Government’s proposed reforms of the planning system, says that the ability to tax developers on unbuilt developments would help the government meet its target of building 300,000 homes a year.

To achieve a better ‘build out’ rate, which is the speed with which developments with planning permission are being completed, the committee recommended that a limit of 18 months following discharge of planning conditions for work to commence on site is set. "If work has not progressed to the satisfaction of the local planning authority then the planning permission may be revoked," the report reads.

An allowance of a further 18 months should be given for development to be completed, the report recommended. If a developer fails to complete the house after this, the local authority should be able, "taking account of the size and complexity of the site, and infrastructure to be completed by other parties”, to levy full council tax for each housing unit which has not been completed."

Cllr David Renard, Local Government Association planning spokesperson, welcomed the committee's the call for incentives to tackle the 'build out' rate problem.

Responding to the report, Cllr Renard said: "Councils want to work with government on developing the detail of its Planning Bill and to go further and faster to tackle our housing crisis.

"With more than 1.1 million homes given planning permission over the past decade yet to be built and councils approving 9 in 10 planning applications, it is clear that the planning system is not a barrier to housebuilding and that it is the housing delivery system which is in need of reform.

Cllr Renard added: "There are also more than a million more homes on land earmarked in local plans for development by councils that are yet to be brought forward by developers for planning permission.

"It is therefore good the committee backs our call for councils to be able to levy full council tax on incomplete properties, as an incentive to get developers building more quickly.

"A local, democratically-led planning system remains critical so local communities can continue to have their say on developments, ensure the right homes are built in the right places and shape the area they live in."

The committee asked developer Philip Barnes about the proposals for taxing developers. Mr Barnes said: “They would have to be very, very carefully imposed”, and that mandatory build rates would need to be flexible to accommodate market circumstances.

Further points made in the report involve concerns over how the proposed plan to shift public involvement to the local plan stage might stifle public engagement. “We found that far more people engage with individual planning proposals and fear that the proposed change will reduce public involvement in the planning process”.

While the committee agreed that the proposal to expand the role of digital technology in the planning process would help alleviate public involvement problems, it also recommended that new methods of public interaction be implemented alongside this. These include: "citizens assemblies”; ensuring the public is consulted about the draft Local Plan before rather than concurrently with Secretary of State; and retaining more traditional methods of notification about planning proposals such as signs on lampposts.

In light of the list of reforms proposed by the government, the committee suggested that £500 million over four years of additional funding should be sought by the Ministry for Housing, Communities and Local Government for local planning authorities.

Other recommendations in the report include a call for the government to explain how it plans to replace the duty to cooperate that places a legal duty on councils to work together on planning issues that cross their borders. This is to ensure there is effective cooperation between local authorities and the government.

Adam Carey