The Cost of Delivering a Development Management Service in Wales - Welsh Government

 
The Cost of Delivering a Development Management Service in Wales - Welsh Government
Welsh Government

The Cost of Delivering a
Development
Management Service in
Wales
271751-00
January 2021
The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Executive summary

Ove Arup & Partners Ltd. is delighted to deliver
this report to the Welsh Government which
presents the findings of the ‘Cost of Delivering a
Development Management Service in Wales’
research into planning fees.
The research was commissioned in October
2019 and its overall purpose is to inform
potential improvements to planning fees in
Wales. Through detailed financial modelling, the
research has been able to provide estimates
related to fee income and overall costs across
planning departments in Wales. Using this data,
it presents the potential changes which would
be required to planning fees in order for Local
Planning Authorities in Wales to achieve full
cost recovery. In addition, it explores what a
reformed planning fee schedule could look like if
the existing planning fee regulations were to be
simplified.
This report provides some consideration as to
what the potential implications of the model
findings might be. It will subsequently be for the
Welsh Government to determine how this is
applied within policy and legislation in
collaboration with key stakeholders.

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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Contents

1. Introduction                                                 5
2. Stakeholder Engagement                                       6
3. Approach to the Research                                     7
4. Developing a Data Set                                        8
5. Building the Model                                          10
6. Scenarios and Model Schema                                  14
7. Testing the Model                                           18
8. Key Themes Emerging from the Model                          22
9. Conclusion                                                  24

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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Acknowledgements
This research has been supported by the following:
• Lewis Thomas – Welsh Government
• Owain Williams – Welsh Government

The Arup Project Team:
• Kieron Hyams
• Emmeline Reynish
• Guillermo Guridi Alvarez
• Allan Pitt

The Working Group, including representatives
from the following organisations:
• Neath Port Talbot Council
• Cardiff Council
• Welsh Local Government Association
• Monmouthshire County Council
• Bridgend CBC
• Blaenau Gwent CBC
• Royal Town Planning Institute

Planning Officers Society Wales representatives
from the following organisations:
• Gwynedd Council
• Vale of Glamorgan Council

                                                               Ffynnon Oer Wind Farm, Neath Port Talbot

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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Introduction

Project Context                                                Research Objectives
Planning fees in Wales are detailed within the                 The key objectives of the research are as
Town and Country Planning (Fees for                            follows:
Applications, Deemed Applications and Site                     • To provide a broad definition of Full Cost
Visits) (Wales) Regulations 2015 (as                             Recovery (FCR) in the context of
amended) (herein referred to as ‘the                             delivering a Development Management
regulations’). The Welsh Ministers have the                      Service in Wales;
ability to set these regulations under Section
                                                               • To model FCR in a range of potential
303 of the Town and Country Planning Act
                                                                 scenarios;
1990.
                                                               • Undertake ‘global’ calibration of the model
Previous work carried out by the Welsh Local
                                                                 to help ensure total-cost remains constant
Government Association (WLGA) and the
                                                                 across scenarios, application profiles and
Planning Advisory Service (PAS) has found
                                                                 workload levels;
that overall the current system for calculating
fees is too complex and that there is a need                   • To engage with key stakeholders e.g. the
to reform the current fee regulations, both in                   Planning Officers Society Wales (POSW)
terms of the cost of individual applications,                    in defining FCR and testing model
and the way in which the current regulations                     scenarios.
are structured.                                                The research undertaken covers all of Wales
Arup has been commissioned by the Welsh                        and considers potential changes to planning     Wales Millennium Centre, Cardiff
Government to undertake research to inform                     fees under three scenarios.
improvements to planning fees and this                         The remainder of this report sets out the
report presents the findings. The Arup team                    steps taken by the project team to achieve
that has worked on this research is herein                     the above objectives.
referred to as ‘the project team.’

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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Stakeholder Engagement
The Working Group
At the project outset a Working Group was                      feedback on the scenarios and the key
established to help inform the research. The                   themes emerging from the model findings.
Working Group was comprised of Heads of                        At the first meeting, the Working Group also
Planning from several local authorities in                     suggested further engagement with POSW.
South East Wales, as nominated by POSW,
as well as representatives from industry                       Planning Officers Society Wales
bodies including the WLGA and the Royal                        Representatives of POSW have played an
Town Planning Institute (RTPI).                                important role in providing input into and
An initial Working Group meeting was held in                   advice on the data request which was sent to
November 2019. The purpose of this meeting                     all Local Planning Authorities (LPAs) in Wales
was to introduce the project and to carry out                  in March 2020. Further details in relation to
an initial activity and discussion focused on                  the data request is provided later in this       Working Group 1 – Sample Activity Sheet
defining full cost recovery.                                   report and at Appendix A.
Based on the feedback received at this                         Focused meetings between the project team
meeting, FCR for the purposes of this                          and the POSW Chairs were held in January
research relates to recovering the costs of all                and February 2020. The purpose of these
activities associated with delivering a                        meetings was to agree the content and
Development Management service, which                          format of the data request to be issued in
includes planning enforcement, work carried                    acknowledgement of the resourcing
out in relation to appeals, and input from                     pressures within LPAs and the limited time
specialist Council officers into planning                      available to gather large amounts of data.
decisions.                                                     The data collection exercise is described in
A second meeting with the working group                        further detail later in this report.
was held in November 2020. At this meeting,                                                                     Working Group 2 – Meeting Agenda
the project team shared the model and
invited the Working Group to share their
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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Approach to the Research

Key Stages
The diagram below sets out the key project milestones built into the approach to the research:

                                                               2. Building the
                                                                   Model
                                                                                                                4. Testing the
                                                                                                                    Model
                                                         • Adding existing
   • Analysis of existing
                                                           data to the                                                           • Final issue of
                                                           model.                • Defining                 • Test runs of         the model and
     data and identifying                                                          modelling                  modelling
     strengths as well as                                • Making                                                                  the
                                                           assumptions             scenarios                  and                  accompanying
     any data gaps.                                                                and method                 calibration to
                                                           where required                                                          Final Report
   • Data request to LPAs                                  driven by data          for their                  ensure               (this report).
                                                           or stakeholder          incorporation              consistency
               1. Developing a                             feedback.               into the                   of outputs.
                   Data Set                                                        model.                                            5. Final Output
                                                                                         3. Scenarios and
                                                                                          Model Schema

  As mentioned above, stakeholder engagement has taken place via the Working Group and direct engagement with representatives from
  POSW at Key Stage 1. The second Working Group meeting took place at Key Stage 4. The remainder of this report details the activities
  which have contributed to each key stage within the research.

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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Developing a Data Set
A Review of Existing Data
There is a wealth of existing data available in                the existing regulations.                        This collaborative approach helped ensure
relation to planning application numbers in                    This can often be overlooked, but ‘time spent’   that the data request was both thorough, and
Wales. As such an important first stage in the                 is an important determinant of FCR which the     as clear and easy to complete as possible.
research was to collate this extant                            Project Team felt should be considered.
information to understand how this could be
                                                               A further challenge was that the existing data
used, and to identify any further data
                                                               obtained from PAS did not correspond to the
requirements.
                                                               existing fee categories as presented within
Arup was provided with the following                           the existing fee regulations.
information by the Welsh Government:
                                                               As a result of this, the project team did not
• Development Management Quarterly                             have quantitative evidence as to how many
  Surveys (DMQS) (2007- 2020);                                 applications are received in each fee
• Data from the Planning Advisory Service                      category across Wales.
  Benchmark exercise (2018);                                   This challenge was discussed with the
• Planning Inspectorate (PINS) Planning                        Working Group, and it was agreed that the
  Appeals data (2019).                                         most appropriate way to address this was
This data has been used in the development                     through a request for information to be sent
of the model.                                                  to all LPAs across Wales.
Analysis of existing data highlighted that                     Notwithstanding this, LPA workload and
there were data gaps in relation to overall                    associated time constraints to complete an
annual fee income for LPAs across Wales, as                    expansive data request was duly noted.
well as information related to how LPAs are                    As a result, it was agreed that the
resourced and how much each type of                            project team would develop the data
application costs on average to determine,                     request in consultation with
based on the fee categories detailed within                    representatives from POSW.
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The Cost of Delivering a Development Management Service in Wales - Welsh Government
Cost of Delivering a Development Management Service in Wales
Welsh Government

Developing a Data Set
Data Request to Local Planning Authorities
A data request was issued to LPAs on 5 February 2020. As agreed
with POSW representatives and the Welsh Government, the request
comprised the following:

1. Time Estimates: LPAs were asked to estimate how much Officer
   time is spent on average for each type of application.
2. Number of Applications Validated within Each Fee Category
   and Total Income: LPAs were asked to record the fee and
   category for planning applications received by their authority over
   a four-week period.
The purpose of this exercise was to gather ‘real time’ data from
authorities so that the project team could begin to define FCR on an
‘all Wales’ basis.
The original date of return was 17 March 2020. As a result of the
impact of the Covid-19 pandemic and the national ‘lockdown’, this
date was extended by a further four weeks.
Overall 18 no. responses were received to the data request. This
represents a 72% response rate although some of the data returns
were only part complete. Notwithstanding this, it is considered that
the primary data obtained through the request has made a valuable
contribution to the model. The way in which the data has been
utilised to inform the modelling is explained further later in this report.
A copy of the data request issued to LPAs is provided at Appendix A.

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Building the Model

Laying the Foundations
Model Inputs                                                   Initial Estimation                                 In order to test these estimates to help ensure
The first step required in the modelling                       After inputting all of the data into the model,    robustness, the project team also prepared
process was working out what data should be                    the Project Team set out on a significant data     alternative estimates of costs and fees
inputted into the model in order to work out the               calibration exercise to ensure the model would     arranged by LPA using the PAS data provided.
total planning fee income received across                      lead to robust and well rooted outputs.            In deriving these initial estimates, a significant
Wales versus the costs of delivering the                                                                          challenge was presented by data gaps. In
                                                               Firstly, this involved a series of estimations
development management service. In the first                                                                      several incidences there was no data either
                                                               derived through the data within the model. For
instance this included the datasets as                                                                            from the data request from March 2020 or
                                                               example, by combining the time estimates
previously mentioned: PAS data, DMQS data                                                                         from the secondary PAS data.
                                                               data, salary data and data on working hours
and the primary data derived from the data                     provided by the LPAs, the project team was         In attempting to overcome this, the project
collection exercise with LPAs in March 2020.                   able to make an estimate on the initial cost per   team considered a range of options. It was
In consideration of all the data collated as part              application for each application type within the   found that there was a very positive
of the project, data parameters were set                       existing fee structure.                            correlation between population data at local
specifically in relation to salary data and                                                                       authority level and the PAS costs data (0.84)
                                                               Similarly, fee income across each application
additional costs that were common across                                                                          as well as between population data and PAS
                                                               type was estimated using the fee data and
Planning Departments in Wales e.g. postage                                                                        fees data (0.87). This was a significant finding
                                                               data on application
and publicity for applications.                                                                                   as it meant that population data could be used
                                                               numbers received through the data request.         to interpolate estimates where there were
                                                               As explained on page 8, whilst LPAs were           gaps within the model, ensuring that an all-
                                                               only asked to record these figures over a four     Wales picture could be achieved as set out
                                                               week recording period, through the use of          within the research objectives.
                                                               DMQS data (which records application
                                                               volume) we were able to extrapolate these
                                                               figures to individual fee estimates by
                                                               application type across one year.

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Building the Model

Laying the Foundations
Initial Estimation cont.                                                      Recalibration
In order to ensure the basis of the model was as robust as possible,          After completing the initial estimations, a large scale recalibration
several sensitivities were tested prior to the settling on a set of overall   process was undertaken. This involved re-calculating fees and costs
figures.                                                                      per application and combining the overall estimates with the data
For example, median fees and costs values across all Wales LPAs               obtained by LPAs from the data request. In addition, the project team
were tested alongside the central approach, which consisted of using          undertook an exercise to re-scale ratios of application types provided
the mean. The central approach proved to be more robust, hence the            directly by LPAs against the DMQS over a four year period. The
median approach was discarded.                                                purpose of this was to obtain fees and costs estimates on a per
                                                                              application type basis rather than as an overall figure across all
The model showed that the estimates had elicited a robust set of
                                                                              applications in order to be able to determine different proposed fee
figures, which illustrate the overall annual fee income of planning
                                                                              changes across the 56 existing application types within the regulations.
departments versus the costs associated with delivering their
development management services. Notwithstanding this, prior to               By combining the re-scaled fees, costs and application volumes a final
beginning the scenario modelling, the data was put through a detailed         estimate of overall fees and costs at a pan-Wales level was derived.
recalibration process in order to fortify the estimates further.

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Building the Model
Research Assumptions and Limitations
Research Assumptions
The key assumptions informing the model are as follows:
• Time estimates, salary data and working hours have been based
  on the survey sent to LPAs as set out on page 8. The project team
  assumed most entries to be accurate and amended a few
  significant outliers. All data returns are confidential and not for
  publication.
• The project team has ensured that the salary data available
  accounts for overheads.
• The overall cost estimates presented in the model have been
  derived using a combination of primary data obtained through the
  data request from LPAs and PAS data.                                     Machynlleth Station, Powys
• To help ensure additional departmental costs related to postage
  and publicity are accounted for, these have been incorporated into
  the model at a rate of £100 for major applications and £10 for all
  other application types. Whilst it is recognised that in reality these
  figures will vary with each application, an assumption was made for
  the purpose of modelling.
• The geographic assumptions as described on page 9, have been
  obtained using official data sources (ONS and StatsWales).
• The model does not suggest that any changes are made to
  existing ‘exemption’ categories within the regulations but these
  have been accounted for.

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Building the Model
Research Assumptions and Limitations
Limitations of the Research                                                 Overall however, it was not possible for the study to account for such
As with all research, there are limitations largely based on the            difference particularly in consideration of the brief which was focused
availability of data, timescales and resource.                              on the simplification of planning fees in Wales.
It should be noted that the purpose of this research was not to             It should also be noted that overall there was a general agreement
compare the incomes and efficiencies of individual planning                 amongst Working Group members that a move towards simplifying
authorities across Wales. Rather, the research seeks to provide a           planning fees i.e. reducing the number of categories would be a
Wales-wide picture of potential amendments to planning fees.                preferable approach to creating further complexity.
Part-way through the research programme, was the onset of the
COVID-19 pandemic and first ‘national lockdown’. The extended
deadline for returns to the data request fell during this period and as a
result the level of return may have been impacted as LPAs grappled
with urgent, unforeseen priorities. Notwithstanding this, as presented
on page 8 the data request elicited a good response rate.
During the research programme, in July 2020, the Senedd approved
a general increase of 20% to all planning fees, amending the current
fee regulations. In addition, upper limits to caps and fees were
increased by approximately 4%. Given the advanced stage of the
research at this time, the model is based on the fee regulations in
place prior to the abovementioned amended regulations being
introduced in August 2020.
Finally, the project team acknowledges that there are some
application types within which there is considerable variation. For
example, one of the most challenging categories to account for was
‘Applications for the Variation or Removal of a Condition’ i.e. Section
73 applications given the degree of difference within submissions.
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Scenarios
Developing Model Scenarios
The following modelling scenarios were developed in consultation with the Welsh Government. The scenarios were selected in order to
present a range of potential options for potential planning fee reform in Wales and this is described in more detail in the next sections of this
report.

         Scenario 0                                    Scenario 1             Scenario 2                   Scenario 3              In addition to the adjacent
      Business as Usual                              ‘Cost Recovery       Simplified Charging         Extremely Simplified         Scenarios 2 and 3 have
                                                                              Schedule                 Charging Schedule           each be split into two ‘sub-
                                                                                                                                   scenarios’ as follows:
  This is a ‘calibrated’                      Based on the existing       Based on an amended         Based on an extremely
  version of the current                                                  and simplified fee                                       1. A “standard” version
                                              fee structure with fees                                 simplified free structure.
  situation                                                               structure using actual                                      (i.e. assuming LPAs
                                              redistributed to reflect                                Applications split
  Based on current                                                        costs. Applications split                                   receive a fee for all
                                              actual costs within each                                across the following
  application numbers, fee                                                across the following                                        received applications)
                                              fee category                                            simplified fee
  distribution and income                                                 simplified categories:                                   2. A “performance-
                                                                                                      categories:
                                                                         1. Reserved Matters                                          related” version (i.e.
                                                                                                      Householders
                                                                         2. Householders                                              assuming a proportion
                                                                                                       Minor – Dwellings
                                                                         3. Housing – Minor                                           of all received
                                                                                                       Minor – Land
                                                                         4. Housing – Major            Minor – Buildings
                                                                                                                                      applications is not
                                                                         5. Agriculture – Minor        Major – Dwellings
                                                                                                                                      determined in time and
                                                                         6. Agriculture – Major                                       thus no fee is received
                                                                                                       Major – Land
                                                                         7. Industrial                                                by the LPA).
                                                                                                       Major – Buildings
                                                                         8. Other – Buildings          Other – Buildings
                                                                         9. Other – Fixed                                          The scenarios and the
                                                                                                       Other – Fixed
                                                                         10. Other – Land                                          results from the modelling
                                                                                                       Other – Land
                                                                                                                                   are presented in more
                                                                         11. Exemptions                Exemptions
                                                                                                                                   detail later in this report.

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 Scenarios
Developing Model Scenarios
Scenario 0/1 – Business as usual and Cost                       the land for which the application was being        categories were not the right fit for the data after
Recovery                                                        submitted, with a couple of additional categories   all. Thus, this led to two key changes; firstly,
Prior to exploring what potential there is for                  which are clearly defined.                          both of the above ‘Industrial’ categories were
changes to the existing planning fee structure it               This methodology led to the following simplified    merged into one single category, and
is important to first understand the status quo.                categories, which were subsequently agreed          additionally, the ‘Other’ category was split into
That is why the first step of the project team’s                with the Welsh Government:                          three. This created the following 11 categories,
analytical work consisted of modelling ‘Scenario                                                                    which still present a large degree of
                                                                1.    Reserved Matters
0’ i.e. the current fee structure.                                                                                  simplification when compared to the existing fee
                                                                2.    Householders
                                                                                                                    regulations:
This was followed by Scenario 1, which shows                    3.    Housing – Minor
by how much the fees of each of the 56                          4.    Housing – Major                               1.    Reserved Matters
application categories would have to change to                  5.    Agriculture – Minor                           2.    Householders
achieve FCR on an application-by-application                    6.    Agriculture – Major                           3.    Housing – Minor
basis. This means essentially ending the                        7.    Industrial – Minor                            4.    Housing – Major
current cross-subsidy between different                         8.    Industrial – Major                            5.    Agriculture – Minor
application categories.                                         9.    Other                                         6.    Agriculture – Major
                                                                10.   Exemptions                                    7.    Industrial
Scenario 2 – Simplified Charging Schedule
                                                                                                                    8.    Other- Buildings
One of the key research objectives was to                                                                           9.    Other – Fixed
                                                                The subsequent modelling work consisted of
explore simplification of the categories given the                                                                  10.   Other – Land
                                                                producing estimates of the required fee
current fee structure presents a significant level                                                                  11.   Exemptions
                                                                changes based on combining the data available
of complexity and has many caveats.
                                                                for each of the 56 categories in Scenario 1. This
The project team set out to undertake this task                 was primarily done by using weighted averages       Overall, it is considered that the above set of
by first rationalising the overall number of fee                which brought the different categories together     rationalised categories worked well to inform
categories by bundling related categories                       whilst acknowledging the greater volume of          Scenario 2 in consideration of the data available
together. To do this, the approach was taken of                 applications of certain categories over others.     and following a logical approach to simplifying
grouping categories based on the end use of                                                                         the existing categories.
                                                                This work revealed that some of these
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Scenarios

Developing Model Scenarios
Scenario 3 – Extremely Simplified Charging Schedule                         dwellings or acres of land.
The purpose of Scenario 3 was to generate a set of categories that          Therefore, this combination proved to be unrealistic and unachievable
would lead to an extremely simplified planning fee structure. From the      and the project team was concerned that pursuing this option further
outset, it was clear that this was a complex task and its achievability     would not add value to the overall research.
was uncertain. Notwithstanding this, it provided an interesting test case   Notwithstanding the above, the project team did still want to explore the
as to how far the existing fee structure may be able to be altered and it   potential for ‘extreme simplification’.
could be tested further at the modelling stage.
                                                                            To this end, it was decided that, by splitting down some of these
Originally, the extremely simplified categories agreed with the Welsh       categories, it would still be possible to create a scenario with fewer
Government were:                                                            specificities within scenarios compared to Scenario 2.
1.    Householders                                                          Thus, Minor, Major and Other were split into three categories each,
2.    Minor                                                                 according to the unit of measurement used in the variable fee.
3.    Major
                                                                            This led to the following 11 categories comprising Scenario 3:
4.    Other
5.    Exemptions                                                            1.    Householders
                                                                            2.    Minor – Dwellings
These categories were derived on the basis of attempting to bundle the      3.    Minor – Land
greatest number of Scenario 0/1 categories into each group to reduce        4.    Minor – Buildings
the number of fee categories as much as possible, whilst retaining          5.    Major – Dwellings
some degree of relatedness between the rationalised categories. The         6.    Major – Land
modelling stage revealed that there were great disparities between the      7.    Major – Buildings
categories bundled into several of these groups, particularly pertaining    8.    Other – Buildings
to the way in which variable fees are calculated.                           9.    Other – Fixed
                                                                            10.   Other – Land
This is because some of the categories in Minor or Major, for
                                                                            11.   Exemptions
instance, would be based on different units, such as number of

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Scenarios

Developing Model Scenarios
Scenarios 2b and 3b – Performance Related Versions
From the outset of the project, it was agreed with the Welsh
Government that the project team would explore the feasibility of
generating a sub-set of Scenarios 2 an 3 which would contain the same
categories but present different proposed figures, accounting for the
fact that LPAs do not necessarily receive a fee for all applications
processed.
These so-called ‘performance-related’ scenarios have been built using
DMQS data which suggests that ca. 8% of all applications received by
LPAs are either withdrawn or not decided within the given timeframe.
Therefore, the proposed fee increases in these scenarios are
moderately higher than those in Scenarios 2 and 3.

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Testing the Model

Scenario Modelling
The results of the model scenarios are shown in full in Appendix B. The summaries below present the key findings from each of the scenarios
and the implications of these results are discussed in further detail on page 22.

 Scenario 0/1: Scenario 0, the ‘business as usual case’ and Scenario 1 ‘cost recovery’ are presented as one in the model output. Overall,
 the scenario shows that in order for development management services in Wales to achieve FCR, increases to planning fees would be
 required across almost all existing fee categories. Generally the fee increase required is more marked in relation to ‘minor’ planning
 applications. For example, the model suggests that householder applications would have to increase from a £190 fixed fee to a £475 fee (a
 150% percentage increase) . In the case of full applications for more than 50 dwellings the model suggests a fee increase of 25% would be
 required.
 As can be viewed in Appendix B the model also considers potential variable fee rates for categories which have variable fees within the
 existing regulations. Utilising variable fees allows for more flexibility in the way in which fees are set. Regarding proposed maximum fees,
 these have been derived by uplifting the analogous scenario 0 figures by the same % change as the fixed or variable fees.
  Scenario 2: Scenario 2 considers the potential for a simplified fee structure organised under 11 fee categories as presented on page 9. The
  way in which the existing fee categories have been consolidated can be viewed in Appendix B. Given the consolidation of fee categories, the
  model presented a challenge in terms of the unit which should be used within variable fee categories (e.g. £X per ha, £X per dwelling etc.).
  In order to overcome this, an analysis of each of the variables of the scenario 0 categories which make up the scenario 2 categories was
  conducted. Through this exercise, it became evident that it was necessary to form scenario 2 categories by grouping scenario 0 categories
  which presented the same units. This approach was therefore followed when putting together scenario 2. Overall within the simplified fee
  structure presented in scenario 2 the necessary fee increases required in order to achieve full cost recovery are slightly less pronounced
  that in Scenario 1. The highest increase required would be across minor application categories, the largest being the ‘Minor -Land’ category
  (200%), followed by householder applications (175%) and ‘minor –land’ and ‘minor buildings’ (both 125%). The lowest percentage increase
  is proposed within the ‘other- building’s category at 25%

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Testing the Model

Scenario Modelling

  Scenario 3: As presented in Appendix B, given the extreme simplification of the existing categories within Scenario 3, the proposed fee
  increases in order to achieve cost recovery, are much less pronounced than within Scenario 1. The proposed fee increase has been set at
  50% across all categories, with the exception of the ‘other’ category within which the fee increase proposed is 125%.
  Similarly, to scenario 2 consideration was paid to potential variable fee categories and how these rates could be measured in consideration
  of how the existing fee categories have been consolidated

   Scenarios 2b and 3b: these scenarios present the same category structure as scenarios 2 and 3, respectively. The only difference is that,
  in scenarios 2b and 3b, consideration has been given to applications which are withdrawn – meaning that LPAs are required to do the work
  to process them but do not receive a fee in return. An evidence-based assumption has been made that ca. 8% of all received applications
  are withdrawn. Thus, the proposed fee changes in these scenarios reflect the need to recover an additional amount in fees due to withdrawn
  applications.

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Cost of Delivering a Development Management Service in Wales
Welsh Government

Testing the Model

Presenting the Scenarios
The outputs from each of the model scenarios are presented in Appendix B of this report.
The image overleaf presents a snapshot of Scenario 1 as presented within Appendix B. It pulls out key aspects of the scenario outputs to
assist readers in their analysis.
In particular it should be noted that in each scenario the figure shown in the ‘required fee change’ column differs from the figure presented in
the ‘proposed fee increase’ column. This is because whilst the model at the outset endeavoured to present FCR on an application-by-
application basis, as the outputs progressed it became clear that an element of cross-subsidy between applications would be required in order
to create a consistent and more realistic output.
The ‘proposed fee increase’ column takes the model findings and proportions proposed increases on a more incremental basis across different
fee categories. This was carried out using professional judgement on the basis that the project team also wanted to ensure that there was a
level of consistency and usability within the scenarios. As a result, the decision was taken to use rounded figures for increases rather than
drilling down into more complex percentage figures. The proposed scenarios still present what would be required to achieve FCR on an all-
Wales basis with fairly limited cross-subsidy, particularly when compared to the current situation.

January 2021                                                                                                                                   20
Cost of Delivering a Development Management Service in Wales
Welsh Government

Testing the Model
                                                                                     Proposed fees based   Scale of required fee change is pulled
Presenting the Scenarios                                       Existing fees based                         directly from model findings
                                                               on fee regulations    on model outputs

                                                                                                                            Blank cells unable to
                                                                                                                            be modelled due to
                                                                                                                            lack of available data

                                                                                                                                   Cells shown in grey are those
                                                                                                                                   where there is no existing
                                                                                                                                   category within the current fee
                                                                                                                                   regulations i.e. there is no
                                                                                                                                   maximum fee

                                                                                                                                       Proposed fee increases are
                                                                                                                                       considered holistically
                                                                                                                                       against other categories in
                                                                                                                                       order to create consistency.

January 2021                                                          Model Scenarios – Readers Guide                                                        21
Cost of Delivering a Development Management Service in Wales
Welsh Government

Key Themes Emerging from the Model

For Consideration
LPAs in Wales currently do not achieve full                    With additional data it may be possible to        Notwithstanding this, it is helpful to understand
cost recovery                                                  explore potential for fee changes further,        what this ‘extreme’ simplification could look like
An important first point to note is that the                   particularly in consideration of potential        and the resultant impact that there would be
modelling undertaken clearly demonstrates                      simplification of the existing regulations.       on planning fees.
that costs incurred by Development                             Increases required in minor application           The model also highlights the difficulties in
Management services in Wales currently                         categories                                        trying to simplify a complex existing structure
outstrip income. It is however important to note               Across all three scenarios, a pattern emerges     particularly around determining how variable
again that the model does not account for the                  that suggests there is a requirement for larger   fee rates should be organised and this is an
20% planning fee increased approved in July                    increases across minor application categories,    area which requires further consideration.
2020 and in consideration of this, the proposed                which currently do not recover the costs          Performance Dependent Fee Structure
increases presented within the model would be                  incurred by LPAs in determining them.             The model explores the potential for a
slightly less pronounced if this was                           Anecdotal data from meetings with the             performance dependent fee model, however
incorporated. This must be considered when                     Working Group reinforces these findings and       this may provoke further debate as to whether
using the model to inform any changes to                       feedback received has suggested that these        this approach is implementable and whether or
planning fees in Wales.                                        types of applications take more resource to       not such measures should form part of wider
Data recording                                                 determine than the income received.               holistic changes to planning processes in
This research highlighted gaps in data                         Simplification of the existing fee schedule       Wales e.g. fast track application schemes etc.
recording of planning fees across LPAs and at                  Scenarios 2 and 3 demonstrate how the             which is beyond the scope of this particular
a Wales wide level. A recommendation                           existing fee schedule as presented within the     research.
emerging from the research would be to                         regulations could be simplified. As mentioned     The purpose of this study is not to create a
establish regular reporting of overall fee                     previously, the Working Group generally           new fee schedule and as such how the
income to planning departments in Wales.                       agreed that simplification of planning fees       findings of this research are translated into
Another potential consideration in terms of                    would be beneficial although there was a          policy and legislation is for the Welsh
data would be tracking of resource expenditure                 consensus that perhaps ‘scenario 3’ takes this    Government to determine in collaboration with
in terms of Officer time spent on applications.                too far.                                          key stakeholders.
January 2021                                                                                                                                                22
Cost of Delivering a Development Management Service in Wales
Welsh Government

Key Themes Emerging from the Model

For Consideration
Recommended Fee Structure                                      Therefore, the recommended fee structure           planning professionals and the general
In addition to the considerations presented                    proposes a set of fees that more closely           public.
on page 16, the project team has also                          match the cost of processing each of the 56        However, this would need to be balanced
developed an overall recommendation to the                     application types whilst retaining a small level   carefully with the intention to ensure accurate
Welsh Government as to how the planning                        of cross-subsidy.                                  cost recovery. This would be aided by the
fee structure could evolve and improve in the                  Whilst requiring legislative action, it is         regular reporting of overall fee incomes and
future. This recommendation is presented at                    acknowledged that this approach would              tracking of resource expenditure, which this
Appendix C.                                                    require limited change and disruption to the       report recommends.
The recommended fee structure is to                            existing planning system at a time of great        With additional data in the future, there would
progress with Scenario 1, which is based on                    uncertainty (e.g. associated with Covid-19         be potential for greater changes, particularly
the existing fee structure with fees                           and Brexit).                                       in consideration of the potential simplification
redistributed to reflect actual costs within                   It is however acknowledged that a bolder           of the existing regulations.
each fee category.                                             vision for a planning fees reform could yield      We recommend that this is undertaken in the
The recommended structure would help                           significant benefits.                              medium to longer term, to help reduce the
ensure that more minor fee categories such                     In particular, a simplification of the structure   risk of the Covid-19 pandemic distorting
as householders and discharge of conditions                    similar to that proposed in Scenarios 2 or 3       2020/2021 data.
applications achieve full cost recovery in                     would help streamline the planning process         On balance, therefore, Scenario 1 is at this
consideration of the model findings that                       and facilitate the participation of private        time considered to be the most appropriate
increases in fees are particularly required for                individuals and organisations with no prior        recommendation on the basis of the data
minor application categories.                                  planning experience in the process.                available.
In light of this, a low level of cross-subsidy                 Feedback from the Working Group in relation        The findings of this research provide a
has been considered to be acceptable due to                    to this research suggests across Planning          foundation for the Welsh Government to
the greater capacity of larger applications to                 Departments in Wales there could be support        consider improvements to planning fees in
absorb an increase in planning fees                            for the simplification of the current fee          Wales in both the short and longer term.
compared to minor applications.                                regulations to improve accessibility both for
January 2021                                                                                                                                                     23
Cost of Delivering a Development Management Service in Wales
Welsh Government

Conclusion

Next Steps
By way of conclusion, the Cost of Delivering a
Development Management Service in Wales
research shows that increases to planning fees
would be required in order for Local Planning
Authorities in Wales to achieve full cost recovery,
across all application types.
The research also demonstrates the complexities
of simplifying the existing fee schedule, but
notwithstanding this, also provides some ‘food for
thought’ in terms of what a consolidation of
planning fees in Wales could look like.
The recommendations made within this report and
the findings of the modelling as presented in the
Appendices will now be for the consideration of the
Welsh Government, in collaboration with key
stakeholders.
Any changes to the current planning fee
regulations would have to be made through
changes to legislation.
Consideration should also be had to the ongoing
work being undertaken by the Law Commission in
codifying planning law in Wales to see what                    Burry Port Harbour, Carmarthenshire
implications and synergies there may be between
this work and the outcomes of this research.

January 2021                                                                                         24
Contact:

Kieron Hyams
Ove Arup & Partners Ltd.

4 Pierhead Street
Capital Waterside
Cardiff
CF10 4QP

We shape a better world | www.arup.com
Snowdonia National Park
The Cost of Delivering a Development Service in Wales                  •

Welsh Government

Appendix A

Data Request as issued to Local Planning Authorities (February 2020)

January 2021                                                               27
RESEARCH INTO THE COST OF DELIVERING A DEVELOPMENT MANAGEMENT SERVICE IN WALES - LPA DATA REQUEST

Thank you to both your authority and to the Planning Officers Society for Wales (POSW) for supporting this Welsh Government research. Arup has been commissioned to model planning
application fees in order to model a range of fee structures and any resulting changes in fees to reach full cost recovery. To do this, we need from you up-to-date information on the profile
of planning applications within each current fee category and the related fee income from these applications.

We would like your administration/validation team(s) to record all planning applications received by your authority over a 4 week period and to categorise these into the relevant fee
category. A 'tally sheet' has been provided, should you wish to use it, to help keep a record as applications are processed.

At the end of the 4 week period we would like you to record (in the table below) the total number of applications received in each fee category, the total income received from these
applications and the number of these applications which attracted the maximum fee.

You can begin the 4 week recording period at any time however we would ask that all responses are emailed to us by the 17th March 2020.

PLEASE ONLY COMPLETE CELLS SHADED GREEN. Please return completed forms by email to Emmeline Reynish at emmeline.reynish@arup.com. Queries may also be send to this
email or you can telephone 02920 266688.

        Name of Authority
        Name of Officer making this return
        Email address
        Phone Number (direct)
        Time period covered (date start and date end) (this should be four full calendar weeks)                                                                       From:                               To:
        Return deadline:                                                                                                                                                TUESDAY 17 MARCH 2020

                                                                                                                                                                                     Planning Application Numbers

                                                                                                                                                                               Number of          Total FEE        No of
                                                                                                                                                                              applications         INCOME        MAXIMUM
                                                                                                                                                                               RECEIVED          received (£)       FEE
CODE                                                                       DESCRIPTION                                                                                                                          applications
  A OUTLINE APPLICATIONS
  1 Not more than 2.5ha
  2 More than 2.5ha
  B HOUSEHOLDER APPLICATIONS
  3 Alterations/extensions to single dwelling including works within boundary
  C FULL APPLICATIONS
  4 Alterations/extension to two or more dwellings, including works within boundaries
  5 New dwellings (up to and including 50)
  6 New dwellings (for more than 50)
Full applications - Erection of Buildings (not dwellings, agricultural, glasshouses, plant nor machinery)
  7 Increase of floor space (no more than 40m2)
  8 Increase of floor space (more than 40m2 but no more than 75m2)
  9 Increase of floorspace (more than 75m2)
Full applications - Erection of Buildings (on land used for agriculture/agricultural purposes)
 10 Site area of no more than 465m2
 11 Site area more than 465m2 but not more than 540m2
 12 Site area more than 540m2
Full applications - Erection of glasshouses on land for the purposes of agriculture
 13 Site area not more than 465m2
 14 Site area more than 465m2
Full applications -Erections/alterations/replacement of plant and machinery
 15 Site area not more than 5ha
 16 Site area more than 5ha
Full applications- applications other than building works
 17 Car parks, service roads or other accesses
Waste (use of land for disposal of refuse or waste materials or deposit of material remaining after extraction or storage of materials)
 18 Site area not more than 15ha
 19 Site area more than 15ha
Operations connected with exploratory drilling for oil or natural gas
 20 Site area not more than 7.5 hectares
 21 Site area more than 7.5 hectares
Other operations (winning and working of materials)
 22 Site area not more than 15ha
 23 Site area more than 15ha
 24 Other operations (not coming within any of the above categories)
  D LAWFUL DEVELOPMENT CERTIFICATE
 25 Existing use or Operation
 26 Existing use or Operation - lawful not to comply with any condition or limitation
 27 Proposed use or operation
  E PRIOR APPROVAL
 28 Agricultural and Forestry buildings and operations or demolition of buildings
 29 Telecommunications Code Systems Operators
  F RESERVED MATTERS
 30 Application for removal or variation of a condition following grant of planning permission
 31 Application for approval of reserved matters following outline approval
  G CHANGE OF USE
 32 Change of use of a single dwelling to be used for two or more dwellings (not more than 50 dwellings)
 33 Change of use of a single dwelling to be used for two or more dwellings (more than 50 dwellings)
 34 Change of use of a building for 1 or more separate dwellings (not more than 50 dwellings)
 35 Change of use of a building for 1 or more separate dwellings (more than 50 dwellings)
 36 Other material change of use (of a building or land)
  H ADVERTISING
 37 Relating to the business on the premises
 38 Advance signs which are not situated on or visible from the site , directing the public to a business
 39 Other advertisements
  I    APPLICATION FOR A NON-MATERIAL AMENDMENT
 40 Applications for householder developments
 41 Applications in respect of other developments
  J    FEES FOR DISCHARGE OF CONDITIONS
 42 Applications for householder developments
 43 Applications in respect of other developments
  K EXEMPTIONS
 44 For alterations, extensions etc. to a dwellinghouse for the benefit of a disabled person
 45 An application solely for the purposes of providing a means of access for disabled persons to or within a building or premises to which members of
       the public are admitted.
 46 Listed Building Consent
 47 Conservation Area (CA) Consent
 48 Works to Tree covered by a TPO or in a CA hedgerow removal
 49 If the proposal relates to works that require planning permission only by virtue of an Article 4 direction
 50 If the application is for a lawful development certificate, for existing use, where an application for planning permission for the same development
       would be exempt from the need to pay a planning fee under any other planning fee regulation
 51 If the application is for consent to display an advertisement following either a withdrawal of an earlier application (before notice of decision was
       issued) or where the application is made following refusal of consent for display of an advertisement, and where the application is made on behalf
       of the same person.
 52 If the application is for consent to display an advertisement which results from a direction under Regulation 7 of the Control of Advertisements
       Regulations 1992 dis-applying deemed consent under Regulation 6 to the advertisement in question.
 53 If the application is for alternative proposals for the same site by the same applicant, in order to benefit from the permitted development right in
       Schedule 2, Part 3, Class E of the Town and Country Planning (General Permitted Development) Order 1995 .
  54    Revised applications following withdrawal, refusal, or non-determination which qualify under the terms of Regulation 8 (the 'free go' )
  L     CONCESSIONS
  55    Applications submitted on behalf of Town and Community Councils
  56    Applications made on behalf of a club, society or other organisation (including any persons administering a trust) which is not established or
        conducted for profit and whose objects are the provision of facilities for sport or recreation including the making of a material change of use to the
        land as a playing field or the carrying our of operations for purposes ancillary to the use of land as a playing field (other than the erection of a
        building)

Please include an comments/clarifications you wish to make here:
Type here…
RESEARCH INTO THE COST OF DELIVERING A DEVELOPMENT MANAGEMENT SERVICE IN WALES - LPA DATA REQUEST

Thank you to both your authority and to the Planning Officers Society for Wales (POSW) for supporting this Welsh Government research. Arup has been commissioned to model planning application fees in
order to model a range of fee structures and any resulting changes in fees to reach full cost recovery. To do this, we need from you up-to-date estimates of the average staff salaries and estimates of how
much time is spent on each type of application.

Time estimates should be from validation through to the issue of a decision notice (and should not include pre-application advice or monitoring compliance, but will include legal time on S106). You can
provide your time estimate as you wish, so you could type 7.25 hours in the hours column, or 1 day in the day column (but not both if you only mean one day in total). For larger amounts you can provide a
total in a combination of days and hours if that is helpful. For example if an officer or officers in a category spend a total of one and a half days, this could be entered a 1.5 days, 1 day and (say) 3.5 hours or
(say) 10.75 hours. PLEASE ONLY COMPLETE CELLS SHADED GREEN.

We understand that DM roles/grades will vary across authorities, as such for the purpose of this research we have split time between key job roles. In order to provide some guidance on how you define these
roles we have asked for an average gross salary band for each position. The 'gross salary' figure should include overheads such as National Insurance etc.

We have also asked for an annual lump sum figure for your department's central costs which would include for example budget spent on Committees, IT etc. All of this information will help us better define full
cost recovery.

Please note that all responses will be kept confidential and will only be used for the purpose of this study. WE ARE USING THIS TO PRODUCE AN 'ALL WALES' ESTIMATE - AND NOT TO COMPARE
LPAs. PLEASE BE HONEST WITH YOUR ESTIMATES AND GIVE US 'ACTUALS' WITHOUT WORRYING ABOUT PERFORMANCE. The purpose of the 'cost recovery' approach to fees is to set them at
a level that recovers costs.

Please return forms by email to Emmeline Reynish at emmeline.reynish@arup.com. Queries may also be sent to this email or you can telephone 02920 266688.

        Name of Authority                                                                                                                                                                       Specialist advice includes INTERNAL LOCAL AUTHORITY support such as (but is not limited to) legal
        Name of Officer making this return                                                                                                                                                      support/S106/CIL, arboriculture, architecture, conservation, ecology, education, environmental health,
        Email address                                                                                                                                                                           flooding, highways, housing, landscape, leisure, minerals, planning policy, rights of way, urban design,
                                                                                                                                                                                                viability waste etc. It's intended as 'non-DM' time but we know that team structures vary.
        Phone Number (direct)
                                                                                                                                                                                                To calculate the average specialist advice gross salary, please take the highest salary point for officers
        Return deadline:                                                                                                              TUESDAY 17 MARCH 2020                                     involved, with your estimate the combined average of those. (This avoids you needing to find out salary
        Average Technical Assistant/Planning Support Officer Gross Salary (£)                                                                                                                   information of those outside your team as you can use their salary grade level instead.) If you're not
        Average Planning Officer/Planning Assistant Gross Salary (£)                                                                                                                            sure, get in touch with us.
        Average Senior Planning Officer Gross Salary (£)
        Average Team Leader Gross Salary (£)                                                                                                                                                    We only expect you to estimate based on your experience of what you think it takes to determine an
                                                                                                                                                                                                'average' application. Our experience suggests that LPAs tend to under-estimate the time taken to
        Average Manager/Principal Planning Officer Gross Salary (£)
                                                                                                                                                                                                process individual applications so please consider your responses carefully. You might find it easier to
        Average Chief Planning Officer/Service Head (or equivalent) Salary (£)                                                                                                                  review the form with a colleague.
        Average Specialist Advice Gross Salary (£)
        Average working day (hrs)                                                                                                                                                7.25

                                                                                                                                                                                                                                      Average total time to determine an 'average'
                                                                                                                                                                                                                                          application across all staff involved
                                                                                                                                                                                            Technical     Planning Officer / Senior Planning           Team Leader           Manager /            Chief Planning      Specialist
                                                                                                                                                                                           Assistant /   Planning Assistant      Officer                                     Principal              Officer or
                                                                                                                                                                                        Planning Support                                                                  Planning Officer         equivalent
                                                                                                                                                                                         DaysOffi Hours    Days     Hours     Days    Hours             Days      Hours       Days      Hours      Days      Hours   Days   Hours
CODE                                                                                  DESCRIPTION
   A    OUTLINE APPLICATIONS
   1    Not more than 2.5ha
   2    More than 2.5ha
   B    HOUSEHOLDER APPLICATIONS
   3    Alterations/extensions to single dwelling including works within boundary
   C    FULL APPLICATIONS
   4    Alterations/extension to two or more dwellings, including works within boundaries
   5    New dwellings (up to and including 50)
   6    New dwellings (for more than 50)
Full applications - Erection of Buildings (not dwellings, agricultural, glasshouses, plant nor machinery)
   7    Increase of floor space (no more than 40m2)
   8    Increase of floor space (more than 40m2 but no more than 75m2)
   9    Increase of floorspace (more than 75m2)
Full applications - Erection of Buildings (on land used for agriculture/agricultural purposes)
  10 Site area of no more than 465m2
  11 Site area more than 465m2 but not more than 540m2
  12 Site area more than 540m2
Full applications - Erection of glasshouses on land for the purposes of agriculture
  13 Site area not more than 465m2
  14 Site area more than 465m2
Full applications -Erections/alterations/replacement of plant and machinery
  15 Site area not more than 5ha
  16 Site area more than 5ha
Full app
  17 Car parks, service roads or other accesses
Waste (use of land for disposal of refuse or waste materials or deposit of material remaining after extraction or storage of materials)
  18 Site area not more than 15ha
  19 Site area more than 15ha
Operations connected with exploratory drilling for oil or natural gas
  20 Site area not more than 7.5 hectares
  21 Site area more than 7.5 hectares
Other operations (winning and working of materials)
  22 Site area not more than 15ha
  23 Site area more than 15ha
  24 Other operations (not coming within any of the above categories)
   D    LAWFUL DEVELOPMENT CERTIFICATE
  25 Existing use or Operation
  26 Existing use or Operation - lawful not to comply with any condition or limitation
  27 Proposed use or operation
   E    PRIOR APPROVAL
  28 Agricultural and Forestry buildings and operations or demolition of buildings
  29 Telecommunications Code Systems Operators
   F    RESERVED MATTERS
  30 Application for removal or variation of a condition following grant of planning permission
  31 Application for approval of reserved matters following outline approval
   G    CHANGE OF USE
  32 Change of use of a single dwelling to be used for two or more dwellings (not more than 50 dwellings)
  33 Change of use of a single dwelling to be used for two or more dwellings (more than 50 dwellings)
  34 Change of use of a building for 1 or more separate dwellings (not more than 50 dwellings)
  35 Change of use of a building for 1 or more separate dwellings (more than 50 dwellings)
  36 Other material change of use (of a building or land)
   H    ADVERTISING
  37 Relating to the business on the premises
  38 Advance signs which are not situated on or visible from the site , directing the public to a business
  39 Other advertisements
   I    APPLICATION FOR A NON-MATERIAL AMENDMENT
  40 Applications for householder developments
  41 Applications in respect of other developments
   J    FEES FOR DISCHARGE OF CONDITIONS
  42 Applications for householder developments
  43 Applications in respect of other developments
   K    EXEMPTIONS
  44 For alterations, extensions etc. to a dwellinghouse for the benefit of a disabled person
  45 An application solely for the purposes of providing a means of access for disabled persons to or within a building or premises to which members of the public are
        admitted.
  46 Listed Building Consent
  47 Conservation Area (CA) Consent
  48 Works to Tree covered by a TPO or in a CA hedgerow removal
  49 If the proposal relates to works that require planning permission only by virtue of an Article 4 direction
  50 If the application is for a lawful development certificate, for existing use, where an application for planning permission for the same development would be exempt from
        the need to pay a planning fee under any other planning fee regulation
  51 If the application is for consent to display an advertisement following either a withdrawal of an earlier application (before notice of decision was issued) or where the
        application is made following refusal of consent for display of an advertisement, and where the application is made on behalf of the same person.

  52    If the application is for consent to display an advertisement which results from a direction under Regulation 7 of the Control of Advertisements Regulations 1992 dis-
        applying deemed consent under Regulation 6 to the advertisement in question.
  53    If the application is for alternative proposals for the same site by the same applicant, in order to benefit from the permitted development right in Schedule 2, Part 3,
        Class E of the Town and Country Planning (General Permitted Development) Order 1995 .
  54    Revised applications following withdrawal, refusal, or non-determination which qualify under the terms of Regulation 8 (the 'free go' )
  L     CONCESSIONS
  55    Applications submitted on behalf of Town and Community Councils

  56    Applications made on behalf of a club, society or other organisation (including any persons administering a trust) which is not established or conducted for profit and
        whose objects are the provision of facilities for sport or recreation including the making of a material change of use to the land as a playing field or the carrying our of
        operations for purposes ancillary to the use of land as a playing field (other than the erection of a building)
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