Local councils in England received an average of almost £600,000 each over the past three years from planning performance agreements (PPAs), a new report by the Home Builders Federation (HBF) reveals.
The report, Analysing the impact of Planning Performance Agreements, draws on information from Freedom of Information requests to English local authorities between 2022 and 2025.
PPAs are designed to provide a framework through which developers and local councils can manage complex planning applications.
PPAs operate as a memorandum of understanding, rather than a legally binding contract, and are agreed upon before a planning application is formally submitted
HBF’s report warns that PPAs are being used increasingly as a means of securing dedicated resources to progress planning applications.
A PPA agreement means application are no longer measured against the standard statutory determination period. HBF warns that growing reliance on these agreements, alongside Extensions of Time (EoTs), can make headline planning performance statistics less representative of the length of time applicants actually wait for decisions.
The findings come amid persistent staffing shortages across local planning authorities. Previous HBF research showed that 90% of council planning departments are now operating below full capacity, with an estimated 2,660 additional planning officers needed across England and Wales – a 20% increase in shortfall year-on-year.
Neil Jefferson, chief executive at the HBF said: “The planning system needs to provide certainty, transparency, and timely decisions if we are to increase housing supply, but persistent capacity constraints are making that increasingly difficult.
“Planning Performance Agreements have an important role to play in helping manage complex applications, but they should not be relied upon to make up for wider capacity shortages in the planning system. Additional fees cannot become a substitute for a planning system that is properly staffed and equipped to deliver.
“With the government’s housing targets requiring a significant increase in delivery, we need sustained investment in planning departments alongside greater transparency over how additional fees are being used, and how PPAs should be used. A properly resourced and consistent planning system is essential to giving businesses chance to successfully increase housing delivery.”
Neal Moy, managing director at Paragon Development Finance, said: “This research highlights an issue that many developers we work with regularly experience. When planning timelines become unpredictable, the impact is felt throughout the development process: developers are forced to commit additional resources for longer periods, which creates greater uncertainty for lenders around delivery programmes and funding timelines. Over time, this dampens confidence to invest and ultimately slows the pace of housing delivery.”
The HBF is calling on the government to require local planning authorities to publish annual information on the value and allocation of PPA income received for increased transparency. It also wants a more consistent national framework for PPA structures, including charging schedules and service standards to reduce variation between authorities.
The HBF wants the government to issue updated guidance on when PPAs and EoTs should be used and how realistic timelines should be agreed. Their use as a routine response to resource constraints should be discouraged.
