Commercial planning applications tumble to new low

No1 Spinningfields Winter

Figures released by the Government today show another big fall in commercial planning applications submitted to councils, to a historic low.

Commercial Planning Applications

* 2017/18 figures are year to June 2018.

The latest dip in the figures may be partly related to Brexit, with the construction industry being hit harder than many other sectors. But it’s clear that there is a longer-term issue. The problem does not sit with local authority planners: they are still deciding most applications quickly and are still approving a high proportion.

Residential planning applications have not followed the commercial trend. Yes, residential is still down on the pre-crash levels, but both major and minor residential decisions have been steadily increasing since 2009.

The real question is whether local authorities genuinely understand that commercial applications have more than halved in the last decade. We would expect a drop this big to see councils – and government – working far more proactively to bring in new commercial development. Some are doing just that, but many others seem happy to treat this slump as the new normal and that should sound warning bells in the corridors of power.

A few years ago, councils simply collected business rates and passed them onto the Treasury. These days the councils retain a high proportion of business rates from their area: up to 100%. This was meant to incentivise local authorities to promote more commercial development, but these figures suggest the opposite is happening. The question is: why?

The figures

The three months April to June 2018 saw a 10% drop in commercial planning applications in England, with just 2,200 granted. The year to June 2018 saw a total of 10,625 commercial planning applications submitted to local authorities: 2,039 major and 8,586 minor.

That figure of 10,625 compares poorly to 2007/8. That year saw 25,694 commercial planning application submitted (3,379 major and 22,315 minor). After the 2008 crash the numbers fell sharply, and have continued that fall since. The latest figures are the lowest on record since 2005.

Residential planning applications have also fallen in the year to June 2018. Major residential schemes are down 2% and minor residential have seen a 3% drop.

The rate and speed of approvals has remained fairly steady over the last decade. The most recent figures show councils approving 87% of major applications within 13 weeks and 84% of minor applications within 8 weeks. The rate of approval from councils is also holding steady.

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