Subsidising planning services is costing authorities almost £5m a week as they await a proposed fee increase to help cover the cost of processing applications, according to the Local Government Association (LGA).

In a policy paper accompanying the Levelling Up and Regeneration Bill, which is being debated in the House of Lords, the Government has proposed raising planning fees by 35% for major applications and 25% for minor and other applications.

The LGA has urged the Government to ‘urgently’ make Parliamentary time to introduce the uplift.

Planning fees do not currently cover the cost of processing planning applications, with 305 of 343 local authority planning departments operating in a deficit totalling £245.4m in 2020-21, according to the LGA.

Modelling suggests that fees would need to be increased by 57% to make up the deficit, highlighting the need for councils to be able to set fees at a local level, the LGA has said.

LGA planning spokesperson Cllr Darren Rodwell said: ‘It is good the Government has recognised the resource issues facing council planning teams and announced it will increase planning fees.

‘While this will not resolve all the capacity challenges within planning departments or prevent a significant national funding shortfall, it is vital the Government does not delay introducing the fee uplift, or taxpayers could be faced with a cost of subsidising the planning system to the tune of almost £5m a week.

‘Only by giving councils the flexibility to set planning fees at a local level can they cover their full costs relating to planning.’