The current global financial crisis is causing uncertainty for many businesses and organisations, not least councils.
We rely on income to help provide services, and when belts are tightened and development slows down, our carefully-balanced budget is affected.
Councils such as Tandridge DC, with small budgets, are particularly vulnerable, whereas larger authorities often have more flexibility to cope.
Like several councils in Surrey, Tandridge is not getting as much income as expected from planning applications. This is not only because of the economic downturn, but because the Government has introduced changes to planning regulations.
To help offset the under-recovery, alternative sources of income such as charges for pre-application advice, are being introduced.
For the last 60 years, house extensions within certain size limits were permitted development, and did not need a planning application. From 1 October, whether extensions need an application now depends on impact.
Planners, builders and, most importantly, homeowners, are trying hard to interpret the new rules, which are not always clear.
The Government’s aim has been to simplify rules and reduce the need for many householder planning applications. But this confusion over the new rules, far from reducing work, in some cases, is increasing it.
Fewer applications means less income, but with as much, if not more, work. This is a severe challenge for councils – just as global uncertainty is for most businesses, organisations and individuals.
An important source of income for councils, including Tandridge, is the housing and planning delivery grant from the Government.
Good performers, like Tandridge, receive a higher grant, which helps provide services and keeps council tax increases down. But one of the measures used to fix the level of grant is the number of new houses completed in the area.
The economic downturn is likely to result in a sudden drop in new homes, and a decrease in our grant. Fewer properties being built also means less Section 106 money for affordable housing and infrastructure improvements.
Councils are already working hard to deal with these challenges, as well as helping businesses and the community deal with theirs.
Stephen Weigel is chief executive of Tandridge DC
Breaking down England's fiscal devolution plans
David Phillips of the IFS tells LocalGov why England's regional finance reforms are modest by global comparison and what ministers still need to get right.
