National Audit Office says application process is being subverted to meet 'perverse' handling speed targets so councils can qualify for extra funding

Councils are unnecessarily rejecting planning applications to improve processing speeds, in a desperate bid to meet government targets and win millions of pounds' worth of grants, a public watchdog has warned.

The Department for Communities and Local Government (DCLG) has given local authorities around £68m a year to speed up the handling of planning applications.

But a report by the National Audit Office (NAO) found that the grant is centred on “perverse” targets that encourage councils to reject planning applications.

It said that successful applications for significant residential schemes are generally taking nearly 26 weeks to approve, double the 13-week target set by Whitehall.

As a result, increasing numbers of local authorities are trying to meet the 13-week target by rejecting applications or encouraging developers to withdraw them, allowing the councils to qualify for the grant money.

The report said: “While authorities are taking more discussions on major housing schemes within 13 weeks, the true extent of the improvement across the development process was not as clear as it could be.”

It acknowledged that the DCLG has successfully encouraged planning authorities to hold pre-application discussions with developers. But it said there sometimes remains a “lack of clarity over the purpose of these discussions”, leading authorities to take an “inconsistent approach in handling these meetings, reducing their effectiveness”.

Tim Burr, head of the NAO, said that while more decisions on major housing schemes are now being taken within 13 weeks than was the case five years ago, whether the speed of development has increased is less clear.