Planning and Building Core Service - strategy for future resourcing

PLANNING AND BUILDING CORE SERVICE: STRATEGY FOR FUTURE RESOURCING _______________

Lodged au Greffe on 27th August 2002

by the Planning and Environment Committee

______________________________

STATES OF JERSEY

STATES GREFFE

150 2002 P.143

Price code: C

PROPOSITION

THE STATES are asked to decide whether they are of opinion -

  (a ) to approve, with effect from January 2003, a user-pays' strategy and to agree that income from fees for

applications for development and building permission should be used exclusively to fund fully the cost of service improvements by the Planning and Environment Committee;

  (b ) to agree that, with effect from January 2003, the Department of Planning and Building Services should be

established as an independent business unit as an initial step towards achieving this strategy;

  (c ) to agree that the strategy should be implemented from January 2003 through the appointment of additional

professional and administrative staff to improve the Planning and Environment Committee's core services, with the increased costs of doing so to be funded wholly by increases in application fees agreed by the Finance and Economics Committee, and with the creation of additional posts to be subject to the approval of the Human Resources Committee;

  (d ) to agree, in principle, subject to paragraph  (e), that there should subsequently be further increases in fees to

enable the Planning and Building (Jersey) Law 2002 to be brought in force in 2004;

  ( e ) to   agree,  in  principle,  that  additional  revenue  funding  should  be  made  available  to  the  Planning  and

Environment Committee to fund the operation of the Planning and Building Appeals Commission which is to be established in accordance with the provisions of the Planning and Building (Jersey) Law 2002;

  (f ) to agree that the new Environment and Public Services Committee to be appointed in December 2002 should,

in consultation with other Committees as appropriate, assess the feasibility of establishing a Planning and Building Agency, and should report to the States on this matter during 2003.

PLANNING AND ENVIRONMENT COMMITTEE

REPORT

Introduction

1. In th  e  last  year  or so the  States  have given  considerable  attention  to  Planning  matters.  They  have  given overwhelming endorsement to the new Island Plan, and have also approved the new Planning and Building Law which is currently awaiting Royal Assent. A resource strategy is a pre-requisite forits introduction.
2. T h e Sta  tes have previously received a detailed report (R.C.13/2002) setting out in detail Environmental Resource Management (ERM)'s review of the Planning Department's application services and a comparison with United Kingdom Local Planning Authorities. Also before the States is an amendment to the new Law which highlights the resource implications of the proposed Planning and Building Appeals Commission, which cannot, and should not, be funded by the Committee in order to protect its independence for Human Rights purposes. The States will also recall the President of the Committee making a Statement to the States in April this year of the reductions in core services which, of necessity, will have to be maintained, pending the agreement to this resource strategy.
3. T  h es e service reductions were necessary as a consequence of the Decision Conference held to determine 2003 revenue budget priorities. It is important for the future delivery of planning and building services that the States approve a strategy for resourcing core services which reflects the priorities now set by the Finance and Economics Committee in the Resource Plan for 2003 and 2004. This proposition seeks to complement the Resource Plan to enable the provision and development of these essential services for the future, in a way that does not compromise the Resource Plan.

Background

4. T h e u nder-resourcing of Planning and Building Services was first brought to the attention of the States on 26th July 1994 when they approved a Proposition of the former Island Development Committee "to approve providing adequate resources to meet its responsibility under the Island Planning (Jersey) Law 1964 (P.84/94)." The accompanying report said that the pressures on Planning Officers were so great that they necessitated a review to ensure the continued long-term quality of the service. In 1999, the Committee's Service Review was completed and published. It reported that despite the Department being under-staffed, Jersey performed better, in terms of application throughput per case officer, than the average for U.K. authorities with similar characteristics. Improvements suggested in their report have been subsequently addressed and implemented with the exception of the recommendation for increased staffing. Late last year ERM consultants carried out an assessment of costs and benchmarking of human resource requirements for maintaining these services, which had seen a decline in performance in the previous two years. TheCommittee's report to the States (R.C.13/2002) published the results of this review, which identified the urgent need to address the long-standing resource problem of Planning and Building Services.
5. B  etw   e en 1994-2001 the Department's revenue budget increased by only 19%. During this same period inflation and wage increases added 30% to the general costs in the Island. Public sector expenditure as a whole increased by 65%. These figures clearly show that the Planning and Building Services element of the Committee's budget has declined very substantially in real terms when set against both public sector expenditure and inflation.

Services have been maintained through windfall increases in the Committee's income, principally from rents on property the Committee administers through Property Services. This is unsustainable in future, particularly if the

functions of Property Services are transferred to another Committee. The Committee's approved manpower has remained unchanged since 1994 except for two temporary "(j)" posts appointed to enable permanent staff to produce the Island Plan. One of these contracts has now ceased and the other has been extended until December 2003 by the Human Resources Committee to enable a Planner to be seconded to the Housing Task Force.

6. T o c o pe within these constraints, the Committee has given priority toits core services and reduced discretionary ones. Priorities have been set through annual business plans but it is no longer possible to sustain an acceptable service.  Many  essential  projects  have  simply  not  been  moved  forward  for many years,  e.g.  environmental improvement in the Island, and service levels for applications have fallen. The Committee has maintained the amount spent on the environment, as these particular resources need to be consolidated pending the machinery of government changes.
7. E a r lie  r this year a bid was submitted to the Decision Conference to restore core "application" services to the level required. This proposal also sought to meet the resource needs of the draft Planning and Building Law by raising

charges for services to 50%, with the States meeting the remaining 50%. This followed the policy agreed by the States in

1995, which determined that the cost of its service should be equally funded by the beneficial user and the taxpayer. The proposal submitted to the Decision Conference this year was not recommended by the conference.

8. T  h is proposal having failed, the Department had no option but to reduce its service level by discontinuing or limiting a number of important, but discretionary, elements of the service, e.g. pre-application advice and informal requests for reconsideration of decisions. These were explained in the President's Statement to the States in April 2002. The Committee has recognised and accepted that the draft Planning and Building Law cannot, for resource reasons, be introduced during 2003, therefore important interim changes to the existing Planning Law have been submitted to the States and been approved. In addition, the Committee will shortly lodge proposals to raise the threshold of developments exempt from the need to obtain permission.
9. T h e s e resource problems are not unique to Jersey. In the Republic of Ireland and United Kingdom, the resourcing of Local Planning Authorities has become critical. A number ofU.K. Local Authorities have found their service levels falling so far below the level required that the Government proposes direct sanctions against them under its "Best Value" legislation. In the U.K., a shortage of Planning Officers has been brought about by pressures of workload, long hours of working, low salaries, limited promotion prospects and has led to difficulties in recruitment. The U.K. Government has responded, in its recent spending review, by increasing significantly, in real terms, the resources available. This is in response to support from bodies such as the CBI, English Heritage, House Builders Federation, Unison, RICS, RTPI, Town and Country Planning Association, British Retail Consortium, Council for the Protection of Rural England, Civic Trust, RSPB and Friends of the Earth. It is known that these problems also exist  in  other  western  developed  nations,  e.g.  in  Canada,  Ottowa's Planning  Department  identifies  similar difficulties in press reports this July.

Need for a Strategy

10. T h e Planning and Environment Committee believes that so far Jersey's Planning Department has done well to survive these intense pressures. It has introduced many improvements in recent years without which the service would almost certainly have collapsed. It also recognises the outstanding commitment and quality ofits professional staff, which has been essential to maintaining satisfactory performance. However, it is absolutely clear that the present  service  falls  substantially  below  the  very  high  level  of expectation  of  Jersey's public  and  of those professions serving the local construction industry. Therefore, maintaining the current service level with existing resources, on the basis that this is only just better than the worst the United Kingdom provides, is neither sustainable nor a realistic option.
11. T h e Planning and Environment Committee believes the States should be given the opportunity to debate the outcome  of the  Committee's Service  Review  and  the  conclusions  of a  Committee  with  nearly  three  years' experience of the issues. Agreement to the proposals will beof great assistance to the transitional committee to be elected in December 2002, as this aspect of the service will be able to follow and build upon a strategic direction approved by the States.

Beneficial user-pays principle

12. A s a wealthy Island, the Jersey community should be able to properly support the essential services it requires. It is recognised, though, that it is no longer practical or fair to expect the taxpayer to continue to meet most of the cost of all of those services. Indeed, the Resource Plan makes it clear that this is no longer possible even if it were thought desirable. It is therefore essential that, where appropriate, a beneficial user-pays strategy be adopted for the future. This requires agreement to ring-fencing or "hypothecation" of this additional income, all of which is needed to fund the improvements in service required.
13. T h e  applications  service  receives  cross-support  from  other  services,  e.g.  policy  planning,  historic  buildings, mapping, and so on. This means that at present only 36% of the costs of development and building control are recovered by fees. The States will recall H.M. Attorney General's advice that non-trading Committees of the States could not "make a profit in applying charges for services since this would be ultra-vires". It is, however, legally acceptable to recover upto the economic costof those services. The present level of charges falls significantly below the level of 50%, which was set by the States as a maximum in 1995. When the charges were introduced these were set modestly to ensure that they were affordable and did not impact adversely on any sector. During the period 1994-2001, at the same time as the decline in Departmental resources, the number of applications submitted increased by over 50% in volume and also in complexity, which is apparent by the unprecedented amount of current building activity in the Island. Whilst it is not known whether this will continue, the level of development required by the Island Plan, particularly to meet housing needs, indicates this will be maintained for at least five years.

Consultations with the Industry on future strategy

14. Pr e lim  inary  consultations  have  taken  place  with  representatives  of  the  professional  groups,  e.g.  architects, surveyors  and  building  designers,  with  whom the  Planning  and  Building  Services  Department  work.  The conclusions reached point the way to the future strategy -

• th a t the standard of planning and building regulation needs to be maintained at least at its present level, so that Jersey does not fall further behind other jurisdictions;

• th a t the setting of standards and enforcement of regulations is seen as a government obligation;

• th a t the service provided by the Planning and Building Services Department is highly regarded but is not available in sufficient quantity and on a timely basis to meet the industry's needs;

• th  at  the "one-stop  shop" which  enables  planning  and  building  permission  to  be  obtained  in  a  single application needs to be retained;

• th a t greater flexibility of process is necessary to ensure the time-scale for building permissions are not unreasonably constrained by Planning negotiations on more contentious applications;

• th e re is a very low level of support for adopting a self-certification system for building control, other than for specialist installations;

• th e re is, however, limited interest in enabling private sector "approved inspectors" for building control with similar arrangements as those in the United Kingdom.

15. T h e overall conclusion of those consulted is that the charges for services are at present much too low (they are much lower than the U.K. for example), and should be substantially increased to enable the employment and engagement of additional staff to deliver a service which is to the standard the user now expects. Their preference is to have a well-resourced States Department for which the users pay - in other words, they are prepared to pay for the service they need.

Staffing

16. T h e experienced staff available to the Planning and Building Services Department has reduced this year as a result of a decision taken not to extend the contract ofone "(j)" category memberof staff recruited from the United Kingdom. The present development control team, which is headed by a locally trained professional, has a high proportion of relatively inexperienced Planning Officers, several ofwhom are currently undergoing training. The high number of complex major applications requires an increase in the experience level of this team. To meet the service standard required will involve the recruitment of additional experienced professional staff. Such increases are essential irrespective of any future change in organisational framework.

Improvements already in progress

17. Se  v eral  initiatives  are  already in progress, many of which were  recommended by the Service Review. The Department has embarked upon a project to enable the submission of planning and building applications on-line, and to allow enquiries on the progress of applications to be checked directly by applicants, over the Internet. It is considered that not only will this reduce the amount of work for the Department, but will be a major contribution to e-government systems. The new system will be linked to the new database of planning and building information, which is in the course of implementation, and the new digital map produced by the Department's state of the art geographic information system. The system will provide exciting corporate opportunities for effective planning in Jersey.
18. T h e clerical procedures in the Department were revised 18 months ago. However, these procedures are being further improved to ensure that, as far as possible, the Building Control and Planning applications streams are organised as best as possible and that all avoidable delays are driven out of the system.
19. T h e Committee has announced its intention to increase the threshold of exemptions from the need to obtain planning permission and in the Autumn regulations will be placed before the States designed to remove the need for applications  in  many cases.  This  will  parallel  the  arrangements  already  introduced  for  exemptions  under  the

Building Bye-Laws and self-certification of controlled fittings and installations.

20. T h e Department is planning for the introduction of the new Planning and Building Law in 2004, which will include all the improvements in policy and practice approved by the States.
21. H o w ever, these initiatives will achieve little, and the full benefits of improvements in service will notbe attained, unless they are matched by the recruitment of additional professional and administrative staff to ensure that the workload of the Department is matched by its ability to deal with applications in the time-scale required.

Beneficial user-pays and the Committee's aims

22. T h e Finance and Economics Committee has recently reviewed its policy and advised the Committee that as part of its user-pays proposals charges in excess of 2½% inflation increases could, with its agreement, be introduced. The Finance and Economics Committee has already been requested to support this beneficial user-pays strategy and has given its support "in principle" prior to the presentation of this report to the States.
23. I n lin  e with the Resource Plan report, it is proposed that performance indicators will be published to provide evidence that the user-pays principle is delivering the services required and providing value for money.
24. I n t h e long-term, the Planning and Environment Committee considers that planning and building services should be provided by an agency funded in large part byfee-income. This needs to be considered carefully by the transitional Environment and Public Services Committee. Non-fee paying services would still need to be funded directly by government.
25. T h e agency approach is also entirely consistent with the key principles setout in P.70/2002, approved by the States in July for the future organisation of States Departments. Creating separation between development and building control functions and the policy and environmental functions would have certain advantages.
26. T h  e Committee considers that a significant beneficiary of the planning system is the public in general, and thus considers that fees should be set to recover at least 50% of the costs of the planning application process. However, as far as the Building Bye-laws are concerned, for the most part the applicant is the main beneficiary, and thus it is proposed to increase the charges for building control towards recovery of the full costs.
27. I n th  e interim, the Committee considers that the Planning and Building Services Department should be established as an independent business unit within the States structure, which could later become a Planning and Building Agency.

Delivering the services in the future

28. Pla  n ning and Building Services is a core Department of the States implementing and delivering onmanyof Government's  strategic  and  detailed  policy  aims.  One  of three  Departments  reporting  to  the  Planning  and Environment Committee, it is responsible for the Committee's statutory functions under the Island Planning (Jersey) Law 1964, and the Public Health (Control of Buildings) (Jersey) Law 1956. The Department comprises four sections -

• P o licy  and  Projects,  which  is  responsible  for  policy  formulation  (for  example,  the  Island  Plan  and supplementary planning guidance) and project work, principally under the Urban Renewal umbrella;

• D e sign and Conservation, which is responsible for the protection of Jersey's Built Heritage, but also makes significant contributions to the planning application process;

• B  ui  lding Control, which assesses the compliance of building projects with the Building Bye-laws through plan-vetting and site inspections during construction; and

• D e velopment Control, which deals with applications, appeals and enforcement under the Planning Law.

Building Control

29. T h e Committee has given thought to the United Kingdom method of appointing private sector practices to deal with Building Bye-Law applications. Such an arrangement would have to be additional to services provided by government. The Committee has taken external professional advice from the United Kingdom and been advised that,

in Jersey, such an arrangement would result in the public sector being left to pick up less favourable and poorly remunerated

work. The most financially attractive business would be "cherry-picked" by the private sector who would poach the best and most experienced professional staff from the Department since no specialist building control expertise exists locally in the private sector. In the local situation, enforcement powers and standard setting would remain a government responsibility, as would the need to monitor the approved inspectors' performance. All this suggests strongly that in Jersey there would be more disadvantages from such an arrangement than advantages. However, the Committee remains open to the possibility that as part of a longer-term strategy (2004 and beyond) such an arrangement may need to be considered. At the present time it does not consider the circumstances justify bringing this proposal forward.

30. T h e Committee has concluded that there is no support locally for a strategy based exclusively on self-certification. Rather it should extend the existing procedures for self-certification of specialist building work and installations. This is a sensible option since it reduces the amount of work required without the attendant disadvantages, which would likely result in a fall in building standards.
31. T h e  French  system  could  also  provide  useful  comparisons.  However,  its  certification  and  enforcement arrangements are under-written by private sector insurance arrangements, which simply don't exist in Jersey or the United Kingdom. The track record of British insurance schemes has so far been unsuccessful. However, in the future it is possible that an extension of self-certification would be an option.
32. T h e Committee recognises that Building Control cannot go on meeting the demands placed upon it without radically  re-thinking  its organisational  structure.  One alternative is the  establishment  of  a separate  agency.  It considers that such an agency, if it were established, would need to increase the charges for Bye-Law application services towards full cost recovery. In practice the need for Government to set Building Bye-Law legislation policy and its responsibility for prosecution and enforcement would necessitate contracting in building control expertise - most likely from the Agency.

Planning

33. D if f erent considerations apply for planning applications. The principal beneficiary of this service is the public in general, so a significant proportion of its cost should bemetby the taxpayer. However, to maintain the standards of service required, fees will need to increase beyond the maximum agreed level of50%. It is not possible at the present time to determine precisely the appropriate fee level required to support the planning part of a viable "Planning and Building Agency". Such considerations would be part of the grant negotiations with government were an agency established. The grant would also need to cover the Planning's non-fee-generating functions.
34. T h e planning service is seen very much as a core government service. There is a significant political dimension, both in the setting of policy and to a lesser extent in dealing with applications in accordance with those policies. As a result, the delivery of those services is seen as a function of government, either as a government department or as a government agency. The options for self-regulation or outsourcing of decision-making simplydonot exist.

Planning and Building Services Agency

35. T h e agency should be big enough to make it viable but avoid excessive costs of bureaucracy. Establishing an arms- length agency could have strategic consequences for the States and the Committee consider it inappropriate to bring forward a specific proposal in advance of the new Machinery of Government changes. However, it clearly remains an option for the future.
36. T h e Committee considers that a first step can bemadeby preparing for the creation of a separate business unit for Planning and Building Services. This would establish a greater degree of internal self-accounting for this service which, were an agency approved by the States in the future, would facilitate the arrangements. Such an independent business unit could achieve a greater level of focus under the transitional arrangements for Government than is possible under the present constraints and administrative rules.

The proposed Strategy

37. I t is proposed that the States approve the strategy outlined below. If approved, the Human Resources Committee would be requested to permit the employment of additional professional and administrative staff during 2003. This would need to be sufficient to restore the core services of the Department to an acceptable level.
38. T h e Human Resources Committee will be asked to assist in assessing the exact requirement for additional posts, the

roles required, whether the posts be permanent or short-term, and their timing. It is hoped as many as possible of the posts

will be filled by local applicants. However, in the absence of specialist professional skills in the Island, it is inevitable that some "(j)" category posts will be required for an initial period, to deal with the more complex and demanding applications and while the local training programme is in progress. The Department's record in training local people is exemplary. The Committee's own forecast of the number of additional staff required to achieve a service improvement in 2003 is 10 additional posts (including contracts), of which 5 might require "(j)" category posts.

39. Sta  ff increases would be constrained by the revenue generated through increases in fees, from 36%of present costs to  around  of 50%  of future costs.  The States  should  be  aware  that  the  fee  increases  needed  to  fund  the improvements in the service will be substantial. Full funding of the service improvements would require the present level of charges to increase by a factor of 2.5. This would bring them to a level broadly equivalent with those applicable in the United Kingdom.The impact of the increased charges is best illustrated by applications relating to construction of new units of housing. The present fees per unit of accommodation constructed are -

Planning £64 Building £126 £190

40. I n J a nuary 2003 fees would need to increase to -

Planning £160 Building £320 £480

41. Fe e s were last altered on 1st January 2001 when an increase of 2½% was made.
42. T h e States should be aware that the 10 additional staff forecast for 2003 would bring about an improvement in the service levels, but would not be sufficient to enable the introduction of the Planning and Building Law in 2004. To achieve this objective, further increases in fees would be required from 2004, sufficient to fund the additional costs, which were previously set out in detail in R.C.13/2002. Similarly, under a wholly user-pays strategy the Committee forecasts that application fees for constructing a new unit of residential accommodation would need to be further increased to, approximately -

Planning £253 Building £500 £753

43. Pr o v isional financial forecasts show that these fees, which are considered reasonable, would be sufficient to fund the additional departmental costs for the new Planning and Building Law, by the adoption of the beneficial user- pays strategy.
44. T h e introduction of the draft Planning and Building Law is also contingent on the establishment of the Planning and Building Appeals Commission, the costs of which are indicated in the proposed amendment to that law (P.56/2002). The Commission would require States funding.

Conclusions

45. T h e Resource Plan (at 4.4) refers to the fundamental review of expenditure proposed for 2004 and 2005. It is made clear  that  departments  will  need  to  focus  on the  costs  and  priorities  of  their  services  and inter  alia the implementation  of the  user  pays  principle.  As  many  States  members  know,  the  Planning  and  Environment Committee's bids at the 2003 revenue decision conference were based, uniquely, on the principle of beneficial user- pays. To that extent the Committee was ahead of its time, but in preparing those bids, and subsequently this strategy it has been able to demonstrate how essential service improvements can be obtained at no additional cost to the States.
46. T h o s e users of its services that the Committee has consulted have indicated that they would be more than prepared to pay significantly extra for the Department's services, if they were to receive a significantly improved service. These increases should not be seen simply as additional costs, as the present delays and uncertainty are more costly to applicants. The fee increases proposed are likely to be less than those costs and recovered by applicants through greater certainty and speedier outcomes.

47. T h  e beneficial user-pays principle is clearly an important component of funding in the future for the States, and there are compelling reasons why it should be introduced from January 2003 for planning and building services.