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How a lack of council capacity exacerbates the housing crisis

Labour can't build 1.5 million homes without addressing the planning backlog and a skills gap that has built up in local authorities over decades.

By Megan Kenyon

The success (or failure) of the government’s plans to build 1.5 million homes is contingent on the health of its planning system. Local planning authorities are an essential cog in the wheel of development; they oversee the signing-off of applications and ensure the quality of construction.

But a decade of austerity coupled with the proliferation of private consultancies has triggered a slow process of depletion within the sector. Research conducted last year by the Local Government Chronicle found that only one in ten councils in England has a fully staffed planning department.

The government is clearly cognisant of the need for action. Matthew Pennycook, the Housing and Planning Minister, recently said that the shortage of planners “keeps [him] up at night”. The newly renamed Ministry of Housing, Communities and Local Government’s plans for housing include the recruitment of 300 new graduate planning officers as a headline offer. This forms part of £36m package of investment in the planning system to upskill local planners and turbocharge housebuilding.

But with a whack-a-mole array of issues, including the recruitment and retention of planners, will the promise of 300 new graduates prove to be enough? According to sector experts, exclusively focusing on graduate planners may not be the right approach in fixing this crisis. An increasing number of experienced planners have left local authorities to take on positions in the private sector; others have retired.

This has left a dearth of mid-level professionals with the necessary expertise to replace them. The issue is a perennial one. “Planning has been pretty much in terminal decline for 50 years,” Hugh Ellis, director of policy at the Town and Country Planning Association told Spotlight. “What we really lack at the moment in the profession is cohorts of people who have left – either to go into the private sector, or who have left the profession completely.”

Ellis added: “What we really need is experienced senior planners. If it was me, I’d be spending a bit of that money on trying to bring some of them back.” Indeed, this “terminal decline” is reflected in the stats.

According to research by the Royal Town Planning Institute (RTPI), 25 per cent of the planning workforce left their jobs between 2013 and 2020. Recent research from Public Practice, an organisation which places private sector professionals into public sector roles, found that 20 per cent of officers are preparing to leave the public sector in the next two years. As Pooja Agrawal, the chief executive of Public Practice, explained: “The number one challenge in recruitment [for council planning departments] is attracting appropriately qualified or skilled candidates. You can have all the roles [available] but if you can’t get the right skill set into local authorities, that’s a fundamental problem.”

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The head of planning at a district council, who spoke to me on condition of anonymity, agreed. They pointed out that while there has been a steady decline in the number of students joining the profession, “the gap isn’t just about graduates”. They explained that currently, there is a skills gap in the profession which is eating away at capacity within the sector. Clearly, when staff are already overstretched, training new members of staff takes up time which is already precious. And when other experienced members of staff leave for the private sector to take up a higher salary, it can make matters worse. “When experienced planners leave for consultancies, it creates an imbalance in the system, leaving councils with less experienced staff to handle critical work,” they told me.

And this can create a vicious cycle, with an increasing number of councils now forced to go out to private sector consultancies in order to fill the gaps in their expertise. This is a far more expensive option than simply having the staff in-house who have the knowledge and skills to get the job done. The head of planning at a district council said: “Relying on consultancies is more expensive for councils, but if you don’t have the people to do the job you’ve got to find them somewhere.”

This public sector brain-drain coincides with a dire financial landscape for councils. Local authorities’ spending power has been cut by 26 per cent in the decade between 2010-11 and 2020-21 – and an ever shrinking amount of this is going towards planning. According to RTPI, the “administration of planning services at a local level has become more difficult over the past decade”. Their 2023 State of the Profession report found that these difficulties have “worsened the performance of the planning system” by driving the contraction of the public sector and ensuring that planners’ salary growth remains stagnant.

The RTPI’s report also found that, despite occasional growth in revenues, councils are continuing to spend even less on planning. In 2023, the then Conservative government announced its plans to increase the fees charged by planning authorities for planning applications. Fees for major applications were increased by 35 per cent, with those for all other applications rising by 5 per cent. This was intended to raise investment in the sector. But according to RTPI’s research, rising income from planning services did not translate into more money spent on planning. In fact, the research found that direct investment in planning has been decreasing. Net expenditure on planning services dropped by 33 per cent from £893m in 2009-10 and £594 in 2022-23.

Through her work with Public Practice, Agrawal has had first-hand experience of this dramatic reduction in the allocation of funding and resources. Public Practice works to place built-environment professionals from the private sector into the housing and regeneration departments of councils. “The daily conversations we have with officers about recruitment freezes, budget cuts, and teams being deleted – in urban design and regeneration – it fills us with quite a lot of despair,” Agrawal told Spotlight.

The head of planning at a district council explained: “People see the stress and strain in public planning jobs, and when salaries are significantly lower than in the private sector it’s hard to make the case for staying.” They told me that under the current circumstances – with planning on its knees – “the government’s push for 1.5 million houses, combined with a 30-month target for local plans is very, very challenging – if not impossible – to achieve.”

Another key ask for the sector is certainty. Since 2010 the UK has had 16 housing ministers, each bringing their own (or their party’s own) unique agenda to planning and planning reform. This has had a knock-on effect for the workload of England’s planners. And with ongoing capacity and retention issues, it overloads an already strained system. “Some stability would be beneficial,” the head of planning explained. “Each time an announcement is made and there is a change to the system, then that means that local authorities – who may have adapted to a new way of working – will have to redo that work.

Under such dire financial circumstances, with budgets stretched to breaking point, this back and forth can prove almost catastrophic. “Not only is that a drain on council finances,” the head of planning explained, “but it also has an impact on morale within the profession. You just think, well every time I think I’m getting somewhere I have to redo it again.”

This outlook feels bleak; particularly in the midst of an ongoing housing crisis that makes the need for development more pressing. But those working in the sector remain confident that with the right support, the sector can be brought back from the brink. Much of this comes down to reframing what we mean by planning, and how the built-environment sector is viewed as a whole. It needs to be viewed as a more attractive – and more aspirational – sector to work in. Though the departure of experts from the sector is a major issue, it is coupled with the failure to recruit a younger generation of planners into public sector roles. This is evidently the problem which the government funding of 300 more graduate planners has been allocated to solve. But like those leaving the public sector later on in their careers, graduates, too, need to be persuaded to stay on once they have completed their training.

As one planning insider told me, “You can recruit 300 planners into the public sector, but nothing is stopping them from leaving to go to the private sector after two years.” They explained that many young people taking on a career in planning may start with the best of intentions, but capacity challenges and low wages can quickly skew their perspective. “A lot of graduate planners go into public sector planning thinking they’re doing good for society,” they said, “but a lot of times they’re not actually doing planning – it’s more like paper shuffling.”

“The job isn’t about just delivering housing units; it’s about making places that can save people’s lives because they’re built in the right place,” Ellis said, “or that can extend life expectancy because they’re designed to support health and well-being.” He explained that the purpose of planning is not about “doing things to people. It’s about a local, creative, democratic process of meeting people’s collective needs and creating a vision of what our places to look like.”

Agrawal agreed. “We’ve always pushed for a broad definition of planners as place-makers. To create better places or deliver homes, you need a range of skills – you need skills in housing delivery, urban design or in sustainability – not just traditional planning skills.” She explained that by doing so, not only will the change that the planning system is able to affect be broader, but the profession itself will also become more appealing, especially to those with a wider range of expertise. “We need to rethink planning as more than approving developments,” she said. “It’s a tool to unlock growth and create better, more proactive, and creative places.”

Indeed, bolstering capacity within local planning authorities will improve the trust which communities are willing to place in the system. The head of planning at a district council who spoke to Spotlight anonymously explained that, currently, “there is a gap between what communities are promised and what gets delivered on the ground, which creates mistrust and frustration”.

To address this, they explained, councils must improve their relationships with the communities they serve, especially with the young people who are the likely recipients of upcoming development. “There is a role for local authorities to improve the way that they engage with communities digitally,” they explained. They pointed to examples of councils using artificial intelligence (AI) to show what a development might look like once it has been completed. But of course, such initiatives need proper resourcing in order to be delivered.

The new government has lofty ambitions for the planning system. It is often cited by ministers as the key to unlocking the coveted growth which Labour promised ahead of the election. Its proper operation is also crucial to solving the housing crisis.

What is not clear is whether there is true understanding within government of the nature of decline within the planning system. That its headline pledge is the recruitment of 300 graduate planners in the midst of a sector brain-drain, suggests that there isn’t. It would make far more sense – and be far more effective – to institute a broader programme of reform within public sector planning, rejuvenating the profession and making it far more attractive for experts to stay.

Such an extensive programme of change will take time, money and effort – luxuries this government may not have. Labour’s ability to deliver 1.5 million homes may depend on getting it right.

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