A study by the Local Government Association (LGA) has found that there is a £450m shortfall across England and Wales between fees paid for planning applications and the cost of processing them.
The LGA, which represents more than 370 councils in England and Wales, is urging central government to let them set their own planning fee rates.
“Locally-set fees would also allow councils to protect residents from hiked fees while developers and housebuilders could pay more to improve the ability of councils to speed up the planning process and maintain high-quality planning decisions," said LGA housing spokesman Peter Box.
The call follows a British Property Federation survey last month that found two-thirds of its private sector members would be willing to pay increased fees to help under-resourced planning departments keep providing an effective service.
On average, 467,000 planning applications are submitted each year. LGA’s analysis suggests the cost to councils of processing planning applications is growing at a rate of around £150m a year.
British Property Federation chief executive Melanie Leech said: "Both the public and private sectors are very clear that the current lack of resources for local authority planning departments is a problem, and that it is hindering development that can bring about much needed regeneration across the UK.
"The government has talked a lot about how much it wants to get Britain building again, and ahead of the spending review we would strongly advise against further national cuts to planning departments if it wants to make this a reality. Instead, we would like to see government undertake a review looking at how the private sector might be able to make additional payments to planning departments in return for a quality service."
The LGA's 2015 spending review submission, Spending Smarter: A Shared Commitment can be read at http://www.local.gov.uk/documents/10180/6869714/L15-359+Smarter+Spending_02.pdf/7d5e2993-9495-46dc-be67-873e8606e57b