Alan Coleman, relationship director at Secure Trust Bank Real Estate Finance, explores the risks currently associated with the bill and the key considerations that must be made
As the government sets out to accelerate development, the Planning & Infrastructure Bill presents both opportunity and risk. Success will depend on clarity, consistency and a renewed focus on sustainability – but can it deliver the homes Britain desperately needs without compromising on quality or the environment?
Introduced earlier this year, the Planning & Infrastructure Bill signals a potentially significant step forward in the government’s ambition to ‘get Britain building again’. Centred around streamlining the delivery of new homes and critical infrastructure across the nation, the bill aims to address inefficiencies in the current planning system and facilitate the construction of 1.5m new homes by the end of the current parliament.
To achieve this, however, an industry in desperate need of a confidence boost must be revitalised. We are, of course, referring to the housebuilding sector, which has faced a perfect storm of challenges in recent years, including rising material costs, labour shortages, and supply chain disruptions. In all honesty, you could replace ‘housebuilding’ from the previous sentence with any other industry, and it would still be factually correct. Yet, possibly the most infuriating constraint experienced by almost every developer continues to be planning delays.
In fact, planning approvals in the UK have declined exponentially since 2018. Yes, a little-known global pandemic might have contributed to this decline, but long gone are the days of Q4 2007, when 5,719 projects received planning permission. To contrast, Q1 2025 saw just 2,046.
Various initiatives have already sought to address the overarching issue, such as the New Homes Accelerator programme and the Deputy Prime Minister’s promise of a ‘devolution revolution’. The Planning & Infrastructure Bill seeks to take that momentum further through a handful of directives, such as empowering councils to set their own planning fees, with the goal of reinvesting proceeds to into improving planning services. This is just one of several proposals that could swing the pendulum of its success, but why?
Planning reform in need of planners
On the surface, enabling Local Planning Authorities (LPAs) to set their own fees to recover the costs incurred from processing and determining applications could be a positive move. In theory, historically under-resourced planning departments could invest in addressing their own labour shortages, building larger teams capable of processing applications more efficiently and reducing the bottleneck that continues to plague housebuilders.
Even with new funding mechanisms and a streamlined process, however, LPAs may struggle to deliver meaningful reform without a substantial boost in skilled personnel. Years upon years of underinvestment have left departments understaffed and overstretched, with experienced planners retiring and too few entering the profession to replace them. It is estimated that 2,200 planning officers are needed across England and Wales to address the growing gap, with local authorities also facing high turnover rates and reliance on costly agency workers.
Without a strategy to recruit, train and retain planning professionals, there is a major risk that reforms will falter at the point of delivery. Industry bodies have rightly called for a national skills strategy to accompany the bill, including investment in planning, apprenticeships, digital training, and clearer pathways to attract new talent into the sector. However, only time will tell if this comes to fruition.
Avoiding a postcode lottery
Currently, planning fees are set nationally, but they often fail to cover the actual costs that LPAs incur when processing applications. This has led to an estimated £362m annual funding shortfall in development management services. Without empowering LPAs to set their own planning fees, the government has argued that they will continue to experience deficits amid ongoing local government funding pressures, and capacity issues in the planning system would not be addressed.
However, a consistent and fair approach will be essential as, without proper guardrails in place, there is a risk of a ‘postcode lottery’, where developers could be disproportionately affected by fees that vary wildly between regions. It suddenly becomes a lot more appealing to build in certain areas, which are then favoured not because of strategic considerations, but simply due to lower costs. This could undermine the government’s efforts to promote growth nationwide, exacerbating regional inequalities in the process.
Here, it is essential to note that planning fees will be capped at cost recovery, and the government reserves the right to intervene if fees are deemed excessive. However, early clarification on what can be classed as ‘cost recovery’ is necessary so all LPAs follow the same procedure. Additionally, some form of adjustment for SME developers, especially those delivering affordable or small-scale housing, may be worth exploring to avoid unintended financial strain.
Nature vs numbers
The bill’s approach to environmental regulation has understandably drawn scrutiny over the past few months. Under the new framework, developers operating in areas covered by an Environmental Development Plan (EDP) can opt to pay a Nature Restoration Levy into a centralised Nature Restoration Fund, rather than directly mitigating environmental impacts on-site.
While the government affirms that the new Nature Restoration Fund could provide an alternative means of meeting environmental responsibilities, enabling more strategic conservation efforts, concerns remain that it could lead to a disconnect between development and local environmental accountability. The Chartered Institute of Ecology and Environmental Management has criticised the proposals, labelling them as indicative of environmental regression.
This conversation reflects a wider issue – how to balance the urgent need for housing with the equally pressing need to protect the natural environment. It could be argued that the solution lies not in abandoning environmental safeguards for the sake of speed, but in replacing vague and inconsistent guidelines, such as those associated with nutrient neutrality, with clear and enforceable rules. Such rules would help to instil greater confidence on both sides of the debate, ensuring that developers have certainty and speed, while communities and conservationists can trust that environmental protections are not being quietly eroded in the name of growth.
Backing the builders Britain needs
It’s vital that the Planning & Infrastructure Bill does not overlook the role SME developers can play in delivering more homes. SMEs are essential to building diverse, tailored housing, yet often face disproportionate challenges in navigating the planning system when compared to their larger, more financially resilient competitors. The planning system has undoubtedly taken its toll on SMEs, who have seen their contribution to new homes decline from 40% in the 1980s to around 10% today.
To prevent this figure from falling any further, the government has recently unveiled a range of directives aimed at empowering SMEs to play a greater role in addressing the housing crisis and meeting its target of building 1.5 million new homes by 2030. These include streamlined planning routes for smaller developments, particularly those with up to nine homes, which will be prioritised by planning officers and allowed to bypass full planning committees. This intends to reduce delays and administrative burdens that continue to disproportionately affect smaller firms, freeing up capacity and encouraging more localised development.
In addition, the government is proposing a reform of site thresholds within the planning system, further acknowledging the unique needs of smaller sites. A new ‘medium site’ category is being explored, which would sit between minor and major development classifications while benefiting from simplified planning requirements. This could help to unlock stalled sites and reduce the regulatory restraints that deter SMEs from entering or remaining in the market.
Biodiversity without barriers
Environmental regulations are also being recalibrated with SMEs in mind. Biodiversity Net Gain (BNG) requirements, which mandate a 10% improvement in biodiversity on new developments, have always posed a concern for smaller builders. In response, the government has proposed near exemptions for developments of up to nine homes, whereas those with 10-49 homes will benefit from a ‘revised simplified metric’.
While not directly related to the Planning & Infrastructure Bill, finding that balance between preserving biodiversity and building new homes may have just become slightly more difficult. Easing environmental obligations may help SMEs re-enter the market, but doing so raises questions about the consistency and integrity of biodiversity protections, especially when the incoming Nature Restoration Fund is factored in.
To ensure that environmental outcomes are not disregarded, this will require robust oversight and ongoing engagement with both industry and ecological experts. For SMEs, the success of these reforms will depend not only on regulatory flexibility but also on clear guidance, accessible tools and consistent support from LPAs. If implemented effectively, these measures could prove crucial in restoring the role of SMEs as a major player in the delivery of new homes, bringing diversity, innovation, and community focus back into the heart of the planning system.
Getting growth right
The Planning & Infrastructure Bill arrives at a pivotal moment. It offers real opportunities to accelerate development and address systemic challenges — but to do so effectively, it must be shaped with nuance, clarity, and long-term thinking.
That means more than just speeding up the approval process. A successful planning system must ensure that we are building in the right places, with the right infrastructure, and incorporating green space and environmental resilience to support the sustainable growth of communities. Building homes quickly is important, but building them well is essential. That includes ensuring developments are connected to transport, supported by schools and healthcare, and designed with climate adaptation and biodiversity in mind.
The bill’s success also hinges on how well it supports stakeholders, including SME developers, LPAs, environmental groups, and infrastructure providers. It must foster a system that is both predictable and flexible, ambitious yet inclusive, and capable of delivering not just homes, but places where people want to live. If the bill can strike this balance, it could help unlock the high-quality homes and infrastructure Britain needs — not just today, but for generations to come.
