Planning fees write-offs set to be millions of euro
WEXFORD County Council has begun writing off millions of euro in planning fees which will never be collected because construction projects have been torpedoed by the recession.
Head of finance Annette O'Neill took members through figures that showing that the amount officially shown to be outstanding has dropped from €25.2 million in 2010 down to €23.2 million in 2011, to €17.7 million last year, with further write-offs to come.
Councillors were reminded that 8,320 planning permissions have been granted in the past five years. A majority of the applicants have paid their fees but more than 1,100 show up on the records as owing money to the local authority, with some of the biggest developments among those which have not yielded any cash to the council.
Ms O'Neill said that one of the main reasons for the drop-off has been the fact that many proposals either have never been started or have not been completed. The council successfully collected €6.4 million in planning fees between 2010 and 2012.
The number of planning applications has dropped dramatically in recent times. The head of finance noted that permission expires after five years and that many of the projects for which fees are notionally outstanding will soon reach the five-year mark, at which point the local authority will have to accept that they will not be paid.
Officials have conducted a case-by-case review of 46 of the larger accounts, most of them over the €100,000 mark with a combined notional value of €11.6 million. The research suggested that 85 per cent of the money will probably never be collected because projects have not taken off, leaving just €1.7 million to come from completed work.
The elected members were told that the council's policy is never to write off planning fees as bad debts where construction has proceeded. Ms O'Neill revealed that most of the 16 biggest slow payers are not housing developers but promoters of industrial units or hotels. Many of them are making an effort to deal with the debt through, she said.
'The stark reality is that we will have less income,' concluded Cllr Padge Reck, pictured. He was assured by officials that the council does not depend on planning levies to pay for day-to-day services. The money goes instead into an account reserved for capital projects.
The council has been very successful at collecting the fees due on houses as solicitors handling sales routinely require proof that the money has been paid. Ms O'Neill said there were very few, if any, housing estates where money is owed.
Acting county manager Adrian Doyle described the issue of unpaid planning fees as complex. In some cases, the council found itself dealing with receivers or with NAMA or with banks. He felt that, in some cases, if debtors are pursued for payment then they might be driven out of business.