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18 April 2019

824: MMO to charge for statutory consultation

Today’s entry reports on the Marine Management Organisation’s intention to start charging for statutory consultations under the Planning Act 2008.

The Marine Management Organisation (MMO), the body that licenses works in the sea and tidal rivers, is a statutory consultee for nationally significant infrastructure projects that have an impact in such areas. It has issued a letter to its customers announcing that it intends to start charging for responding to statutory consultations under section 42 of the Planning Act 2008 from 29 April 2019.

The charge will be at cost (based on a rate of £122 per hour), and the letter estimates the average cost of a s42 consultation response as £8,500 (so about 70 hours’ work). In justifying its position, the letter says that the MMO can charge for its services under section 27 of the Marine and Coastal Access Act 2009, and that cost recovery is in line with Government policy.

I have to say I am sceptical as to whether the MMO can do this, and I recommend that it only proceeds with great care. It can indeed charge for services, but in my view, responding to a statutory consultation may not be a ‘service’. Local authorities got into a pickle in that area in the 1990s. Furthermore, the letter relies on the fact that although the consultation is statutory, responding to it is discretionary (which is true). However, the MMO has a general duty (ie not a discretion) to exercise its functions (and I paraphrase) to control its area towards achieving sustainable development, among other things. It is arguable that it would run counter to that duty to refuse to respond to a statutory consultation on a project that impacted its area because it was not being paid. I’d be very interested to hear views on this proposal; I have a copy of the letter if anyone wants to see it.

Although not a legal issue, if every statutory consultee took the same approach, and there are about 100 of them, that could add £850,000 to the cost of a statutory consultation for each project, which would clearly deter many developers from making applications. If the MMO can start charging for responding to statutory consultations, it might consider charging for other participation in the Planning Act 2008 regime with others following suit, since that is also statutory but discretionary, and the costs would snowball accordingly.

The question of charging for services is a topical one, as such charges are increasingly adding to developers’ costs when preparing applications for development consent. While optional advice services can clearly be charged for, and statutory obligations that do not have a specific charging regime cannot, where is the line in between? This latest move might well help establish where it is.

A side issue is that if a statutory body (or landowner, come to that) refuses to engage unless it is paid, then is that a valid ground for a developer not engaging with it? I have come across companies insisting that they shouldn’t be out of pocket because of someone else’s project, but is that the true test? Is a developer within its rights to say ‘OK, don’t engage then, we will just carry on doing what we originally proposed’? I don’t think there is a generally accepted answer to such questions, and pressure on developers to pay up is only increasing. Developers do not have infinite resources though, and if a project gets so lumbered with third party costs that it becomes unviable, that is the equivalent of killing the goose that lays the golden eggs, or more prosaically preventing infrastructure that is urgently needed from being built.

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