In the press release on the launch of this consultation, the government mentions two reports which contain some evidence to this effect.
Firstly, on the more anecdotal side of things, they link to a 2017 report entitled Reversing the decline of small housebuilders by the Home Builders Federation, the representative body for home builders in England and Wales. This report, in particular, identifies the bureaucratic nature of the planning process as a significant barrier to market entry for SMEs (small and medium-sized enterprises). The extract from the foreword below provides a taste of the general thrust of the report.
This report provides an in-depth study into the reasons behind the
decline of the small and medium sized home builders. This decline is
the principle cause of the housing crisis and can be traced back to
the ‘Genie out of the bottle’ 1990 Planning Acts; combined with the
financial crisis of the late 2000s. Obtaining planning permission
today is a bureaucratic nightmare and beyond the resources of many SME
builders; it is a real barrier to entry – even if they can obtain
- Steve Morgan CBE, Chairman, Redrow plc
In addition, page 24 of the report examines particular problems for SMEs within the planning process in particular. On the topic of being put off applying in particular, the following quote by an unnamed Housebuilder interviewee is presented:
There are council district areas that a number of the PLCs just won’t
touch because they’re such a pain to deal with. And being small,
you’ve got to try and work with the people who are, in effect,
controlling your major supply line.
Secondly, they link to a report on a 2017 survey of 468 companies carried out by the National House Building Council entitled Small house builders and developers: Current challenges to growth. Section 7 of the report looks at the effects of the planning process in depth, but to present a few of their key findings:
- The planning process and associated costs – 38% of the companies
surveyed ranked this as their most serious business challenge and 31%
ranked it as their second main challenge. This presents a more pessimistic view of the
situation than in 2014.
- Many respondents expressed a preference for avoiding the planning
appeals process due to the time, resources and costs involved.
This second point appears to be based on focus group interviews rather than survey responses, however.
The focus group conversations demonstrated participants’ awareness of
the planning appeals process and its use in cases of
non-determination, refusals of permission and outcomes that were
considered unacceptable due to the imposition of conditions. However,
the length of time, potential costs and uncertainty of the appeal
process drew negative responses, largely being described as a route
that was not viable for most small developments and businesses with
I think, perhaps, that rather than the government spokesperson's quote being interpreted as there being a significant number of developers who are so disillusioned by the planning process that they don't apply at all, it makes more sense to interpret it as the planning process being such a significant barrier that fewer SMEs are able to successfully enter the market in the first place, leading to a reduction in applications. This perhaps rather charitable interpretation of the quote is more readily supported by the evidence presented by the government.