Small firms suffer at hands of planning authorities

Local planning authorities and regulations could be costing small construction firms millions of pounds, according to new research.

The Federation of Small Businesses (FSB) has suggested that smaller building projects have significantly higher costs attached, which makes it difficult for more minor firms to operate.

Their estimates suggest that the difference in project costs between smaller and larger firms could be as much as 14%.

The FSB has voiced its concerns that the situation is becoming a lose-lose one for all involved as the costs mean smaller firms are not willing to take on projects of ten properties or fewer, despite them being otherwise viable.

Those developers that do opt to take on these project can lose funds or even be left struggling to complete them in some cases, as the finances are simply not available.

Providing support to these firms could also potentially offer a solution to the purported housing crisis, by helping to increase the supply of properties to the market.

It falls on the shoulders of local planning authorities to set the Community Infrastructure Levy relating to planning charges, should they choose to do so.

Essentially this means that some regions may not impose planning charges although others might, while a number of other regulatory formats are also still in use.

Should smaller projects receive greater support, it could mean that small house builders are not left overburdened with costs that they simply cannot afford.

Flexibility is key for smaller firms as they operate of far tighter margins than mainstream developers, meaning they have to carefully consider the financial implications of every project they take on

Firms in difficulty should contact insolvency practitioners for support, as services are available that can help ensure any projects are brought to successful conclusions.

This can include issues that can result from building regulations, rental arrears, or even problems that can arise from the mismanagement of a site.

By Phil Smith

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