The Confederation of British Industry (CBI) has responded to the government's announcement that it will increase fees on planning applications by 15%, saying it could increase the "strain" on businesses.

Rhian Kelly, CBI director for business environment, said: "While businesses are in favour of planning application fees being set centrally, the government should be mindful of the additional strain that this 15% increase will put on firms, who are already cautious with their development plans in these challenging economic times.

“Hard-pressed businesses and investors will expect the fee increase to be matched by service improvements, and the onus is on the government to monitor performance, so that investment is not deterred.”

The government's announcement was made yesterday (3 July) by Decentralisation Minister Greg Clark. In a written statement, he pointed out that planning application fees have not been increased since 2008, and that the increase was a "one-off adjustment in line with inflation, amounting to around 15% since 2008".

The increase will be introduced this autumn as part of a range of new regulations, in response to what Clark described as a shortfall in fee income being experienced by most councils.

This, he said, caused tax payers to have to subsidise the planning process, something he wants to prevent.

Clark said: "Providing planning departments with the resources that are required to turn round planning applications efficiently and effectively is important. The planning application fee is a relatively small component of the costs of any development, but delays by planning departments in the processing of applications can lead to substantial costs for residents and professional developers."

The CBI speaks for some 240,000 businesses that together employ around a third of the private sector workforce.