Legal Briefing

Delivery of housing land: the Scottish perspective

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Real estate | 01 May 2015

‘Housing crisis’ is a frequent headline. That may be hyperbole, but the need for housing is an important issue for business: many work in the housing market; all have employees with housing needs.

Delivery of land for new housing is a key component in addressing housing need. The planning system plays a significant role, because planning permission is required for new houses to be built.

Scotland has a separate planning system from England and Wales, with different legislation and policy. Although many procedures are similar, there are important differences. For example, there is no community infrastructure levy (CIL) 
in Scotland.

The Scottish Government

In Scotland’s Third National Planning Framework (published in June 2014), the Scottish Government acknowledged the scale of housing need, claiming:

‘In the coming years, we want to see a significant increase in house building to ensure housing requirements are met across the country’.

It has taken the unprecedented step of intervening in eight planning appeals, to ensure that decisions will be made by Scottish ministers, rather than being delegated to their planning reporters (the Scottish equivalent of inspectors). The reason given was:

‘Ministers consider the delivery of appropriate housing developments, particularly in growth areas, and in accordance with the recently issued Scottish Planning Policy, to be an issue of national significance’.

Two of those appeals have since been upheld by Scottish ministers.

The ‘big picture’

There have been a series of reports identifying potential solutions for the ‘big picture’. Recommendations included:

  • RICS Scottish Housing Commission (July 2014) – setting up a Scottish Land Delivery Agency (SLDA), and six to eight major new communities.
  • Land Reform Review Group (May 2014) – establishing a Housing Land Corporation.
  • Audit Scotland (July 2013) – the Scottish Government should review the financial pressure on the sector, including its ability to meet the national targets and quality standards, and councils’ and Registered Social Landlords’ (RSL) capacity to develop alternative models of finance, and assess the implications for funding for new homes.

Discussion paper

My recent discussion paper identified scope for other changes, especially to planning procedures. Although most of these changes focus on the role of the local authorities, there is also scope for developers to improve their approaches.

Infrastructure capacity

Infrastructure capacity is recognised to be a problem. In the 2014 Planning Framework, the Scottish Government identified that:

‘In some of our city regions, infrastructure capacity is limiting the delivery of new housing and other development. We expect to see more concerted efforts – involving planning authorities, developers, government agencies and infrastructure providers – to remove those constraints.’

As part of those efforts, the Scottish Government recently announced that Ryden, with WSP and Brodies, have been appointed to undertake the Planning for Infrastructure research project, which has now commenced.

The development industry is now accustomed to the need to pay financial contributions towards necessary infrastructure, such as roads and schools (although there is some controversy about the planning system being used to require payments for wider infrastructure such as healthcare).

Many local authorities could reduce delays by improving their internal management processes for obtaining information and costings for infrastructure upgrades from their transportation and education departments (anecdotal evidence is that education departments are often very slow).

Could there be more flexibility in the timing of new infrastructure? Capacity assessments tend to be broad-brush estimates. Often local authorities let existing capacity problems continue for many years, but expect developers to provide new infrastructure on-time. Phasing can make a significant difference to the viability of development.

The supply of sites

As in England and Wales, Scotland has a plan-led system which takes a ‘predict and provide’ style approach: preparation of the development plan involves predicting how much housing is required and then identifying the specific sites to meet that need.

This approach is very time consuming. Reforms introduced in 2009 have sped up the plan-making process. The Scottish Government estimates it takes 30 months, but there are frequently delays. For example, the City of Edinburgh Council published a Main Issues Report in October 2011 and currently estimates the plan will be adopted in February 2016, although even that is unlikely.

The focus on selecting specific sites creates winners and losers; it also creates competition between developers/sites, which adds to the workload of the officers preparing the plan. Would plan-making be quicker if more sites were identified but given a less definite status?

Confusingly for those used to zoning systems in other European countries, sites identified in the plan still need to go through the same planning application procedure as ‘windfall’ sites (those not in the plan).

The planning system needs to make up 
its mind: less scrutiny/more speed at the plan-making stage, or at the planning application stage? For example, consideration could be given to creating a Simplified Planning Zone style concept, to cut bureaucracy for housing sites already approved in the plan.

Delivering large sites

Local authority planning departments need to focus on delivering sites, not just identifying them in plans. There has been a change in culture from development control to development management, but what about development promotion? That’s often seen as the developer’s job, but that perpetuates a ‘them and us’ culture, rather than joint enterprise.

There is often a project management role for the local authority planning officer in delivering large sites, where multiple ownerships can cause delays, especially when some interests are in more of a hurry to make progress than others.

A delivery focus also identifies difficulties at an early stage. The right questions need to be asked: not just who will pay for the new road, but how to ensure the money is available at the time the road needs to be built. If the land for the road is in multiple ownership, might the local authority have to use compulsory purchase powers to ensure it can be delivered at the right time?

Cutting red tape

Ironically the planning reforms in 2009 made the planning system more complicated, especially with the introduction of local review bodies, which creates two different planning permission appeal procedures.

A particular concern is the amount of red tape that still has to be navigated after planning permission has been granted.

Attention should be given to:

  • The amount of information which planning permission conditions require to be submitted for approval – these conditions have become ubiquitous in recent years.
  • Inevitably, fine-tuning of designs requires approval, but there is uncertainty about when a change is ‘non material’ and does not require a formal planning application.
  • The overzealous approach being taken by some planning authorities to uncertainties regarding the interpretation of the statutory provisions on time limits for commencement of development, and submission of matters for approval.

Closing comments

  • Strategy: housing has to be delivered, in the short, medium and long term; stakeholders need to ensure that a strategy to make that happen is adopted.
  • Culture: planning authorities should focus on delivery of development, not just identifying sites.
  • Leadership: councillors need to lead from the front, make what are sometimes hard/unpopular decisions, and support their planners.
  • Confidence: the planning system is based on exercise of judgment, so planners need to be confident and get on with making decisions, and not be distracted by ifs, buts and maybes.
  • Information overload/gold-plating: a related point; there needs to be confidence to make the decision without requesting more and more information, which causes delay twice over, because the information needs to be prepared and then once it has been submitted, the planning officer needs to review it.
  • Resourcing: planning authorities need proper financial resourcing.
  • Internal management: local authority departments need to work together, and planning officers need to be project managers to ensure internal responses are not delayed. Issues need to be identified early in the process, not drip-fed months afterwards.

This article is based on a discussion 
paper which can be downloaded from: 
http://www.brodies.com/knowledge-bank/legal-updates/discussion-paper-delivery-of-housing-land