The Scottish elections in May will take place against the backdrop of a struggling property industry. Six years ago the then First Minister of Scotland, Jack McConnell, announced "The Executive's top priority is promoting sustainable economic growth to create a modern and vibrant Scotland. A modern, up-to-date planning system is critical to achieving that objective. Sustainable growth requires development and the role of planning is to ensure that this development is encouraged and managed in a sustainable way".
According to McConnell, the Government's proposals (and subsequent legislation), would "improve the efficiency of the planning system to allow the investment we need to grow the economy and create jobs and opportunities for all". Has the radical overhaul of the planning system delivered what was promised actually delivered, and what does the future hold?
At the heart of the planning reforms was a desire to give communities the opportunity to comment on major development proposals before a planning application was submitted. However, concerns have been expressed about the extent of pre-application consultation.
Scottish planning legislation requires a minimum 12-week consultation, which can be disproportionate to the level of community interest. Many in the development community had embraced pre-application consultation long before it became mandatory, seeing the potential for benefit in getting communities on board early . However, it is questionable whether a full three months is required in all cases and whether the planning authority should not be given more discretion to shorten the period appropriately. 12 weeks can be problematic in situations where the developer is under pressure to secure planning permission within a fixed contractual period or to satisfy funder requirements. This is particularly so given that the pre-application consultation process does not seem to have done anything to speed up decision making once applications are actually submitted.
The Scottish Government clearly recognised that major applications needed to be prioritised. It was decided that a target of four months should be set for determining major planning applications and that planning authorities could enter into processing agreements with developers to facilitate speedy determination.
Recent figures published by Scottish Government appear to demonstrate little appetite for formal processing agreements with only around 1% of all major applications determined in the first year of the new system being subject to such an agreement.
Perhaps even more worrying are the statistics on the timescales for determining major applications. In 2006/7 around 55,000 planning applications were determined in Scotland as a whole. 76% of those applications were determined within three months of submission. By 2009/10 the total number of applications had fallen to around 40,000. From August 2009 until March 2010 only 27% of major applications were determined within four months. The most recent statistics for the period to September 2010 suggest that less than 40% of all major applications are being determined within the four month target period.
Developers have found this deeply frustrating, particularly when so much up front work, such as community consultation, or discussion with planners, has been done. The reality in many cases is that planning authorities do not have the resources to determine significant complex applications quickly. Over the last 18 months, we have seen many experienced local authority planners take early retirement or voluntary redundancy as Councils have sought to cope with the budgetary difficulties caused by the current economic climate.
Lack of flexibility
Planning gain requirements in Scotland are typically secured through legal agreements under Section 75 of the Planning Act 1997. The recent legal reforms sought to bring the Scottish system more into line with the rest of the UK by providing an opportunity for developers to enter into unilateral obligations and also to apply to the planning authority to vary or discharge existing Section 75 Agreements and to appeal a refusal of such an application.
However, the Scottish legislation is inflexible and means that local authorities can only vary or discharge planning gain obligations through a formal application process. In dealing with an application, they can only approve or reject the application, with no scope for a degree of compromise if the developer and the planners differ slightly in their aspirations. In those circumstances, the developer’s only opportunity to secure variation of the obligations is to run the risk of an appeal or to withdraw and resubmit the application.
If the Government is serious about kick starting consented developments, it must adopt a more flexible approach on the re-negotiation of planning obligations. It cannot be in anyone's interests for developers to be required to propose modifications through formal applications on an "all or nothing" basis and there must be flexibility to allow compromise during the negotiations with the planning authority on what form of modification would be acceptable. If we don't have that, there is a very real risk that process rather than substance may delay the development of good proposals.
A developer has planning permission for a housing development of more than 50 houses units but because of viability considerations it wants to phase the build. It will therefore not able to implement the permission in exactly the way that was anticipated, and conditions attached to the original planning permission may have to be changed.
Under the current arrangements, the developer would probably have to undertake a three month pre-application consultation before the planning authority could entertain its application. Given that the principle of the housing development has not changed, and the alterations are limited, it is unlikely that those consulted can enhance the application process.
It is likely that in it’s first term, the Scottish Parliament will consider legislation to amend the pre-application requirements which in some cases have proved disproportionate and inflexible.
Many in the development community would like to see a short minimum period with planning authorities retaining the flexibility to extend on a case-by-case basis if circumstances justified it. This is particularly important in the case of applications to modify developments for which have planning permission in place alreadywhere community interest may be limited.
Much has been said recently about the re-introduction of enterprise zones. Most welcome the news although the Institution of Chartered Accountants in Scotland does not believe that they will creating jobs. It argument that, based on experience of the 1980s, only 20% of the jobs which were created in enterprise zones were new, the rest were displaced from elsewhere.
It is unclear to what extent the jobs figures take into account construction jobs as well as end users of the buildings. What is clear is that Scotland needs a continuing stream of construction projects to maintain the existing workforce and, to that end, measures which encourage development must be welcomed.
The most basic, and complex, issue facing the next Scottish Parliament will be resources. In 2010, it undertook a consultation, which posed 25 questions seeking views on how best to resource a high quality planning system. Much of that discussion focused on fees charged for processing applications; 69% of respondents supporting the idea of raising the maximum fee. Half of all the respondents were opposed to this increase. Options included time-charging by planning authorities, phased payments and linking fees to value.
The Government's decision on planning fees could have a profound effect on an already fragile development industry and a local authority planning sector that, in many cases, does not now have the resources to cope with the reduced number of planning applications that it is facing: set fees too low and risk continued under-performance; set them too high and applicants may be discouraged by additional costs.
Whether the issue is flexibility or fees, the Scottish Government's decisions over the coming few months on what further changes to the planning system are required to kick-start the economy will be felt for years to come.