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Tribal HCH

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Tribal HCH was commissioned by the Scottish Executive to carry out research on the impact of the planning system on business. The study assesses how well founded the criticisms of the planning system by business are. It presents evidence about the nature, type and extent of problems, and makes recommendations to address them.

Main Findings

• Business and Wealth Creation: The planning system is generally highly supportive of major mobile investment projects and applications which are seen as economic development projects. It is less supportive of development proposals promoted by housebuilders and minerals operators. Unpredictability of outcome is perhaps the most significant impact on these categories of developer.
• Planning and Infrastructure: The lack of co-ordination between infrastructure investment and planning and the lack of clarity about current capacity and requirements to fund infrastructure are major issues for business. Statutory development plans need the active engagement of those who plan transport and drainage infrastructure. The system of defining developer contributions and negotiating them using Section 75 agreements needs to be streamlined.
• The Changing Caseload: There may be a link between the very substantial increases in householder applications in recent years and the decline in the performance of planning authorities in dealing with major applications.
• Performance Targets: The data on performance against two, three and even four month targets do not present a complete picture of trends in the average length of time taken to achieve a consent for major developments, which our case studies suggested was likely to be well above 30 weeks.
• Progressing Major Applications: More active management is needed to ensure that major applications progress through the system as quickly as possible. A number of areas of good practice were identified which provide businesses with greater certainty about outcome and the timing of decisions.
• Monitoring the Impact on the Housing Market: Systems are needed to track the relationship between the output of houses of various types and prices for those house types in each local authority area.
• Rural Issues: Rural business respondents expressed concern about a number of issues including the impact of the shortage of affordable housing on labour supply. Drainage capacity was seen as a key issue.
• Morale and Staffing: Business respondents consider that there is a need to take action to make the local authority planning sector more attractive to high-quality entrants.

Summary

The planning system is highly supportive of business proposals which involve 'footloose' mobile employment or are seen as economic development proposals. However, lack of drainage infrastructure has been a constraint on the development of new sites for business in Glasgow and the West of Scotland. Measures have been taken to address these issues, but concerns remain that they may not be adequate.

Within the business sector, the greatest concern about the impact of the system has been expressed by housebuilders and mineral operators - the sectors which engage most regularly with the planning system. There is no clear evidence to show what the impact has been on minerals output, but market evidence suggests that the supply of housing is not keeping up with demand in parts of Scotland.

The number of major planning applications has been fairly stable over the past five years but over the same period the number of householder applications has risen by 50%. Performance in dealing with householder applications has been maintained despite this sharp increase, whereas the proportion of major applications dealt with within three months has fallen significantly.

The researchers believe that the growing use of Section 75 agreements - evident in the planning returns but almost certainly considerably under-reported - is an important factor in declining performance with regard to major applications. The number of applications notified to Scottish Ministers has also risen very sharply. While the Executive has maintained its performance in dealing with such applications, notification tends to lengthen the time taken to determine the application. Appeal cases have fallen fairly substantially in recent years, and the performance of the Scottish Executive Inquiry Reporters Unit has improved.

Local authority case studies suggest that when the average overall time taken to make a decision on a major application is analysed - arguably the most important issue for developers - there was relatively little difference in performance between the case study authorities, even although their performance against the three month target was often very different. On average, major applications were taking between 28 and 37 weeks to determine, but certain simplifying assumptions made in the analysis mean that these figures underestimate the true decision time.

Analysis of selected planning applications which had remained undetermined for a long period showed that the behaviour of planning authorities was not the only reason for delay - a high proportion of applications were delayed because the applicant failed or was slow to supply necessary information. Perhaps the next most common cause of substantial delays was the negotiation of Section 75 agreements, which resulted in an average delay of 10 months. The selected cases which involved a Section 75 agreement had an average time from Committee to final decision letter ranging from 55 weeks in the fastest authority to 104 weeks in the slowest.

Housebuilders saw the system as increasingly sclerotic, burdened by new demands, short of experienced staff and in some cases unable to respond appropriately to requests for the pre-application discussions which might help to ensure that major applications, once submitted, progress smoothly through the system.

Business applicants recognised problems of rising workload, staff shortages, and low morale in planning departments, but identified poor management and a negative attitude to development in some authorities.

The three issues which have greatly increased the complexity of the planning system are the increased importance of engagement with development plans, environmental assessment and the substantial growth in the importance and complexity of planning gain negotiations, particularly in growth areas and in rural areas where there is an increasing expectation that many aspects of infrastructure and affordable housing will be funded in this way. House builders spoke of a 'crisis in the provision of infrastructure'.

Rural business interests indicated concern about the shortfall of affordable housing and its impact on labour supply. They saw drainage constraints as a particularly serious limitation on development.

Bodies representing minerals operators expressed the view that it was increasingly difficult to secure consent for any type of mineral application and that there was a lack of expertise in dealing with minerals applications on the part of some planning authorities.

Two recent surveys of the experiences of small and medium-sized enterprises ( SMEs) in dealing with planning and other regulatory services suggested that the majority of respondents were satisfied with the service they received, despite some loss of earnings as a result of involvement. Roughly 60% considered the legislation was necessary, despite its impact on business.

Recommendations

The key recommendations relate to the provision of infrastructure and the streamlining of Section 75 agreements. We recommend:

• The local plan should have a delivery strategy, setting out the overall need for infrastructure investment and affordable housing in the wider area, making explicit the size and types of contributions likely to be sought for specific local plan sites and also for any windfall sites.
• Planning authorities should have previously established in the development plan preparation stage the detailed infrastructure requirements of the locality and the extent to which they and other public sector agencies will contribute toward infrastructure provision.
• a mechanism - probably a public sector rolling infrastructure fund - should be established to finance and facilitate initial investment in major infrastructure of benefit to several developers.
• Formulae and standard tariffs or charges will help to speed negotiations and promote transparency.
• Standard agreements and model clauses should be prepared for Section 75 agreements.
• Planning authorities need more specialist expertise in dealing with major applications and negotiating Section 75 agreements.
• Developers should be offered the option of a formalised pre-application discussion stage. A fee would be payable for this service, which would include full consultation and neighbour notification to ensure that all relevant issues were identified.
• Measures should be introduced to make the system more 'business friendly' - eg. by providing business applicants with a named point of contact and a target date for a decision on the application.
• There should be no requirement for the promoters of business developments to make contributions towards affordable housing, education, or other social infrastructure where the proposed development does not include housing.
• There should be a detailed review of the nature and type of householder applications and permitted development, with the overall objective of reducing the number of applications and streamlining the system.
• The Executive should set a new target relating to the average period of time taken to deal with major applications.
• There should be more active management of the progress of major planning applications.
• Build rates and price and affordability trends for a range of house sizes and types should be monitored annually at local authority level.
• The Scottish Executive should consider measures to make local authority planning more attractive to high quality entrants.

About this Study

The study was undertaken by Tribal HCH between December 2004 and April 2005. It included:

• A literature review;
• further analysis of the SEDD planning applications returns dataset;
• four detailed local authority case studies, focused on delayed applications; and

• a series of stakeholder interviews with organisations representing Scottish business, key professional bodies, developers and housebuilders.
• While the research focused on the concerns of business, it took into account the fact that there are also valid community and environmental interests to be considered.

If you wish further copies of this Research Findings or have any enquiries about social research, please contact us at:

Tel: 0131 244-7565
Fax: 0131 244-7573

Email: socialresearch@scotland.gsi.gov.uk
Website: www.scotland.gov.uk/socialresearch

If you wish a copy of "Business Development and the Planning System" the research report which is summarised in this research finding, please send a cheque for £5.00 made payable to:

Tel: 0131 622 8283 / 0131 622 8258
Fax: 0131 622 8258
Email: business.edinburgh@blackwell.co.uk

This document (and other Research Findings and Reports) and information about social research in the Scottish Executive may be viewed on the Internet at: http://www.scotland.gov.uk/socialresearch

The site carries up-to-date information about social and policy research commissioned and published on behalf of the Scottish Executive. Subjects covered include transport, housing, social inclusion, rural affairs, children and young people, education, social work, community care, local government, civil justice, crime and criminal justice, regeneration, planning and women's issues. The site also allows access to information about the Scottish Household Survey.