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ANNEX B PARTIAL REGULATORY IMPACT ASSESSMENT

The Town and Country Planning (Hierarchy of Developments) (Scotland) Regulations 2007

Draft Regulatory Impact Assessment

1. Title of proposal

The Town and Country Planning (Hierarchy of Developments) (Scotland) Regulations 2007.

2. Purpose and intended effect

Objectives

2.1 The Regulations are required to implement Part 3 of the Planning etc. (Scotland) Act 2006 regarding the new hierarchy of developments.

2.2 The Scottish Government's intention is that there should be a focus of engagement and scrutiny on the more complex development management proposals, while at the same time seeking to streamline and speed up those processes, where possible.

2.3 The hierarchy for planning aims to contribute to ensuring that the planning system is fit for purpose and efficient by introducing a more proportionate approach for handling planning applications to ensure that decisions can be taken quickly and efficiently.

Background

2.4 The White Paper Modernising the Planning System was published in June 2005. It trailed the Government's proposals for modernising the planning system in general and introduced the concept of a hierarchy for planning for different types of development. The White Paper set the context for the Planning etc. (Scotland) Act which received Royal Assent in December 2006, representing the most significant change to the Scottish planning system in over 60 years. The Act sets out the three categories in the hierarchy of development:

• National;
• Major; and
• Local development.

2.5 The Act gives Scottish Ministers power to describe classes of major and local development in regulations.

Rationale for Government intervention

2.6 The hierarchy regulations are largely required by the Planning etc. (Scotland) Act 2006. The expectation among parliamentarians and stakeholders in the planning process was that various detailed matters which arose in course of passage of the bill would be dealt with in secondary legislation. Without these regulations, it would not be clear how the new system would work in practice, and the new system would not be workable.

2.7 Planning performance statistics gathered from local authorities for 2004-2007, provide information on the time taken to determine various categories of development. The statistics show that on average over the three years 61% of all cases were determined in under 2 months with an average of 15% of cases taking over 4 months. When looking specifically at householder developments the figure for cases determined within 2 months increases to 79% and less than 5% take longer than four months. In contrast for the more major developments, applications tended to take longer to determine, for example only an average of 13% of proposals for 10 or more dwellings were determined in under 2 months and on average 62% of such cases took over 4 months. For major business and industry proposals ⁷ it is also evident that they frequently took longer than the statutory 2 month period with only an average of 29% being determined within that timescale and 42% taking more than 4 months.

2.8 The returns clearly show that major developments take longer to determine than more minor or household developments. Delays in the system can lead to lack of certainty for applicants and investors, reduce business confidence, and damage the reputation of the planning system.

2.9 The Government Economic Strategy (November 2007) identifies five Strategic Priorities required to deliver increasing sustainable economic growth. The Strategic Priority relating to Infrastructure Development and Place sets a number of key strategic approaches which the Scottish Government will pursue including " A planning and development regime which is joined up, and combines greater certainty and speed of decision making within a framework geared towards achieving good quality sustainable places and sustainable economic growth." One of the aims of the Act is to identify major developments so that they can be project managed and handled efficiently, in recognition of the aim to increase sustainable economic growth.

2.10 The planning system had become complex and lacking focus, having to deal with the competing demands placed on it from delivering essential infrastructure and promoting investment, to allowing householder improvements. The new hierarchy for the planning system, allows the system to respond proportionately to the different proposals coming before it. Under the new hierarchy proposed developments will be processed and scrutinised depending upon whether they raise issues of national, major, local or minor importance.

2.11 The proposed hierarchy will enable public bodies to prioritise their resources more effectively. It will allow planning authorities to focus on processing applications for major developments which are likely to have significant economic, social or environmental benefits and which may be particularly controversial in the local area. The hierarchy allows decisions on local matters, including any local reviews, to be devolved to the local level. By extending permitted development rights, very minor developments can be removed from the planning application process, thus helping to free up the system.

3. Consultation

Within Government

3.1 The draft regulations have been the subject of discussion and internal consultation on the proposed classes and thresholds within the Planning Directorate, with the Directorate for Planning and Environmental Appeals ( DPEA), , Transport Scotland and Historic Scotland. Various individual points have been discussed with other relevant parts of the Scottish Government.

Public Consultation

3.2 Extensive consultation exercises were carried out in connection with the White Paper. These exercises involved a combination of elements including: direct mailing of the consultation paper to a wide range of public and private bodies and individuals; bilateral and multi-lateral seminars with stakeholders and publication of the consultation paper on the Scottish Government's website to allow for wider awareness and engagement.

3.3 The responses to the White Paper have been analysed and 137 responses made particular points on the planning hierarchy, of which 93% were positive. The general concept of prioritising the treatment of planning applications into the four proposed groups was very strongly supported. There was a general welcome for the proposal, which a number of respondents also felt was particularly innovative.

3.4 Many of those supporting the principle had concerns or questions about some aspects of the operational details and how and who would determine what class in the hierarchy a given development would fall within. The more detailed provisions which are provided in the secondary legislation are aimed at overcoming these issues.

General Views on the Proposed Planning Hierarchy

3.5 There were questions about how the boundaries between the different levels in the hierarchy would be defined and, consequently, where different types of development might be placed. This also included the basis on which the distinction between delegated and non-delegated local development applications would be made. Various potential problems were highlighted in this context - in rural areas relatively small developments (say 10-20 houses) could have a significant local impact, equally the cumulative impact of a large number of small developments could be large and could also constitute a more strategic issue. There were many views that further clarity and refinement was required on the appropriate thresholds - the draft regulations set out to define clear thresholds for the classes in the hierarchy.

3.6 Questions were also asked about who would be responsible for allocating developments to the various categories. In this context, there were queries as to whether the scheme would be essentially national in character and the extent to which there might be local discretion. In defining the classes for major development, Scottish Ministers have sought to adopt clear measurable thresholds to limit the scope for interpretation of the regulations. In addition, Ministers have the power to direct that a particular local development be dealt with as if it were a major development, and there is scope for local authorities to reflect their local circumstances as to the level of cases which they wish to go to committee rather than delegate to officers in their scheme of delegation.

3.7 Some negative comments were received which argued that the hierarchy represented a "considerable centralisation" of power and decision-making in respect of the planning system. However, while Scottish Ministers are seeking to clearly define the classes and thresholds for major development, the purpose of doing so is to free up local capacity to focus on the more complex and significant applications and, importantly, to devolve decision-making including local reviews, to the local level.

3.8 Since the Planning etc. (Scotland) Act 2006 was passed a number of events and meetings have taken place with stakeholders on planning modernisation which have included reference to the hierarchy. These events include a series of regional awareness raising seminars with local authorities, sessions with Homes for Scotland members and with the Scottish Property Federation. In separate meetings with representatives of the Scottish Society of Directors of Planning ( SSDP), COSLA and Homes for Scotland suggestions of the potential levels of major development and the proposed approach to avoid regional variation when setting the thresholds have been raised in discussion and informal views received.

4. Options

Do Nothing

Option 1 (do nothing and remain with the status quo) is not considered viable as the hierarchy and the three types of development are included in the Planning etc (Scotland) Act 2006 which has been approved by the Scottish Parliament.

Options

While the 3 categories of development in the hierarchy are fixed by the 2006 Act, some of the key areas where choices are to be made are in relation to the following areas:

• Number of different classes in each category

Major

The aim has been to keep the Regulations straight forward to interpret and to limit the number of different categories of major development. However in light of their nature certain types of development require thresholds to be set in different ways, for example, renewables in Megawatts, residential in terms of number of units, waste management in terms of tonnes per annum etc. The Schedule of Major Developments includes six classes relating to particular types of development and a class for 'All Other Development'. This approach is proposed to avoid the need to list all the different kinds of development.

Local

It is intended to keep the definition of local developments straight forward by classing them as all remaining developments which are neither national nor major developments, with the former being included in the National Planning Framework and the latter being set out in a Schedule in the Regulations.

• Geographic Variation

There was the option to make different provisions for different areas when describing the classes of major and local developments. However it was felt that this could add complexity and confusion and would be difficult to administer. It is considered that there should be a consistent level for major developments across the country to help ensure widespread understanding of the operation of the system and to ensure consistency in approach.

• Lower thresholds for major development

The lower the threshold for major development, the greater the number of proposals which would be categorised as such. These would all require pre-application consultation with communities, which would have a cost implication for developers, and resource implications for other stakeholders and communities. More cases would be eligible to enter processing agreements which positively could be seen as extending the scope for a project managed approach. Together with the enhanced scrutiny requirements for major developments this could also impact on local authority and consultees resources, and the overall efficiency of the system if the requirements had to be applied to a higher number of applications. Although it is the intention that in revising the Fees Regulations provisions will be made to allow the fees structure to reflect the full cost implications of processing applications. Lower thresholds would mean there would be fewer proposals which could be delegated to officers under s43A of the Act, with an appeal route through to the Local Review Body. This could have a significant impact on local authority Committee time, as well as on the volume of appeal cases going to DPEA, to the detriment of the efficient processing of cases.

• Higher thresholds for major development

If the thresholds were at a relatively higher level, fewer proposals would be categorised as major. This would mean they could be prioritised and effectively project managed with a processing agreement and with local authority planning resources appropriately focussed on them. It would also help statutory consultees to focus and prioritise their input to the cases which are complex or controversial to process and where they can add most value. However a possible issue is that the efficiency benefits, which processing agreements can offer, would be limited to a smaller number of applications.

On the cost side, the intention is that developments will have to pay increased fees for planning applications to reflect the full cost implications of assessing their impacts.

With higher thresholds for major, more developments would correspondingly be classed as local. This means there is the potential for more cases to be handled under a section 43A scheme of delegation. Applicants unsatisfied with a decision delegated in such a manner would have a right of recourse to a Local Review Body rather than Scottish Ministers. This could benefit authorities in helping to focus member's time on major developments, and also DPEA and the resources of reporters. Freeing up capacity in DPEA could also bring benefits for other parts of the planning system by allowing reporters to work on development plan examinations, helping to ensuring there is an up-to-date plan led system in Scotland, to provide a framework for investment decisions.

Other proposals include a requirement on applicants for major developments to carry out pre-application consultation in advance of submitting the planning application. There will be some costs for developers associated with pre-application consultation for example providing information for the community, hiring a venue, facilities to meet the community and to prepare a report on that pre-application consultation. However, fewer major developments would mean fewer cases requiring pre-application consultation, which may reduce the scope for consultation fatigue within local communities as well as reducing costs for applicants.

5. Costs and benefits

Sectors and groups affected

General

5.1 As discussed above, the categorisation of developments in the hierarchy links to different ways of processing applications, eligibility for processing agreements, requirements for pre-application consultation, a range of enhanced scrutiny provisions and the involvement of Local Review Bodies. The impacts of these related proposals will be discussed in further detail in separate consultations. This partial RIA focuses on the impact of the categorisation of developments in the hierarchy.

Business

5.2 A number of businesses and business representative bodies responded to the White Paper hierarchy proposals. The analysis of responses to the White Paper indicates that generally there were no negative views on the hierarchy from the business community. A selection of extracts from the responses is below:

• CBI Scotland: 'The proposed planning hierarchy is a sensible step. Clarifying what projects are likely to fall within each level should be a priority.'
• Federation of Small Businesses: 'The FSB welcomes the principle of a planning hierarchy. There is an obvious need for clarity on the definition of 'major' and 'local' developments. The White Paper suggests that this will be done via subordinate legislation but this must be open to debate and subject to consultation. It seems clear that 'national' developments will be only those projects of a strategic nature, outlined in the new National Planning Framework, however this definition must also be tightened up.'
• Institute of Directors: 'A logical hierarchy of planning - national and local is welcome - sometimes the national interest is paramount. We very much welcome the higher level decision making process for national level projects.'
• Homes for Scotland: 'In principle, the proposed new hierarchy is a significant step forward but Homes for Scotland's view is that the distinction between national, major and local developments as set out in the White Paper is not sufficiently clear. It is likely that residential development proposals will straddle both the major and local categories, although we assume that the majority of new housing developments will fall in the major category. There is a need therefore for greater clarity and clearer definitions from the Executive and advice on the scale of developments and the cut-offs between the different categories. Homes for Scotland would be willing to work with the Executive on the detailed application of this change as it affects residential development.'

Public Sector

5.3 21 out of the 22 planning authorities who responded to the White Paper in relation to the hierarchy had positive views about the hierarchy. A number of Non Departmental Public Bodies who regularly have a role as statutory consultees on planning applications also responded to the consultation on the White Paper. They generally these welcomed the proposals for the hierarchy, to differentiate planning applications in relation to their scale and impact and having proportionate measures for assessment and determination. Clarification was sought on the thresholds distinguishing between different levels in the hierarchy.

Voluntary

5.4 78% of responses to the White Paper from the voluntary sector had positive views about the hierarchy. Unless they are involved as applicants, the categorisation of the developments in the hierarchy is itself likely to have a minimal impact on voluntary bodies. Where they are applicants, voluntary bodies are more likely to be promoting local or even minor developments which will, in due course, be removed from planning control. If local developments are being promoted, there will be benefits to efficient processing of cases, through increased delegation to local officers. Voluntary bodies may also be involved in the planning process by providing representations on planning applications for different developments which fall within each of the hierarchy categories.

6. Small / Micro Firms Impact Test

6.1 The main impact of the Regulations will be on those who frequently deal with the planning system. We expect this group to include medium to large businesses, particularly property developers and businesses carrying out major expansions in areas such as the retailing and service sectors, though small family building firms and self-employed architects and agents will also fall into this group.

6.2 Typically, most small and micro businesses will only occasionally deal with the planning system, and all small businesses should benefit from our proposed move to remove minor developments from planning control. Smaller and micro businesses will typically not be embarking on major developments, although where they do, they will be required to pay the higher fees that we propose to introduce for major developments.

7. Legal Aid Impact Test

7.1 These Regulations do not create new rights or responsibilities that could give rise to increased use of legal processes. The regulations will not impact on an individual's right of access to justice through availability of legal aid.

8. Competition Assessment

8.1 The hierarchy should not limit the ability of operators of different types of business to compete, as decision makers will have to consider the overall impacts of a proposed development regardless of where it sits in the hierarchy. In addition, the aim of releasing capacity to focus on major developments will provide greater clarity and certainty on timescales which may help businesses receive a decision on a planning application faster which could allow them to build their schemes and establish their businesses more quickly than at present. As discussed above, business interests over a certain scale will be subject to the requirement for pre-application consultation with the community, higher fees for planning applications and possibly other stages of enhanced scrutiny.

9. Enforcement, sanctions and monitoring

9.1 We will be monitoring the way planning authorities implement the changes resulting from the Planning etc. (Scotland) Act 2006 and the secondary legislation stemming from it including the Town and Country Planning (Hierarchy of Developments) (Scotland) Regulations 2007. This will form part of our overall monitoring of authorities' performance which is already carried out by the Planning Directorate of the Scottish Government. Section 30 of the 2006 Act gives Scottish Ministers powers to conduct, or appoint a person to conduct on their behalf an assessment of the planning authority's performance of functions under the planning Acts. There will also be scope to amend the classes or thresholds at a later date if necessary, to ensure the efficient operation of the system.

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