« Previous | Contents | Next »
Listen
PARTIAL REGULATORY IMPACT ASSESSMENT FOR SPP3
1 Title of proposal
1.1 Revision of Scottish Planning Policy 3 - Planning for Housing ( SPP3)
2 Purpose and intended effect
Objectives
2.1 The revision of SPP3 is intended to address shortcomings with the effectiveness of the existing SPP3. These relate principally to the provision of suitable land for housing and the delivery of housing to meet identified need, neither of which are being achieved as was intended with the introduction of SPP3. The revision of SPP3 will bring together various planning and housing documents to provide comprehensive guidance on the provision of land for housing and the subsequent delivery of that housing.
2.2 The review of SPP3 will examine particular core principles:
- ways in which the link between assessed housing demand and need and development planning and its implementation can be strengthened and broadened. Currently there is insufficient integration between local housing strategies and development plans, and the review will seek to address this, as well as links with the community planning process. There is a need for a more consistent approach to assessments of housing requirements based on a clear process and an improved methodology;
- greater clarity on the link between identified housing requirements and the release of land to meet these. In areas where there are particular pressures on housing supply, quicker release of land for housing and promoting the more effective use of existing housing land allocations are two mechanisms that the review will consider. Additionally, the review will consider how SPP3 could be used in certain circumstances to bring forward new housing land supply in pressured areas, and to respond more flexibly to market changes;
- the provision of more affordable housing, including an improved mix of tenures. The review will seek to strengthen affordable housing policy and refer specifically to guidance in Planning Advice Note 74: Affordable Housing ( PAN 74), which suggests a benchmark of 25% of the total number of housing units on each site in areas of need should be affordable housing units;
- improvements in the quality and design of housing generally, including affordable housing,, particularly around energy efficiency;
- take account of recent changes to the planning system in Scotland; and
- revised guidance on Houses in Multiple Occupation.
Background
2.3 SPP3 was published originally in February 2003 and provides direction to planning authorities on the provision of sufficient land for housing in the right places through the planning system, and on related qualitative issues such as housing design and layout, density, open spaces, provision, energy efficiency and the creation of mixed communities. In November 2006, during the passage of the Planning etc. (Scotland) bill, the Minister for Communities announced a review of SPP3, with the aim of placing greater emphasis on the generous release of land for housing in local authority development plans. This was in response to indications that SPP3 was not operating as effectively as hoped in this regard. SPP3 sets out that the planning system should provide for sufficient land for housing to meet assessed needs, but stakeholders in local government, housing associations and the development industry have indicated that the absence of an adequate land supply is a major impediment to the provision of new housing in Scotland. The review was welcomed by stakeholders. An initial meeting of key stakeholders was held in February 2007, after which the review was postponed until after the Scottish elections. The current administration has indicated its support for the review.
Rationale for government intervention
2.4 SPP3 was intended to provide an effective supply of land for housing to meet identified needs, and to deliver that housing in quality developments. The continuing shortfall of land for housing and the slow rate of delivery of housing, particularly affordable housing, illustrates that SPP3 has not achieved its intended effect sufficiently. Failure to address this situation is likely to see increased pressure on the housing market and an increase in the number of people who are unable to afford appropriate housing.
2.5 Recent research has highlighted a variety of pressures in the Scottish housing market. The Scottish Housing Market Review: Evidence and Analysis 2007 indicates dramatic rises in house prices between 2002 and June 2007, and estimates that price levels were, at publication, 31% above their historic trend. It notes further that recent price increases have not been met with any significant response in the supply of new houses. Mix-adjusted house prices grew by 72% between 2002 and 2006, while private sector new build completions have increased by only 2%.
2.6 This situation has a number of negative consequences for individuals with aspirations of home ownership, for the wider economy, as well as social justice. Excessive house-price inflation distorts tenure choice, limits labour mobility, reduces Scotland's economic competitiveness and skews wealth towards the top of the housing ladder.
2.7 Firm Foundations: The Future of Housing in Scotland confirms the importance The Scottish Government attaches to housing supply, stating that 'An adequate supply of decent housing at prices people can afford is essential for the health and well-being of individuals and communities. It is also a key foundation for the sustainable economic growth necessary to deliver a wealthier, fairer society'. Firm Foundations proposes a national goal of 35,000 new houses per year by the middle of the next decade, and challenges Scotland's local authorities, developers and builders to meet this. Local authorities are encouraged to discharge their role in meeting that challenge by co-operating at a regional level to set and meet realistic housing supply targets through their local housing strategies.
2.8 The revised SPP3 should go some way to addressing the pressures discussed in both the Scottish Housing Market Review and Firm Foundations.
2.9 The reforms to the planning system introduced in the Planning etc. (Scotland) Act 2006 will improve the equity and efficiency of the development planning process and emphasise its role in the effective identification and provision of infrastructure, including housing, for continued sustainable development. Under these reforms, planning authorities will be required to set out action programmes specifying how land allocated in development plans will be delivered. However, interim solutions are required until the provisions of the Planning Act are fully implemented, and a revised SPP3 is an appropriate mechanism for this purpose, as well as supporting the implementation of reforms.
3 Consultation
Within government
3.1 The following government departments have been invited to contribute to the consultation process: Historic Scotland; the Scottish Environmental Protection Agency; Scottish Natural Heritage; Transport Scotland; General Register Office for Scotland; Scottish Building Standards Agency; and the Directorate of Planning and Environmental and Planning Appeals. In addition, the following parts of The Scottish Government have been invited to participate: Planning Directorate; Housing and Regeneration Directorate; Land and Property Division; and Rural Directorate.
Public consultation
3.2 All Scottish local authorities have been invited to participate, as will the Loch Lomond and the Trossachs National Park Authority and the Cairngorms National Park Authority, both of which are the planning authorities for those areas. The house building industry, including housing associations, will be invited to respond to the consultation. We will also seek to involve organisations who are able to respond on the environmental effects likely to be brought about by the revised SPP3, as well as equalities groups.
3.3 A full list of participants will be published in the final RIA after the consultation process is complete.
4 Options
(i) Do nothing
4.1 Without the revision of SPP3, the situation would remain as it is, with the delivery of new housing continuing to fail to meet need and demand. The purpose of the existing SPP3 is to encourage the delivery of the right kind of housing in the right places, but this has not been achieved in the four years since SPP3 was published, and is unlikely to be so without revision. The stated objectives have demonstrably not been achieved by this option over the past three years.
(ii) Improved application of existing SPP3
4.2 There is some scope for the existing SPP3 to remain, but with greater application of its provisions. This would require local authorities and developers to be more stringent in their interpretation of SPP3 and in how it influences their policies on land for housing. It is unlikely that this approach would have the desired effect. There is substantial evidence to suggest that SPP3 is not having the intended effect, which would not be reversed by improved application of its provisions. Furthermore, reforms to the planning system brought about by the Planning etc. (Scotland) Act 2006, as well as new policy directions in housing (as set out by Firm Foundations, as well as the Strategic Housing Need and Market Assessment guidance) should be reflected by SPP3, which can also provide suitable transitional arrangements between the current system and the new system. This would not be possible with the existing SPP3 and so is not considered further. The costs and benefits identified in section 5 focus on a comparison between options (i) - 'do nothing' - and (iii) - 'complete revision'.
(iii) Complete revision of SPP3
4.3 The proposed revision of SPP3 will provide comprehensive guidance that relates to the assessment of housing needs, the identification of suitable land availability and the delivery of the right houses in the right places as an integrated process in a way that the current SPP3 does not. Importantly, the revised SPP3 will follow a process-based approach, which should provide clarity about the procedures that local authorities and developers ought to follow. This will take account of a range of guidance and advice relating to both the planning system and housing, and will encourage local authorities and developers to consider this material in conjunction with SPP3. This should promote a more inclusive and methodical approach to planning for housing, drawing on a suite of relevant guidance and advice as required. The revised SPP3 will also refer to, and take account of, other complementary work being undertaken by The Scottish Government, including the Housing Supply Task Force, the Strategic Housing Need and Market Assessment guidance and Firm Foundations. Additionally, the revised SPP3 will include guidance to other elements of planning and housing as annexes, including guidance on Houses in Multiple Occupation ( HMOs) and housing land audits (currently provided by PAN 38). This will create a suite of related guidance on this and related topics, and will help to ensure that the revised SPP3 is relevant to the new planning system.
5 Costs and benefits
Sectors and groups affected
5.1 SPP3 provides guidance on the allocation of land for housing, and will help to facilitate the quick delivery of that housing. As such, the majority of people in Scotland will be affected by this policy either directly or indirectly. The creation of new housing which will be brought about through the revised SPP3 is likely to have long-term effects on the Scottish economy and increasing the number of houses being built should lead to reduced pressure on the Scottish housing market. This will have a positive effect on people who are struggling to find affordable housing, as well as those who are able to afford housing, but not that to which they aspire. There may be negative impacts on some householders who are affected by restrained price growth (particularly those who would, for whatever reason, sell a property without buying another). The effects of the revised SPP3 are likely to affect everyone in Scotland in some way. For example, even those people who are not affected by house prices or housing availability directly, might feel they are affected negatively by increased development.
5.2 The effects of a revised SPP3 are likely to be felt most immediately by planning authorities. Revised guidance will place greater burdens on planning authorities in terms of the preparation of plans. Planning authorities will be affected particularly by new requirements around development plans, a central part of which will be the availability of sustainable, effective sites to meet need and demand for new housing. They will be further affected by guidance in the revised SPP3 relating to the assessment of housing requirements, which will advise that a range of factors, such as GROS statistics, local forecasting and local housing strategies, should be considered for this purpose. The revised SPP3 will also provide guidance that planning authorities should undertake greater monitoring of land supply and housing land audits, which, again, will be an additional burden.
5.3 The revised SPP3 will also affect house developers by bringing about greater release of land for housing, and providing mechanisms for more stringent monitoring of the delivery of housing. Developers will thus be required to deliver the housing identified by local authority development plans.
Benefits
5.4 This section identifies the benefits of the complete revision of SPP3, setting out which groups of people will benefit and how. It has not been possible to quantify the precise benefits at this stage, and it would be extremely difficult to attribute benefits to the revised SPP3 rather than the many other factors which influence the planning system. The revised SPP3 will provide a range of benefits, many of which will address specific problems in the housing market. Recent house price growth has had a number of negative consequences, including restricting the ability of those with aspirations of home ownership to achieve them. Excessive house-price inflation also limits labour mobility, reduces Scotland's economic competitiveness and skews wealth towards the top of the housing ladder.
Increased housing supply
5.5 General Register Office for Scotland ( GROS) projections suggest that the number of households will increase by 13% to 2.5 million between 2004 and 2024, an average of 14,800 additional households per year. Increased numbers of households would not necessarily be a problem if an adequate housing supply response was likely. However, recent years have seen significant increase in Scottish house prices with little evidence of an adequate supply response. The Scottish Housing Market Review concluded that '[t]here seem to be serious barriers in the Scottish housing market, which has implications not only for those struggling to become home owners but the competitiveness of the wider Scottish economy too'. Some of these questions are addressed by Firm Foundations, The Scottish Government's discussion document on the future of housing in Scotland, which acknowledges that the housing market has struggled to respond to demand. The Scottish Government has set a target of 35,000 new houses per year by the middle of the next decade (10,000 per year higher than at present). Firm Foundations identifies the role the planning system can play in creating a more responsive housing system.
5.6 The revised SPP3 will play a central role in addressing these issues, particularly in the short and medium-terms. It provides guidance on improved identification of housing needs, drawing on a range of data and sources, as well as encouraging the swifter release of land to meet identified needs. Links will be made with the Strategic Housing Need and Market Assessment guidance, currently being prepared by The Scottish Government Housing and Regeneration Directorate. This will underscore the need for planning authorities to develop local housing strategies based on sound assessments of a range of considerations. The overall effect of this will be to help bring about faster delivery of the right type of housing in the right places, thus relieving some of the existing pressure on the housing market. An increase in the number of houses built each year is likely to have an effect on house prices and affordability.
5.7 The revised SPP3 is likely to reduce the length of time taken for the granting of planning permission, as well as a reduction of delays caused by appeals (which should be reduced as a result of improved development plans). Under the existing system, delays in the granting of planning permission can have high costs for house builders and can be a particular obstacle to the delivery of housing.
Affordable housing
5.8 In addition to the benefits the revised SPP3 will bring to the housing market generally, it will also address specific types of housing requirements. It will provide improved guidance on the provision of affordable housing, and will emphasise links to other relevant planning advice, in particular PAN 74: Affordable Housing. Planning authorities and developers will also be encouraged to provide mixed tenure developments. This will be of direct benefit to those people who are unable currently to afford suitable housing. The creation of more affordable housing within mixed tenures will contribute to the creation of strong and healthy communities composed of a range of social groups. This will encourage greater social and labour mobility and will prevent particular areas of towns becoming unaffordable to certain social groups.
Houses in Multiple Occupation
5.9 The revised SPP3 will provide improved guidance on the planning system and Houses in Multiple Occupation ( HMO). There are concerns that high concentrations of HMOs within particular areas can have a negative effect on the community, pricing out potential housebuyers who cannot compete with those wishing to purchase property to operate as an HMO. HMOs may also erode the cohesion and amenity within particular communities. The revised SPP3 includes planning guidance on HMOs as an annex; this will replace Circular 4/2004 - Houses in Multiple Occupation: Guidance on the interface between planning control and licensing. The new guidance will encourage planning authorities to consider establishing policies to provide appropriate limits on the proportion of HMOs permitted in a particular area. This approach will allow local authorities to put policies in place where required, while still ensuring a sufficient supply of HMO accommodation for those by whom it is required.
Gypsies and Travellers
5.10 Existing guidance to local authorities on considering the housing requirements of Gypsies and Travellers will be underlined by the revised SPP3, which will provide a reference to new guidance notes on site provision, replacing the outdated reference in the existing SPP3.
Quality residential environments
5.11 The revised SPP3 will also provide improved guidance on concepts such as energy efficiency and sustainability. Local authorities and developers will be required to consider these at every stage of the process set out by the revised SPP3. This will require consideration of these issues in the design of housing, which will help create long-lasting, adaptable energy-efficient houses. This will help occupants to remain in the same home for as long as they choose to, and will contribute towards lower use of natural resources, as well as lower utility bills. The revised SPP3 will also encourage the considerations of these issues in relation to siting, location, construction materials and methods, links to transport networks, and any other relevant factor. Although the creation of more houses could arguably have a negative impact on natural resources, the provisions of the revised SPP3 will offset these as far as possible, and will actively encourage houses and developments which have sustainability and energy efficiency built-in. It will encourage developers and planning authorities to consider ways to preserve and, where appropriate, improve the natural environment, through the provision of, for example, well-designed sustainable drainage systems. The revised SPP3 will also provide guidance on the creation of new settlements, and the level of environmental, sustainability and design standards to which planning authorities and developers should aspire.
5.12 The revised SPP3 will give guidance on street and road layouts which encourage walking and cycling, as well as linking with public transport, and which do not give preference to car transport. Layout, including the provision of public spaces, can encourage a stronger sense of community and reduce the fear and incidence of crime. Considerations of energy efficiency, the environmental impact of developments, layout and design can all contribute towards improved quality of life of residents in developments which have strong and distinctive identities.
Costs
5.13 The compliance costs will be borne largely by planning authorities and developers. Where SPP3 has been implemented fully, the revised SPP3 will not necessarily impose any additional costs, but the remaining local authorities will bear additional costs when implementing the revised SPP3. The potential improvements to the system brought about by the revision may result in shorter timeframes, which is an additional cost for all departments.
5.14 Aside from the shorter timeframe, compliance costs would take the form of increased work resulting from new guidance on identification of housing needs (Strategic Housing Need and Market Assessment). This guidance requires planning authorities to take account of a wider range of evidence and factors such as GROS statistics, local forecasting and local housing strategies, as well as development plans, when identifying housing need. The revised SPP3 will also provide guidance that planning authorities should undertake greater monitoring of land supply and housing land audits, which will be a further additional burden. It is not possible to quantify the potential costs on local authorities. This will depend, among other things, on the approach that each takes currently.
5.15 Other potential costs on developers include the provision of affordable housing, although the revised SPP3 does not propose to increase expected contributions, and other developers' contributions through agreements under section 75 of the Town and Country Planning Act (Scotland 1997).
5.16 There will be increased costs in creating quality houses which take account of improved design standards and energy efficiency. This higher initial capital investment will affect all housebuilders, but is likely to be a particular burden on housing associations. This initial higher cost will result in long-term savings through lower maintenance and repair costs (savings which will be particularly relevant to housing associations, as well as home owners), but the initial higher investment is potentially an obstacle to achieving the aims of improved quality.
5.17 There is the potential for more land to be brought into the system for the development of housing. This may see the price of land decrease, which would represent a saving for housebuilders buying land. The price savings are difficult to predict, as the value of land varies widely, depending on such factors as location, adjacency, the condition of the market and the intended use of the land; however, such a price reduction would have a negative effect on those selling land for development.
6 Small/Micro Firms Impact Test
6.1 The revised SPP3 is likely to have a minimal effect on small/micro firms. The companies involved in house building do not fall into the small/micro firm category.
7 Legal Aid Impact Test
7.1 The revision of SPP3 will have no effect on Legal Aid.
8 "Test Run" of business forms
8.1 The revision of SPP3 will not require the creation and use of business forms.
9 Competition assessment
9.1 SPP3 will have no effect on competition, in that it does not change the system by which new housing developments are created.
10 Enforcement, sanctions and monitoring
10.1 The revision of SPP3 will create new guidance; as such this is not enforceable, and no sanctions will be required. Planning Directorate will, however, monitor the application of SPP3 through regular dialogue with those charged with its delivery.
11 Implementation and delivery plan
11.1 Will follow in the final RIA.
12 Post-implementation review
12.1 Will follow in the final RIA.
13 Summary and recommendation
13.1 Will follow in the final RIA.
14 Declaration and publication
14.1 Will follow in the final RIA.
Q9: Are there particular costs or benefits not addressed in the partial RIA? What are they?
Q10: Will particular groups not identified by the partial RIA be affected by SPP3?
« Previous | Contents | Next »