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3. ASSESSMENT OF HOUSING LAND AUDIT PRACTICE AND PROCESS

Introduction

3.1 The main participants in the HLA process are the Councils and house-builders. From our interviews with them, it is apparent they agree that HLAs serve an important function and that the fundamental aspects of the methodology for preparation described in PAN 38 are appropriate. However, as described later in the report, there was also a general consensus that various detailed aspects of preparation and presentation could be improved.

3.2 Also, it has been clear from our discussions that in some areas there is an underlying tension between private house-builders and Council HLA teams. For example, it has been suggested by house-builders that Councils are prone to present an optimistic account of the effective housing land supply, possibly because this will support a contention that the development plan housing requirement is being achieved. Some Councils present the opposite point of view, suggesting that house-builders are prone to be unduly pessimistic, as this will have the effect of reducing the future supply, and possibly providing the basis for additional housing land release.

3.3 We have no clear evidence that either of these contentions regarding motivations is valid. Our research is simply directed at establishing the best objective techniques to produce accurate and useful predictions of the components of housing land supply. However real or imagined the above perceptions may be, the relationship that can exist between the main participants in the audit process is a cause for concern, and is unlikely to be helpful in terms of the genuine collaboration needed to produce quick and effective analysis which is supported by all stakeholders.

Predictive Accuracy of HLAs

3.4 If the HLA is to be an effective monitoring tool it needs to achieve a reasonable level of accuracy in its prediction of the future housing land supply. The need for accuracy is all the more important given that the starting point for establishing the need for additional housing land allocations in structure plans is the quantity of housing land contained in the effective (base) housing land supply. Thus, for example, if the effective base land supply is over-estimated in the HLA, there is a risk that the overall provision of housing will not meet identified needs.

3.5 For the purposes of this research, therefore, it is useful to consider the predictive accuracy of some historical HLAs. At the time of preparation of this report, HLAs with a base date of 2001 represent the most recent point in time at which to assess the actual number of house completions that occurred on sites identified in the HLA, compared to that predicted in their 5 year programming period. Appendix 10 presents this information for the 21 HLAs where Councils were able to provide it.

3.6 The results can be summarised as follows:

• 10% of HLAs correctly estimated or under-estimated the housing supply.
• 90% of HLAs over-estimated the housing supply.
• 10% of HLAs over-estimated the housing supply by 10% or less.
• 43% of HLAs over-estimated the housing supply by 10% - 30%.
• 20% of HLAs over-estimated the housing supply by more than 50%.
• The average over-estimate of housing supply was 27%.
• The total over-estimate of housing supply was 19,472 homes.
• The total windfall housing supply (i.e. on sites not identified as effective in the 2001 HLA) was 25,571 homes.

3.7 Of the HLAs that have been assessed here, there is clearly a very large degree of disparity in accuracy. It is the case, however, that the large majority of HLAs produced in 2001 over-estimated the capacity of the effective land supply to a greater or lesser extent. Nevertheless, it is notable that, in total, the development of sites not included in the 2001 effective supply (i.e. windfall) more than made up for the shortfall in delivery of the effective supply. Although this implies that the over-estimation of the effective supply may not have had as serious a consequence in terms of housing provision as might otherwise have been the case, the fact remains that many of the HLAs themselves were inaccurate to a degree that could undermine their function as a monitoring tool.

3.8 However, it is necessary to apply some caution to extrapolating this analysis to the current position, for the following reasons:

• It is limited to considering a single HLA year. For example, it may be that the programming agreed for the projection period 2001 - 2006 preceded the availability of information on significant infrastructure constraints e.g. water & drainage.
• There are likely to have been fewer up to date adopted plans in 2001 than at present.
• HLA preparation methodology may have improved over recent years.
• The data is incomplete, it not having been possible to obtain the information for all 2001 HLAs.

3.9 Our research has not been able to establish the reasons why there are such significant differences between the accuracy of different Councils' HLAs in 2001. In order to understand the possible reasons it would be necessary to examine the constraints that have arisen on individual sites, and from these to understand why they were not predicted. Such depth of analysis was beyond the scope of this research. However, the following paragraphs do consider the principal factors that determine the predictive accuracy of HLA; firstly, the assessment of site effectiveness and, secondly, the programming of house completions in future years.

Definition of 'Effective'

3.10 There was an acceptance amongst our interviewees that the 'effectiveness' criteria identified in paragraph 29 of PAN 38 are generally appropriate. However, there were some concerns expressed by Homes for Scotland (HfS) and Councils regarding the interpretation of most of these criteria.

Ownership

3.11 In respect of 'ownership', PAN38 states that to be effective:

"the site is in the ownership or control of a party which can be expected to develop it or to release it for development".

HFS considers that sites should be in the hands of a recognised house builder in order to be deemed effective. It was indicated that landowners and/or development companies can have many motivations for seeking a housing designation for land without necessarily intending to build in either the short or long-term i.e. boosting asset value, tax planning, speculative land holding. It therefore considers that where such motives can be shown to exist, sites should be non-effective until proof emerges of a change in circumstances, or should be deleted from the established supply if circumstances have not changed over a period of years. In these circumstances, HFS consider it reasonable to ask the Council for proof of an owner's intention to build or sell. They also consider that where local authorities own sites, they should provide evidence that they are actively marketing those sites or have Council approval to do so; otherwise the sites should be non-effective.

3.12 The Councils we spoke to indicated that the types of issues raised above by HfS are taken account of in HLA preparation, but it was suggested by some that the HfS approach to ownership and effectiveness can be unreasonable. For example, they indicate that it is common for HfS not to accept the effectiveness of sites that are controlled by small house-builders not represented by Homes for Scotland.

Physical

3.13 HfS believes that too much reliance can be placed on verbal assurances from owners/developers that constraints can be overcome, and consider that it would be preferable to see evidence that commitments are in place to initiate expenditure or other actions to remove constraints. For example, it suggests that Scottish Water should confirm that there are no drainage constraints to the development of a site within the assumed programme period.

3.14 The Councils we spoke to consider that they go as far as practical to establish that physical constraints can be overcome, and that unless there is evidence to the contrary it is reasonable to accept the views of landowners/developers. With respect to Scottish Water, Councils have commented that clear information is not always forthcoming.

Deficit Funding

3.15 HfS considers it important that sites requiring deficit funding are separated out in the Audit. It points out that there is a problem of determining what is effective over 5 or 7 years when Communities Scotland funding programmes typically extend to 3 years. It suggests that Councils/Housing Associations/Communities Scotland should provide evidence that funding has been approved or secured for affordable housing sites to be effective. In addition, they suggest more consideration should be given to calculating the potential output from known or estimated funding programmes. Communities Scotland will generally not give any assurances beyond its 3 year funding programme.

Marketability

3.16 HfS considers that too little attention is given to the marketability of sites, particularly in respect of sometimes overly optimistic programming. It notes that in areas with many unimplemented housing allocations, programming is determined on the basis of the developer/landowner's expectations for individual sites, rather than wider consideration of the programming capacity of the local area. In some cases, it considers that HLAs can make overly optimistic assumptions about the scale of building likely in settlements/areas where several sites are coming forward within the 5-year period.

3.17 Several of the Councils consulted accept that it is difficult to reconcile individual developer/landowner aspirations with wider market factors. This issue could be less problematic if a clearer link between audit programming and allocations in development plans existed .

3.18 A separate issue raised by interviewees is some confusion over the terminology used in PAN 38 in relation to "effectiveness". The PAN 38 glossary definition of effective housing land supply refers to the 'period under consideration'. Some take this to mean 5 years, i.e. for a site (or part of a site) to be effective, it must be capable of being developed within 5 years. It has been known for house-builders to suggest, therefore, that such sites are constrained. Because the only constraint is temporal, some Councils have in the past introduced a further definition - 'potentially effective' - to refer to sites (or parts of sites) which are capable of being developed, but beyond 5 years. We therefore recommend that the definition of "effective housing land supply" be reviewed to make clear whether or not a site can be effective beyond 5 years.

Accuracy of Programming

3.19 HfS and the Councils consulted agreed that the two main reasons for inaccurate programming were start dates being set too early and assuming too high a rate of completions thereafter. It was also generally accepted that the main reason for this is a tendency by house-builders to be optimistic in these respects, reflecting sometimes overly ambitious business plans.

3.20 As matters relating to start dates for development and completion rates will vary greatly depending on the site and the individual circumstances, it is difficult to make prescriptive recommendations upon which assumptions should be based. It is clear, however, that Councils and house-builders need to think more carefully about possible time constraints to development e.g.:

• Land assembly
• Undertaking technical studies
• Pre-application discussions and finalising plans
• Planning application determination
• Planning application amendments
• Legal agreements
• Building warrant
• Road construction consent
• Sales rates

Collation of Audit Information

3.21 Although the approach varies across Scotland, in some areas Councils use HfS as a conduit for the majority of site and programming information from its members. Councils will usually supplement this information by assessing the potential of sites in which HfS members do not have an interest. Both HfS and the Councils consulted agreed that the most significant 'delay' in the HLA process is usually the collection of this information. In this regard, HfS concedes that it is often quite difficult to secure adequate information from some of its members within a reasonable timescale, if at all. Although many HfS members seek to provide timeous and accurate information, the overall response by HfS is delayed by those that do not.

3.22 Where it is not currently practiced, there may therefore be a case for Councils and individual house-builders to communicate more directly. It is recognised, however, that this could simply transfer the problem of data collection to Councils. This issue is considered further in the following section on the HLA preparation base date.

HLA Preparation Base Date

3.23 At present, all HLAs are prepared annually, but with varying base dates across Scotland. This does not allow for like for like collation of data across Scotland as a whole, and it may therefore be desirable to have the same annual base date for all HLAs. HFS has raised the concern that such an approach may result in resource constraints, created by the need for it to respond to all draft HLAs at the same time. We accept that this is likely to be the case, but it may be that this problem can be reduced by placing more responsibility on individual house-builders to supply detailed information directly to Councils.

3.24 For individual house-builders this would have the advantage of a set time of year to collate information on their sites. For example, one could suggest a process by which all Councils write to all known house-builders in their locale on the same approximate date to request specific information. Appendix 11 to this report provides a suggested pro-forma for this request. The role of HFS, as it currently is in a number of areas, would then be to take an overview and comment upon the collated draft HLA. For this approach to be successful, some house-builders would have to take greater responsibility to provide the necessary information within prescribed timescales.

HLA Preparation Timescales

3.25 Our analysis indicates that it usually takes more than 6 months, and often 9 - 12 months, to finalise a HLA. Most of our interviewees agreed that the process could be completed more quickly, but identified the following constraints.

• HLA preparation has relatively low priority. In most Councils it is the planning policy team that undertakes or manages the HLA process, and the resource commitment can be diluted by other work priorities, particularly local plan preparation.
• In regard to the house-builder response (which the Councils consulted during this research project consider to be the most significant delay), the day to day business commitments of individuals often means that a response to consultation by the Council or HfS can be delayed, or in some cases is of inadequate quality.

3.26 The majority of our interviewees agreed that quicker HLA review was required in order to present an up-to-date position and to allow quick action to be taken if necessary. Although a number of the Councils we spoke to agreed that a HLA review could be completed within 4 months if prioritised by the key stakeholders, others considered this to be unrealistic due to the extensive consultation process.

Programming Timescales

3.27 SPP3 has a requirement for a minimum 5 year housing land supply to be provided at all times. To assist in achieving this, Paragraph 31 of PAN38 indicates that HLAs should specify sites which can be programmed over a period of 5 years and shortly thereafter, at least years 6 and 7. Despite this, a significant number of HLAs only provide detailed programming for a 5 year period. As explained in PAN 38, the identification of extended programming helps to monitor whether sites are available to continue to meet the housing land requirement. It is also relevant in terms of allowing an assessment of the ability of an emerging local plan to provide sufficient effective housing land to meet requirements. For example, a finalised local plan should be available approximately 2 years before the local plan is adopted, meaning that it should be possible to establish from the HLA whether there will be a 5 year supply of housing at the time of adoption, as required by SPP3.

3.28 Some Councils interviewed for this research questioned the value of detailed programming for a 7 year period on the grounds that later years are too speculative to be of much predictive value. Given the apparent tendency of the majority of historic HLAs to over-estimate the delivery of housing over a 5 year period, this would seem to be a reasonable concern. However, it may be that the longer term development planning and housing land release phasing advocated by SPP3 should provide the basis for more accurate extended predictions in the future.

Windfall Sites

3.29 Windfall sites are defined in the glossary of PAN 38 as

"The unplanned component of housing provision. The term relates to housing provided through new development or the conversion of buildings at sites not allocated for housing in development plans".

Windfall sites by their nature, therefore, are unpredictable. In practice, windfall sites tend to be only identified in an HLA when they have planning permission. Inevitably, this will mean that the HLA will under-estimate the contribution of windfall over a 5 year period (and more so over 7 years).

3.30 This is confirmed by our research ( Appendix 10), which compares the number of house completions on sites within the effective land supply (2001 base) and the total number of house completions within the given area. As indicated in paragraph 3.7 of this report, although HLAs generally over-estimated the capacity of the effective land supply, the actual shortfall in completions in this respect was more than made up for by windfall completions.

3.31 However, the problem remains that windfall is unpredictable, and there may be a risk in placing reliance upon its future contribution to the housing land supply. For example, great care should be taken in extrapolating historic windfall contributions in circumstances where there has not been an up-to date development plan, which may have otherwise allocated the site.

3.32 The manner in which windfall sites are treated as a contributor to meeting the housing requirement is a matter for development plan policies. In practice, as advised in SPP3, it is usual to treat windfall as providing flexibility, rather than making a specific contribution to the supply. Given the identified historic tendency of HLAs to over-estimate house completions, this would seem to be the safer way to proceed. Moreover, the maintenance of up to date development plans should reduce the windfall component of the housing supply.

3.33 Our interviews with stakeholders highlighted a debate over the benefits of making greater efforts to identify 'windfall' sites within the HLA, for example arising from Urban Capacity Studies. The general consensus was that there was too great an uncertainty regarding the delivery of such sites (as well as confidentiality issues) to merit their inclusion.

Stakeholder Involvement and Dispute Resolution

3.34 All of Scotland's HLAs are administered and published by local authorities. The house-building industry (usually via HFS) is the main participant. From our interviews with these two main participants it is clear that there are variable levels of satisfaction with the quality and effectiveness of the collaboration. In some areas, there is considered to be successful joint working to produce HLAs and general agreement on content. At the other end of the spectrum, there appears to be suspicion between the parties and a sense that the exercise is adversarial rather than collaborative.

3.35 The preparation of the HLA should be a purely objective exercise, and distrust of motives can only serve to lengthen the time taken to reach agreement and reduce the level of effective collaboration needed to gain a better understanding of the land supply position and bring land forward for development. However, in circumstances where agreement cannot be reached, there may be a need for neutral arbitration. This approach has apparently been successfully implemented in Aberdeen & Aberdeenshire ( Appendix 1b - para 1).

3.36 In terms of house-builder involvement in the HLA process, the various HLA teams interviewed reported varying levels of commitment, with a number commenting that responses were patchy and took too long to receive. HFS commented that it had difficulty in mobilising its members to respond adequately to consultation. Given that individual house-builders will have the best information on the status of sites in their control, there should clearly be an onus on them to participate fully in the HLA process. As discussed above, a standard information request issued by Councils ( Appendix 11), requiring specific information within a prescribed time period, may assist in focussing the efforts of house-builders. We would also suggest that guidance on HLA preparation places a specific onus on house-builders to engage quickly and effectively in the process.

3.37 Appendix 5 provides information on the involvement of other stakeholders, and this varies depending on the HLA area. We would suggest that there are 2 main stakeholder interests. The first relates to those organisations who can directly influence the content of the HLA through their knowledge of individual sites and possible constraints e.g.:

• Private house-builders
• Social housing providers
• Communities Scotland
• Council Estates Departments
• Council Education Departments
• Council Development Management/Building Standards/Local Plan Teams
• Council Road Departments
• Council Housing Departments
• Scottish Water
• Transport Scotland

3.38 The opportunities for more effective input by house-builders have been considered earlier in this report. In some respects, social housing providers are no different and, like private house-builders, Housing Associations are inclined to be overly optimistic regarding development start dates. Communities Scotland has indicated its desire to be fully involved in HLA preparation, and this would appear to be consistent with their current activity. However, with regard to Scottish Water, there would appear to be some disparity between its stated desire to be involved in the detail of HLA preparation and the reported recent experience of Councils. At present, most Councils do not consult Transport Scotland. As regards internal consultations within local authorities, there appears to be a wide disparity in approach. Glasgow and Renfrewshire, for example, undertake an extensive internal consultation exercise. Those Councils which consulted less than others indicate that their approach is based on the lack of added value likely to be achieved from a more comprehensive approach, given the difficulty in obtaining useful information from those that have a relatively peripheral interest and a lack of resources and/or inclination to become properly engaged.

3.39 The second type of stakeholder interest relates to those organisations that can use the information contained in the HLA to assist in their resource planning and monitoring exercises e.g:

• Scottish Government
• Communities Scotland
• Council Education Departments
• Council Housing Departments
• Scottish Water
• Transport Scotland

3.40 Although our contact with the various stakeholders that have responsibility for infrastructure provision has been limited, the general view of the Councils and house-builders consulted is that they do not take adequate account of the phasing of development provided by HLAs. This could be a 'chicken and egg' situation, in that a failure by infrastructure providers to input to the formulation of HLAs could lead to unrealistic assumptions being made by Councils and house-builders in relation to programming.

3.41 There would appear, therefore, to be a good case for key infrastructure providers to contribute more information to the HLA preparation process, and then to monitor its content against their own future planning objectives. In theory, at least, this should allow for more accurate programming and more effective liaison between planning authorities, developers and infrastructure providers in terms of delivery.

3.42 However, there will be an appropriate balance to be struck between consultation (both internal to Councils and externally) and speed of HLA completion. In our view, those responsible for the HLA should set clear requirements for stakeholders in terms of information required and the time within which this should be provided, with this research suggesting within 6 weeks. Continued liaison with the various stakeholders should ensure that the form of response is helpful to the HLA process.

Development Plan Monitoring Function of HLAs

3.43 HfS consider that inadequate emphasis is placed upon rectifying the situation when the HLA shows a shortfall in the housing supply. HfS emphasised that it questions the concept of the house-building industry dedicating significant resources to a monitoring process that does not seem to have any teeth. For example, HfS comments that Councils will rarely take action to bolster the land supply within a reasonable time period, and it is virtually unheard of for the Scottish Government to intervene. It considers that the only recourse for the developer is one of appealling individual planning applications. Not only is this unlikely to make any significant difference to the underlying problem, but it is also an expensive and risky undertaking for the applicant.

3.44 It should be noted that the Councils consulted did not accept that they failed to adequately respond to housing land supply shortfalls . They indicated that shortfalls in the effective supply were often mitigated by windfall development, but if a problem arises then appropriate measures are taken in line with SPP3 Planning for Housing.

3.45 The manner in which Councils and development plans should respond to housing land supply issues identified in HLAs is beyond the scope of this research.

Small Sites

3.46 PAN 38 is flexible in its requirements for the way that small sites (less than 5 houses) are dealt with in the HLA, allowing them to be either counted or estimated. Our research shows that most HLAs contain factual information on the contribution of small sites, but usually in summary form for presentational purposes, and this would seem to be appropriate. The use of estimates in HLAs for the longer-term contribution of small sites, the detail of which is unknown, is not supported by HFS. It argues, this is contrary to the principal function of the HLA, which is to deal with known sites. In rural areas, however, Councils tend to argue that given the potential significant contribution of small sites to the housing supply, it is reasonable to make estimates of their future contribution.

3.47 In some areas, there is agreement between Councils and HFS that not all known small sites are counted (e.g. 50% only) on the basis of historical trends. In Glasgow & Clyde valley sites of less than 4 units are not counted at all. Our research suggests that the significance of small sites to the overall land supply is greater in rural areas, and so there might be a basis for different approaches being taken depending on the area. We therefore recommend that the percentage of small sites to be counted as effective in the HLA should be decided by individual Councils, in consultation with key stakeholders.

Affordable Housing

3.48 A number of HLAs seek to distinguish between the tenure of the housing supply, usually by making a distinction between 'affordable' housing and private market housing. However, there would appear to be inconsistencies between HLAs in terms of the definition of 'affordable' housing. Also, HfS and the Councils consulted indicated difficulties in making longer term predictions for the affordable housing component on specific sites. PAN 74 describes a number of possible forms of affordable housing, including private market housing and low-cost home ownership. In practice, this usually means that the type and number of affordable houses on a site is likely to result from a negotiation between the developer and the Council during consideration of a planning application. It is therefore difficult to provide refined programming for affordable housing in later programming years of the HLA.

3.49 This difficulty is compounded by the fact that Communities Scotland has only a 3 year funding programme, which constrains accurate predictions beyond this period. A number of HLAs simply assume that the Council's affordable housing policy (if they have one) for a fixed percentage of affordable houses will apply. In these circumstances there is a risk that the Councils assumptions about affordable housing in HLAs become a point of contention in reaching agreement on audits.

House Types

3.50 In our view, there would be benefit in having a better understanding of the type and size of housing comprising the established land supply, to help understand how various sectors are provided for. Moreover, the provision of more detailed information in the HLA might assist in determining the need for planning policies that seek to influence the type of housing being provided. At present, most HLAs identify the size of sites and the likely number of units to be accommodated. This provides an indication of gross density of development, but a finer level of detail would be helpful. Where possible, therefore, HLAs should attempt to distinguish between house type and size (e.g. flats, family housing, sheltered housing, bedroom numbers). However, the more detailed the information required, the more difficult it is to collate. The Councils interviewed for this study are concerned that the gathering of such information may be too time consuming. HfS has advised us that house-builders will not usually give detailed consideration to house-types until the planning application preparation stage, which means beyond about Year 3 of the HLA any such prediction is largely guess work. Nevertheless, we consider that the onus should be on house-builders to provide as much information as possible, in an accessible format (e.g. summary sheets submitted as part of planning applications and subsequent revisions).

Constrained Sites

3.51 Interviewees generally agreed that detailed information should be provided on all constrained sites, particularly to identify the nature of the constraint and the action required to make the site effective. In some cases, this approach could also apply to effective sites, where there was agreement that a particular constraint was capable of being removed within the 5 year period.

Audit Content and Format

3.52 There is broad agreement amongst the stakeholders interviewed that the following information could and should be provided in the HLA:

• Unique site reference
• Grid reference
• Location Plan showing site boundary
• Greenfield or Brownfield
• Conversion or Refurbishment
• Site Area
• Developer / Owner of site
• Site capacity
• Affordable housing component
• 7 years programming of future completions
• An aggregate total of land supply beyond 7 years
• Planning Status
• Length of time in Established Land Supply
• Length of time in Effective Land Supply
• Housing Type (e.g. flats, houses)
• For a constrained site, the reason for the constraint

3.53 No individual HLA currently contains all of the above information, although all of these categories are included in one HLA or another.

Stirling HLA

3.54 Although a number of the HLAs examined in detail as part of this research were well researched and presented, it appears to us that the Stirling Council Housing Land Audit 2006 is the most accessible in its presentational format, as well as being one of the most comprehensive in terms of content. It therefore presents an example of good practice and is worth considering further.

3.55 At the outset of the Stirling Audit there is a clear and succinct explanation of the purpose of the Audit, preparation methodology and its content. This is followed by a 'Statistical Analysis', which collates the key pieces of information emerging from the Audit in the form of easily understood tables and bar and pie charts. This is in contrast to some other HLAs which simply comprise columns of numbers, which without reference to other documents such as the Structure Plan, are meaningless. The statistical analysis is followed by the 'Development Programme Summary' (by individual settlement), which presents the raw housing land supply/programming data in the traditional manner.

3.56 Following this, the bulk of the Stirling Audit comprises the 'Schedule of Sites'. This presents each housing site on a single page and includes a location plan, aerial photograph and site photograph. This immediately provides an understanding of its general disposition and character.

3.57 Finally, an appendix to the document considers the performance of the Structure Plan in the context of the Audit. Appendix 12a contains a more detailed overview of the process involved and method used in preparing and presenting the Stirling HLA. Appendix 12b contains extracts of the Stirling HLA.

3.58 In our discussions with some other Councils we presented the Stirling Audit for comment. Although there was recognition that it was well presented and informative, concerns were expressed that for larger HLA areas it would take a long time to prepare and may be unmanageably large.

Monitoring by the Scottish Government

3.59 Because the 17 HLAs produced across Scotland have different methodologies and outputs, there is currently little basis for compilation and consistent monitoring at a national level. Our research suggests a number of recommendations in respect of format and consistency, which has led to the development of a standardised format. This is contained in Appendix 13 ( a & b), and is based on the Stirling Audit described above. Appendix 13(b) is a "Summary Information Template", which we consider could form the basis of a submission by each Council to the Scottish Government.

Historical Information

3.60 The principal purpose of this research is to assess the effectiveness of HLAs in monitoring the future housing land supply. It is therefore outwith the scope of this study to consider in any detail the manner in which the audit process could provide useful historical information on housing provision. However, it is apparent from our research that much of the analysis required for the HLA is equally applicable to establishing and reporting actual events. Thus, most (if not all) of the data being collated to monitor the future situation (e.g. housing completions, proportion of affordable housing, proportions of greenfield and brownfield housing), will also be informative in respect of past performance. Many Councils do collate this information for their own use, but there are inconsistencies in the way this is done, and it is not collated at a national level.

3.61 If the intention is to establish consistent measures for assessing and reporting the components of the future supply, it would clearly be sensible to record actual outcomes in the same way. We therefore recommend that further consideration is given by the Scottish Government to how this can be achieved (see Recommendation 16).

Conclusions

3.62 From the research sample of HLAs published in 2001, there is evidence that a significant proportion over-estimated the number of houses that were actually built. This places into doubt the usefulness of the HLA as a monitoring tool, and the reliance currently placed on it to provide the basis for future housing land requirements in Structure Plans. The main danger would seem to be the possibility that development plans will provide less land for housing development than is actually needed to meet demand. Our assessment suggests that there are likely to be a number of reasons why HLAs are prone to such over-estimations of supply, for the following two main reasons:

• Sites are deemed to be effective which prove to be constrained, and this can be for a variety of reasons. At present, it would appear that some Councils take the view that unless there is evidence that a site is constrained, it should be assumed as effective. This may be an over-optimistic approach.
• House-builders and Councils are prone to be over-optimistic regarding development start dates and the rate of house-building thereafter. This seems partly to result from assumptions that the pre-development programme will proceed smoothly, which in practice it rarely does.

3.63 HLA preparation can be a difficult and protracted process, mainly for the following two reasons:

• The engagement between Councils and house-builders is sometimes adversarial as opposed to collaborative.
• The information required by Councils from house-builders and other stakeholders can be insufficient and/or take too long to be provided.

3.64 The following chapter proposes a number of recommendations that seek to address these problems, as well as a number of other issues that have been raised.

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