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CHAPTER EIGHT - CONCLUSIONS
Meeting the aims and objectives of the study
8.1 This report has addressed two main aims of the study as follows:-
8.1.1 To obtain financial figures reflecting the value of benefits achieved under planning agreements for each of the last 3 financial years (2004/05 to 2006/07) and for the different categories of planning agreement. A two stage survey has been completed of all 34 planning authorities in Scotland, involving collection of general statistics for 82% and an in-depth analysis of the details of agreements and contributions from a representative sample of 11. This has permitted a good indicative analysis for the whole country for the three years concerned of the number of planning applications associated with planning agreements involving developer contributions, the number of agreements under three different statutory provisions, an assessment of value of direct payment contributions and of in-kind contributions.
8.1.2 To use this data to forecast future revenues to 2010. Three forecasts have been made based on different assumptions concerning trends within the areas of the individual authorities for which returns were made, anticipated yields of significant developer contributions from known large development proposals within these authorities and the likely patterns in the areas of non responding authorities.
8.2 It has addressed the additional objectives as follows:-
8.2.1 To identify from all local planning authorities, as far as it is possible, the number of planning agreements across Scotland. Detailed statistics have been collated from the 82% of authorities responding and from official Scottish Government returns, giving a picture of the numbers of applications to which agreements are related, the pattern of agreements in relation to applications, the number which relate to direct financial contributions and to contributions in kind.
8.2.2 To break down the data collected on the financial value of planning agreements by individual planning authorities. Figures were obtained from the survey on an individual agreement basis where available and analysis has revealed that some local authorities use planning agreements more intensively than others, both in the number and in the value of contributions secured. Some of this variation will reflect differing land values, but it is likely that contrasting approaches and levels of expertise will also be factors.
8.2.3 To identify any trends in the scope and conditions applied to planning agreements over the three year period (2004/05 to 2006/07.) The survey permitted a degree of analysis of trends in both the scope and conditions. However, it was decided to prepare the projections to 2010 only on the basis of the average of the last three years yields adjusted for known likely large developments yielding contributions, especially in the light of the UK government's announcement during the study not to proceed with Planning Gain Supplement.
8.2.4 To identify best practice in order to see where planning gain is being derived from and what it is for. The detailed survey of the sample authorities, their practices and of specific planning agreements used by them has given some pointers to what might be considered to be best practice. However, there is clearly a need for improved and updated guidance and there are likely to be differences of opinion at present amongst developers and planning authorities as to what constitutes best practice in planning agreements and contributions.
8.2.5 To understand the value obtained through different aspects of planning agreements for affordable housing, roads infrastructure, schools contributions, environmental works and miscellaneous works and to consider the possible breakdown into direct financial and in-kind contributions received. A detailed analysis was carried out of the different types of contributions from which a number of conclusions have been drawn which should assist in understanding the economics of developer contributions and the development of policy and best practice guidance for the future.
Main findings
8.3 The main research findings of the report are:-
- The numbers of planning agreements entered into annually is increasing as are the values being secured. Most involve financial payments rather than in-kind contributions. The annual value of reported contributions rose from £14.4m in 2004/05 to just under £52.7m in 2006/07. It is estimated that the total value of reported and non reported contributions over the study period may have been about £159.1m. These sums do not include developer contributions being secured by planning authorities in other ways, for example through conditions on planning permission.
- There has been significant growth in the use of agreements under s69 of the Local Government (Scotland) Act 1973 and some authorities now appear to favour the use of these over agreements under s75 of the Town and Country Planning (Scotland) Act 1997. However, s75 agreements are normally used in cases where large or phased contributions are required. Agreements s48 of the Roads (Scotland) Act 1984 are rarely used to secure developer contributions
- Contributions towards recreation were most common during the study period and there was an upward trend the contributions towards affordable housing, education and public transport.
- Only 6 authorities indicated that they have a dedicated Developer Contribution Officer or Team. Authorities with such staff secured almost five times as many contributions as those without and also for a wider range of purposes. However, there is no evidence that the total value of the contributions secured by those authorities was greater than by authorities without such staff.
- One third of authorities had formula-based developer contribution policies for calculating contributions. Those that did secured on average £2m per annum more than those without such policies, whether or not they had dedicated Developer Contribution staff. This suggests that having introducing formula-based contribution policies is more likely to increase the value of developer contributions than appointing dedicated staff.
- More authorities are in the process of introducing formula-based policies, and those which already have them are introducing further policies to secure contributions for a wider range of purposes. It can be expected that this trend in policy development will increase the number and value of developer contributions being secured annually.
- Generally, authorities appear to be poor at monitoring and reporting on contributions that have already been secured. However, post agreement monitoring tends to be better in authorities which have dedicated Developer Contributions staff.
- Three different forecasts were made of the sums that could be secured in the period to 2010. These range from £91m to £167m.
Further conclusions and recommendations
8.4 This study is intended to assist in the development of future policy and guidance in the planning system in Scotland with regard to the use of planning agreements in the securing of developer contributions towards the off-site infrastructure needs and impact mitigation of new development. During 2008, it is expected that the Scottish Government will ask the Scottish Parliament to sanction the introduction of the new provisions of section 75 of the 1997 Act through commencement of the provisions of the amending section 23 of the Planning Etc (Scotland) Act 2006. This act significantly renames the relevant section of the act under the title of "Planning Obligations". While planning agreements will continue to be used for purposes associated with controlling the use of land, the focus on the use of planning powers, both through the first Barker report to the UK government (Barker, 2004) and in the reform legislation for planning in England and Scotland in the last few years, for financial and in-kind contributions from developers is likely to increase. Consistent, relevant and proportionate use of agreements and related policies covering levels of contribution for different purposes in different situations by planning authorities across Scotland is clearly essential.
8.5 An issue which appeared to grow in significance during the study, but lay outside the brief, is the incidence of developer contributions related to planning permissions which are not subject to planning or similar agreements with the planning authority (See paragraphs 6.13 - 6.15). Other forms of agreement with public infrastructure authorities exist which are a pre-requisite for development but are not part of the statutory planning process. One example is the use of agreements, under the same powers used by local authorities under s48 of the Roads (Scotland) act 1989, which are entered into with the Scottish Government for contributions to improvements of trunk roads and motorways. Anecdotal information has also been provided on receipt of up-front payments made after a council resolution to grant permission subject to a planning agreement but before issue of the statutory decision, without subsequently going through with the documentation of the agreement, following which the decision was released. No agreement is consequently recorded. In-kind contributions may be made purely on the basis of a suspensive planning condition (i.e. the development may not start until specified infrastructure is provided by unspecified parties). Finally, while planning agreements are used with planning authorities to complement Electricity Act consents for large electricity generating installations and transmission lines granted by Scottish Ministers, this is further information not included in this study due to inadequate returns (see paragraph 3.14).
8.6 This study has shown that there is much to be done to develop a system for developer contributions which is fit for purpose. There is a long agenda of issues to be addressed in developing an effective system for contributions through planning agreements in Scotland. Those which suggest themselves in particular from this study are:-
- The need for an agreed and consistent methodology for valuing contributions in all common categories of benefits;
- The need to identify the most common modes of contribution and establish consistent conventions for processing them, especially for affordable housing;
- The need for consistent recording and monitoring of key data concerning the use of planning or other forms of statutory agreements for developer contributions;
- The need to ensure that planning authorities have effective systems for monitoring and accounting for due payments under agreements and for the co-ordination of their use in the implementation of the relevant projects;
- The need to consider means to assess the value of contributions which are the result of suspensive planning conditions or are not the subject of legal agreements; and
- The need for an effective exchange of practice among planning authorities in the negotiation of developer contributions, both in the policy for their use and in the approach to assessing their value.
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