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EXECUTIVE SUMMARY
Introduction
This report sets out the finding of a study commissioned by the Scottish Government. The principal aim was to obtain financial figures reflecting the value of planning agreements by Scottish planning authorities during the three year period 2004-2007. The study was also required to identify the purpose for which agreements are being secured, explore the practice involved in doing so and forecast the value of what may be secured over the period to 2010.
Methodology
The study was conducted in two stages. The first stage involved a questionnaire survey of all 34 Scottish planning authorities. The response rate to this was 82%. The second stage involved a detailed case study of a representative sample of 11 authorities.
Findings
Use of Agreements
It is estimated that Scotland-wide there were just over 1000 agreements entered into over the study period, associated with just under 900 planning applications. The overall annual trend was upwards. As the numbers of applications determined fell during each year of the study period, it is also evident that there was an increase in the proportion of planning permissions linked with an agreement.
There was considerable variation in the use of agreements at local authority level. The most active authorities in terms of numbers of agreements drawn up were Scottish Borders, City of Edinburgh and City of Glasgow. Only Shetland and Comhairle nan Eilean Siar did not enter into any agreements.
The proportion of all planning permissions linked with an agreement remains very low but is rising. The increase in the use of agreements for major housing developments, however, was especially significant. In 2003/04, 9% of all such permissions were linked with an agreement and the proportion rose to 16% in 2006/07. Scotland-wide, the overwhelming majority of agreements (75%) are linked with major housing developments.
Values Secured
It is estimated that the total value of all direct and in-kind contributions secured over the study period was just over £159.1m. The bulk of this was secured through direct financial contributions but the study has examined ways of valuing the smaller but significant proportion of in-kind contributions which have been made. There is a clear upward trend in the annual amount being secured.
Legal Mechanisms Used
There has been a significant increase in the use of agreements under s69 of the Local Government (Scotland) Act 1973. While the majority of agreements secured in 2004/05 were under s75 of the Town and Country Planning (Scotland) Act 1997, by 2006/07 the majority were under s69. While a large proportion of the s69 agreements were accounted for by just 2 authorities, it is clear that during the study period the number of authorities using s69 was increasing and in the final year (2006/07) 5 authorities were using that mechanism more often than they use s75. It appears that agreements under s48 of the Roads (Scotland) Act 1984 are not commonly used to secure developer contributions. Delivery of trunk road or motorway improvements following suspensive planning conditions or agreements direct with the Scottish Government are not subject to planning agreements. The cost of providing such infrastructure is therefore not included in this report.
It is evident that s69 agreements are being used primarily to secure one-off direct financial payments, often linked with formulaic developer contribution policies for specific purposes and to be paid at the time planning permission is granted. While less frequently used, the total value of contributions secured under s75 agreements is higher than that for s69 agreements. It appears that authorities prefer to use the s75 mechanism for very large financial contributions where payment is to be phased and linked to specific stages of the development. In-kind agreements also tend to be secured through s75. This pattern can be explained by planning authorities' need to ensure that such obligations run with the land through registration and only agreements under s75 can secure this.
Purpose for which contributions are secured
In terms of the number of separate contributions, the most common purpose for which a contribution is secured is recreation. However there is a clear upward trend in the numbers of contributions secured annually for affordable housing, education and public transport.
In terms of direct financial contributions, the largest sum secured was for new road infrastructure. The next largest sums were for recreation and education. There is an upward trend in the sums secured for affordable housing, open space/environment and public transport.
With regard to the total value of in-kind contributions, over 80% is accounted for by affordable housing contributions, largely by virtue of land contributions. The value of in-kind contributions towards roads infrastructure and recreation appears to be growing annually.
With regard to affordable housing contributions reported to the study team, these amounted in total to £6.9m in direct financial payments and £25.3m worth of in-kind contributions. The in-kind contributions included 120 dwellings provided on site, 42 restricted sale dwellings and 79 serviced land or plots. There is significant variation among authorities over the selection of direct or in-kind contributions and in the levels of contribution.
The total value of reported education contributions was £18.8m. While these are normally secured through direct financial payments linked to new housing developments, there is considerable variation between authorities with regard to the amounts secured per dwelling.
Contributions towards public transport provision were worth a total of almost £7m. The majority of contributions secured were towards the Edinburgh Tram Project and Scottish Borders Railway.
The total value of reported direct financial contributions towards community facilities was almost £5.4m. While a number of in-kind contributions were also secured, these were of little financial value.
There was a substantial increase in the annual number of agreements securing environmental/open space contributions during the study period. Direct financial contributions amounted to almost £4.3m. In-kind contributions generally had little financial value and of those that did, the total secured was worth only around £156k.
Recreation accounted for the largest number of contributions (23% of all contributions) with a significant proportion (40%) being secured by Glasgow City. Direct financial contributions were worth a total of almost £13.3m. The total value of in-kind contributions was £1.2m.
The total value of contributions towards roads infrastructure was just over £30m, although a very large proportion of this was accounted for by just one contribution. Contributions tend to be direct financial payments with over £28m of the total being secured in this way.
Contributions to public realm are least frequent and tend to be of lowest value financially with an average of £37k per contribution.
Miscellaneous contributions accounted for £2.7m over the period, almost all of this captured through direct financial payments. There was a wide range of benefits covered ranging from very minor items such as Dog Bins and recycling facilities through city car club contributions to a major contribution towards ground stabilisation for economic development.
Policy and Practice
Only about one quarter of the authorities who responded have appointed an officer or team dedicated to developer contributions or are planning to do so. Authorities with a dedicated officer or team secured almost five times as many contributions as those without. They also secure contributions for a wider range of purposes.
Most authorities (84%) have developer contribution policies in their Development Plan and two thirds have specific Supplementary Planning Guidance on this issue. However, only one third of authorities have policies involving a formula for calculating the amount of contribution that will be sought.
It is also evident that authorities operating formula based policies are securing around £2m per annum more than those without.
Post agreement monitoring appears generally to be capable of improvement within most authorities. It tends to be better where the authority has a dedicated officer or team. It will always be the case that some benefits secured will not be delivered e.g. because the development concerned does not go ahead. However, it is a matter of concern that many authorities were unable to advise the study team quickly and comprehensively about outstanding agreed contributions and whether they have been delivered.
Forecast values to 2010
One conservative forecast from the trends identifiable from the data is that the total value of contributions that may be secured over the period to 2010 will be around £91m. However this forecast excludes authorities that did not provide information for the study and also the potential impact of very large individual contributions. If an allowance for non respondents is made and, as is anticipated, an agreement is secured in relation to such large development sites as Shawfair in Midlothian or Ravenscraig, North Lanarkshire, then a more optimistic forecast total for the period to 2010 would be £167.1m.
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