6 DEVELOPMENT OF MODEL PROCESSING AGREEMENT
6.1 The brief identified the requirement to draft a model processing agreement. In developing our model, we reviewed a number of existing models. These included:
- The Scottish Government template as presented in the 'Development Management Consultation Paper' (January 2008)
- The ATLAS model as presented in their Guidance Note 'Implementing Planning Performance Agreements' (April 2008)
- The Slyfield Regeneration Project Planning Performance Agreement
- An agreement developed between Mactaggart & Mickel and South Ayrshire Council in relation to a proposed development at Greenan, Ayr
6.2 On the basis of our review of existing models and feedback from the initial round of consultations, a draft template was developed to provide a model for further discussion.
Consultation on the draft processing agreement template
6.3 The draft template developed was discussed in some detail at a workshop to which all those who had participated in the consultation phase were invited. A total of 11 organisations were represented at the workshop, including local authorities, statutory consultees, private sector developers, planning consultants and solicitors. Representatives from the Scottish Government were also present.
6.4 At the workshop, attendees commented on a range of issues relating to the potential use of processing agreements, including:
- Timing for drawing up agreements
- Signatories to the agreements
- Coverage of agreements
- Length and complexity of agreements
- Legal status of agreements
- Responsibility for drawing up agreements
- Incentives, penalties and charges
- Format of agreements
6.5 On the whole, there was support for the concept of processing agreements and no-one was totally opposed to their use. Indeed, there was a good degree of consensus in general over the potential nature and scope for any such agreements. The comments made during the workshop are summarised below.
6.6 There was a clear preference for any agreement to be drawn up as early as possible in the process. This reflected a view that early engagement and commitment from all parties is a critical success factor and the sooner that such discussions can be held the better. However, there was also a recognition that the earlier any agreement was drawn up, the greater the need for flexibility. An agreement drawn up at the very start of the process will need to be able to adapt to reflect both internal and external changes that cannot be anticipated at the outset - for example, design changes, alterations to reflect the outcomes of consultation, legislative changes etc. All agreed that any processing agreement should be treated as a 'live' document that should be regularly reviewed and updated to reflect changing circumstances.
6.7 The workshop attendees considered whether it was preferable to restrict any processing agreement to an agreement between the local authority and the developer or whether any such agreement should encompass a wider group of stakeholders, in particular relevant statutory consultees. Most were of the view that an agreement should involve statutory consultees and the example of the processing agreement drawn up in relation to a major proposed development at Ardersier was quoted. This agreement involved the local authority (Highland Council), the developer and the statutory consultees. Although the timescales set out in the processing agreement were ultimately not met, the principle of including the statutory consultees was viewed positively. There was support for the view that involvement of the statutory consultees would help in clarifying their information requirements from the outset and removing or reducing this potential element of uncertainty from the process. However, it was also stressed that setting in place a processing agreement should not be a substitute for comprehensive pre-application consultation, which the agreement should serve to formalise and summarise, rather than replace.
6.8 On the other hand, caution was expressed about the time it could take to reach agreement if more signatories were involved - especially if commitment was required at a senior level. Senior level commitment was considered essential if the agreement was to carry the required 'gravitas', but there was recognition that to get this level of commitment from a wider range of signatories could be problematic. The example of a very straightforward agreement drafted between Mactaggart & Mickel and South Ayrshire Council was cited - although a relatively simple document limited to the developer and the local authority, this had not reached sign-off at the time of our research.
6.9 A draft processing agreement template was circulated in advance to workshop participants and a simplified version of the template was discussed in detail during the course of the workshop. There was general agreement over the scope of the draft template and the issues covered. Participants agreed that there was a need to balance the demands of a potentially complex application against the need to develop a manageable document that can be readily drawn up and agreed.
6.10 The draft template included provision for the following elements within the agreement:
- Checklist to determine whether this is a category of application where a processing agreement would be appropriate (although this is really a precursor to the agreement, rather than a part of the agreement itself)
- Details of the stages covered by the agreement
- Details of additional information required to determine the application
- Details of consultees and their information requirements
- Details of Section 75 requirements (and/or other conditions or contributions)
- Details of the decision-making process and agreement to this timetable
- Detailed timetable (in the form of a Gantt chart)
- Summary of key dates
6.11 This was felt to be an appropriate scope for the agreement, although two possible extensions to the coverage were noted:
- Details of the community consultation process and timings (although it was clear from the discussion that those present at the workshop felt very unclear about the future requirements in respect of community consultation under the new Planning Act, so this aspect may need to be developed as the approach becomes better established).
- Details of the plans for engagement of elected members (although it was generally agreed that the unpredictable nature of the inputs of members and the difficulties of establishing meaningful early engagement were challenges that had to be accepted and could not be overcome through any form of processing agreement).
Length and complexity
6.12 The draft model processing agreement presented in the Scottish Government's consultation document 25 was a one-page document, although it was acknowledged that, once completed, the form would inevitably stretch to more than this. The template presented for discussion at the workshop ran to nine pages, although this included a cover page and a checklist to determine whether an agreement was required which, as noted above, is not strictly speaking part of the template itself. Again, once completed with all relevant information, this could extend to more pages.
6.13 Other examples mentioned included the 2-page Mactaggart and Mickel example quoted above and also an English example - the Slyfield Regeneration Project's Planning Performance Agreement - which was a more detailed document stretching to 14 pages. This document includes much of the policy background as well as full details of the various subsidiary working groups involved in progressing the proposal. Reference was also made to the processing agreement drawn up for the Caltongate project in Edinburgh which was a much lengthier document.
6.14 The workshop participants did not appear to have any major concerns regarding the length of the template under discussion and appreciated that dividing the content into separate sections on separate pages promoted clarity. There was a clear preference for a short, manageable document.
6.15 The preference from those consulted (including the lawyers represented) was for a document that was not legally binding, but rather one which represented a more informal agreement. This was largely on the basis that any document that was to be legally binding would by necessity be far more complex and lengthy and - by implication - take far longer and be more costly to develop and agree.
6.16 The only exception was any aspects covering Section 75 agreements or other financial commitments which clearly would require separate legal contracts to be drawn up.
6.17 Most workshop attendees felt that the local authority was best placed to drive forward the drafting of a processing agreement as they would have access to all the necessary information and relevant contacts. However, it is clearly important that any drafting is done in close consultation with relevant parties so that agreement can be reached. One planning consultant subsequently commented that it could be just as appropriate for a developer to generate the first draft at least.
6.18 Within the local authority, it was considered best practice that the planning team led the process, with support from the in-house legal team where necessary (for example, in relation to Section 75 agreements).
Incentives, penalties and charges
6.19 For the developer and any agents acting on their behalf, the use of processing agreements has a clear appeal as it reduces uncertainty and provides a timeline to assist with forward planning and scheduling of activities. However, there were some concerns that, since processing agreements would be a voluntary activity, there would be limited incentive for the local authority to undertake this additional task. Nonetheless, most participants thought that all signatories would see benefits to using such an approach and that successful use of the approach would encourage wider adoption of the approach over time.
6.20 Once agreed, there is a clear incentive for the developer to meet the terms of the agreement as delays and uncertainty are costly and inhibit forward planning. For the local authorities, however, there was seen to be a potential need for incentives to ensure that they meet the terms of the agreement. In order to encourage usage and subsequent adherence to the timetable, it was suggested that the use and success of processing agreements might be monitored and published as part of the planning performance statistics. This would serve to highlight areas of strong and weak performance in this area. The option of financial penalties for defaulting on the agreement was also discussed, but this was seen undesirable as it would complicate the agreement and result in greater legal input to the process. In addition, if there was a financial penalty on the local authority for non-compliance, this would be likely to dissuade them from adopting this approach, given its voluntary nature.
6.21 More generally, although the issue of fees was beyond the scope of this research, the potential for front-loading of planning fees was raised and there was general support for the idea. Local authority representatives made the point that the fee income that they currently generate through planning applications bears no relation to the costs to the authority or the timing of their inputs. Upfront charging (of perhaps a third or a half of the fee) was not expected to have a deterrent effect and would provide for a flow of income to the local authorities which better reflects the timing of their inputs.
6.22 At present, the local authority can be required to invest considerable resources in pre-application discussions and (particularly in the current economic climate) may see no fee income for a considerable length of time. In a significant number of cases, if the application is not lodged, the local planning authority ( LPA) may get no income. Experience in England seems to suggest that non-refundable pre-application charging would not deter applications, but the workshop participants stressed that a clear and transparent approach to charging was essential.
6.23 The template that was discussed at the workshop had been developed in spreadsheet format, using Microsoft Excel. There was discussion as to whether this was an appropriate format and, notwithstanding some minor concerns over text editing within and printing from Excel, this format was considered acceptable. Use of Excel offered a number of advantages in that separate sheets within a single document could be used to capture different categories of information, whilst still allowing the user to switch easily between them. By contrast, a Word document could quickly become unwieldy and harder to navigate around.
6.24 The option of using drop-down menus to help in completing the forms was discussed, but on balance this was felt to limit the flexibility of the document in that it would be harder to edit. In addition, there was felt to be some risk that if there was a 'shopping list' of all possible requirements, the temptation might be to select everything, thereby placing additional and possibly unnecessary information requests on developers. According to the Killian Pretty consultation document 26 this appears to have been the experience in England, as a consequence of the checklists issued with the English Guidance on the validation of planning applications.
6.25 The template could (for the most part) easily be transferred into a Word document if this was considered easier to use or more accessible. The only exception is the Gantt chart, which would be much harder to produce in Word format. Alternatively, there are other proprietary software products that could be used for aspects of the template. In particular, there are a number of project management software products that could be used for the Gantt chart element. 27 Alternatively, a tailor-made software package could be designed specifically for this purpose, but the drawback would be that this would be more costly and would restrict usage to those organisations who had access to the software. On balance, the use of Excel (or potentially Word) has the benefit of simplicity and easy implementation and is the best solution, at least initially. Ideally, the format should be standard across the country, although it would be difficult to control for local tailoring of the template.
Wider use of the template
6.26 One of the workshop attendees suggested that many of the elements of the template could be used more widely and not just in the processing agreement context. We agree that elements of the template could be used in isolation and without the sheet for signatures. This would make the template adaptable for smaller applications, and indeed, in situations where an agreement approach is not favoured.
The revised template
6.27 On the basis of the comments received at the workshop, the draft template was revised. The amended model is presented at Appendix 3. The checklist for determining whether a processing agreement is appropriate has been taken out of the template itself and is presented separately, at Appendix 2, in the form of a flowchart.
6.28 Processing agreements represent a collaborative project management process for complex development proposals. They are not needed for every major proposal, because of the time commitment involved, which means that they are resource-intensive and that the benefits will only outweigh the costs for more complex projects. In our view, processing agreements are most appropriate for:
- major complex projects e.g. major urban expansion/regeneration projects
- projects which have unique or unusual characteristics
- projects which are likely to take longer than the 2/4 month period
- projects where there is a desire to shape the outcome through community and other consultation
6.29 The key principles are:
- Keep agreements as simple as possible
- Recognise that the new Planning Act and its secondary legislation has some new features to be considered.
6.30 Scotland needs a bespoke system, tailored to fit the new processes of pre-application community consultation. In the case of major housing sites, that means that the processing agreement must recognise the role of pre-application community consultation in design issues. We would also advise involving the statutory consultees in the process from the outset.
6.31 All of this suggests that processing agreements need to be drafted early and might even include the pre-application consultation process, as well as any subsequent community engagement - the English guidance suggests that ' PPAs are an ideal opportunity to structure…community engagement' .28 Processing agreements also need to fit with Environmental Impact Assessment processes - particularly for major renewables and other energy and infrastructure projects.
6.32 The value of using a processing agreement approach is clear, at least for major developments. The only concern is that local authorities and others may be deterred from entering into them because they are perceived to be resource hungry. The main reason that they are likely to take time to draft and agree is because people have concerns about committing themselves to a specific timetable. The timetable and the wording of the agreement becomes the focus of extended discussions.
6.33 Processing agreements are not compulsory under the new legislation and the only real penalties that we can envisage being acceptable to planning authorities are the recording of non adherence to the agreed or revised agreed timetable, regardless of which party defaulted.
6.34 The new Planning Act is very prescriptive about the events which will precede the submission of a planning application, and sets a time frame for them. This creates an opportunity to make the pre-application period a really effective component of the overall process. In that period, a processing agreement - or a project management plan, if that seems more appropriate - can be set up for all major developments.