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5 Costs of Planning Reforms

Introduction and Overview

5.1 The Scottish Government is committed to changes to development management. These changes are concerned specifically with making the processes around planning applications fit for purpose and responsive to different types of development proposal. They are also concerned with improving efficiency in determining planning applications and improving public involvement in the consideration of proposals requiring planning permission.

5.2 The primary legislation to achieve these changes was in the Planning etc. (Scotland) Act 2006 and the detail of the changes were consulted on in a consultation paper of January 2008 "Development Management" and the final decisions on the detail of the changes which was unknown at the time of this study will be the subject of secondary legislation and guidance.

5.3 Although the detail of the secondary legislation is not known, it is possible to consider broadly whether the scope of the changes are likely to affect the costs of processing planning applications and this is the subject of this section.

5.4 Our approach has been to consider changes from the bottom up, benchmark these against experience in England and Wales where appropriate and to consult with authorities especially through the second seminar for this study. This is because most of the afternoon of the second seminar was concerned with this issue. Some specific evidence on cost implications was also submitted by authorities during the study process.

5.5 The seminars revealed that the major concern in relation to additional costs relates to neighbour notification, with other concerns relating to proposals for enhanced scrutiny and processing agreements. Comments on other proposals suggest that while there may be concerns about the adjustment process, the long term effect on costs is cumulative. This is largely a consequence of the implied requirements from the measures for better quality service which authorities, almost universally, interpret as requiring additional resources.

Neighbour notifications and publicity for applications

5.6 Under the 2006 Act, responsibility for neighbour notification passes from applicant to the planning authority. The planning authority will have to notify neighbours from 5 days of the date when the application was valid. It is currently proposed that neighbours are those within 20 metres or coterminous to the site. The overall requirement is similar to provisions in England where IT systems and GIS typically are now able to make these notifications at relatively low cost on an automated basis using mostly standard post. Typically in England the staff costs of notification now add around 5% or £25 to overall application costs on average. Advertising costs, where incurred, are additional to this and vary significantly. This figure should however be treated with caution as it relates to a mature system that has evolved over many years as part of the administration of applications. It does not reflect the costs of set up or the necessary learning phase.

5.7 As part of this study one larger, urban Scottish authority has supplied to us an assessment of the anticipated additional costs of assuming responsibility for neighbour notification. These comprise a mix of set up costs and ongoing administrative costs. Their assessment is summarised below and related to the financial year 2003/4. It involves a number of steps as follows.

• To obtain an estimate of the number of neighbours who would require to be notified in the course of a year, a sample of applications submitted during the period April - December 2003 were examined and then grossed up to represent the numbers given in the (then) Scottish Executive return of decisions taken during the period 1 April 2003 to 31 March 2004.
• The first assessment is based on development types 1, 3a, 3b, 4a, 4b, 5a, 5b, 9 and 9a - a basis comparable to existing notification requirements placed on applicants. For development types 3a, 4a, 5a, and 9 there were small numbers of items in the basic sample so additional samples were taken from applications submitted during 2003.

5.8 A second assessment was made based on a possible extension of notification procedures to include Listed Building Consents and Conservation Area Consents (development type 6) and Advertisement Consents (development type 7).

• The calculations are based on continuation of the then current regulations requiring notification of both the owner and the occupier of domestic properties and also with the addition of the lessee of non-domestic properties. No real information was available to obtain mean numbers of neighbours by domestic and non-domestic property types, so a factor of 2.2 was applied based on observation from the sample survey of property types in areas where such applications commonly occurred.
• Based on current regulations, the Council would have issued notifications to 55,844 properties. Applying the 2 domestic and 3 non-domestic multipliers, this gives an annual total of 119,975 individual neighbour notification letters or 2307 per week.
• Adding the extra types of consents which could be notified would increase these totals to 86,746 properties and 187,959 individual neighbour notification letters or 3,615 per week.
• This compares with an average of 540 items despatched each week (range: 360 to 745) in respect of acknowledgement of applications, representations and notification of decisions to applicants and people who submitted representations.

Assessment 1: based on current notification requirements

• In terms of staffing some of the activities which will need to be done were thought to be of a technical nature, e.g. mapping the boundary of an application site onto a GIS property database and then establishing which properties are within specified distances. Other tasks are more administrative in character, e.g. printing standard letters and preparing them for posting. Supervision will also be required for these additional staff as will a need to handle queries, complaints, etc. from people who receive notifications, and from some who have not. The assessed volume of work leads to the staffing estimate of a new team comprising one Chief Technician, two Technicians and two Support Assistants which would have gross annual salary costs of approximately £132,435 per annum. Generalised building and other indirect staff related costs could amount to another £78,999. A total of £211, 434 staff costs.
• Postage (including signed-for service), stationery and advertising costs (where no building on a neighbouring plot of land and owner not identifiable) could amount to an additional £223,785. This assumes a minimum additional IT charge based on the current software used within the Council already incorporating routines used in England for neighbour notification. Thus, it is assumed that it could define potential neighbours to a proposed development and then to generate letters to them without major software development costs.
• Adding staff costs to costs of supplies and software, a total cost to the Council in 2003-04 could have been in the order of £435,219. With approximately 4650 applications per annum (including LBC, CAC and Advertisement Consents) requiring to be notified to neighbours, the average a notification cost of approximately £ 93.57 per application would be incurred.

5.9 A local authority working group set up to look at neighbour notification costs arrived at a figure of £75 per application.

5.10 Our general conclusion is that the magnitude of these costs estimate is correct in the context of the establishment of a new system and there will be set up/activation fees from IT suppliers and additional costs for postage and supervision relative to present arrangements. Nevertheless, a more streamlined approach closer to that adopted in England may be possible over the longer term. By comparison with the envisaged Scottish approach costed above, this would involve a lower quality approach using automated procedures, address databases, standard post and a default position in which letters may be sent to the "occupier" rather than a named individual.

5.11 Our best assumption is that the figure of £75 is accurate for the system as currently envisaged by authorities in Scotland. However, if it were acceptable to adopt a lower quality approach then ongoing costs will be similar to England and represent about 5% of costs, thus justifying a 5% increase in fees. Based on a typical average bottom up processing cost in Scotland of £500, this would mean additional costs of about £25 per application.

Enhanced scrutiny

5.12 The 2006 Act made provision for:

• Pre-application consultation with local communities;
• Pre-determination hearings;
• Decisions by full council; and
• Notification to ministers.

5.13 Most authorities suggested that the first of these two items that could increase costs while, the second two would have only modest effects. However, there is also a wider concern that initially resources will need to be devoted to providing advice in relation to the new provisions and to respond to community representations which are likely to increase as a result.

5.14 In relation to pre-application consultation the Act requires applicants in relation to prescribed development types, not yet defined, to give notice to the planning authority that an application will be submitted at least 12 weeks in advance of submission, giving details of the proposal, including site plans. The purpose of this is to allow the planning authority to consider the application and specify additional consultation over and above that prescribed by regulation. Applicants must also submit a pre-application consultation report with their applications that must relate to the proposed development that relates to the notice submitted at least 12 weeks earlier.

5.15 At the seminars with planning authorities it was felt that the impact on resources would depend on the detailed regulations which would prescribe thresholds and the forms of submissions. It was also noted that there would be significant variation across local authorities depending on the number of major applications received above the thresholds. At the same time in terms of identifying 'major applications' it was suggested that there might be scope to vary this across local authorities, depending on context. For example a lower threshold might be appropriate in rural areas, where a smaller development would have a more significant impact.

5.16 For cases falling above the threshold, the main areas of additional workload for authorities were thought to be for processing the new notices and identifying consultees and checking compliance between applications and notices. There is scope for authorities to be asked to provide a screening opinion.

5.17 In practice, the existence of pre-application would be checked as part of the process of validating applications, with applications rejected if they did not comply with requirements. Overall the major concern of authorities is with the need for and costs of giving a formal screening opinion. This will depend on the clarity of the thresholds and the number of requests.

5.18 We suspect that as long as the thresholds are clear, there should be relatively few formal requests for a screening opinion. This is because many larger applicants will be handled by agents who will be able to interpret the thresholds and who will become increasingly familiar with the system. We also suspect that if there are queries these may be addressed informally as part of pre-application discussions.

5.19 Where a formal opinion is sought, a few hours or even days of officer time will be required to enable a formal response to be put together. We envisage that authorities will develop standard template letters and that a recording system will be developed. This system is most likely to be combined with the growing practice of recording the outcome of pre-application discussions.

5.20 Several authorities suggested that there might be scope for a notional separate fee to accompany these applications to cover the few hours of officer time, typically averaging around £75 - £100, assuming average input of up to half a day per case.

5.21 Although the concern here is with pre-application discussions with local communities, at the seminars there was a general consensus that pre-application discussions with applicants were a significant and growing area of work, with as much as 25% of professional development management officers time being spent responding to queries across all application types. Very few authorities also felt that that they had sufficient resources to offer pre-application advice that met the expectations of applicants or the community in terms of level of officer input, timeliness and robustness of advice. There was therefore a general concern that more pre-applications requirements could compound the existing resource position because of the need for officers. This led to some participants to suggest the introduction of pre-application fees, with debates about separate fees of whether the costs should be included in the application fee, together with hybrids such as discounted application fees where a pre-application fee had been paid. Our judgement is that the increasing statutory emphasis on pre application activity provides a justification for recovering pre-application costs through fees. The balance of probabilities is that a separate fee is most likely to be representative of specific costs because not all pre-application activity leads to applications. However, the inclusion of these costs within existing fees is administratively easier.

5.22Pre-determination hearings were thought by authorities to be likely to be a significant extra cost burden, both in terms of time and money in some circumstances. Potential costs include members, staff, administration, travel and accommodation. More specific views of authorities are set out below.

• It was noted that in some cases these already occur with actual burden depending on development thresholds, but the number is likely to increase
• One authority suggested that they currently had 30-40 per year. But the overall number is considered likely to vary across authorities, depending on the nature of development coming forward, e.g. quarries, marinas, wind farms etc.
• Hearings often involve travel (in order to incorporate a site visit) which is a major cost in more decentralised areas such as the Highlands.
• Local authority procedures will also affect the number of hearings in terms of appeal triggers, e.g. departures from local plan, number of representations etc. One authority has reduced the number of hearings by increasing the trigger levels and requiring applications to meet all 4 trigger criteria (e.g. that an appeal is requested) - they now have about 6 per year. In another authority, anyone who wants to can speak as part of the committee process (rather than having a separate hearing).
• Hearings can also provide a good means of allowing officers and members to get a more rapid assimilation of the issues rather than reading through very extensive consultation responses.

5.23 Overall undoubtedly in our view there is scope for authorities to use such measures efficiently, resulting in minimal additional costs. However, this depends on their ability to ensure that they are facilitated and run using simple procedures and that there is scope to time limit the actual event.

5.24 There is of course an argument that these hearings may actually replace other processes, e.g. time spent already in gaining familiarity with the issues.

5.25 For authorities processing 30-50 of these cases a year an extra member of staff may be required to coordinate arrangements, although this role may also be absorbed by existing staff, particularly where it is part of existing practice.

Processing agreements

5.26 The general consensus of consultees was that much depends upon further guidance on how these might work and to what extent authorities will be willing to enter such an agreement.

5.27 It was generally judged that the additional costs of processing agreements would occur in their negotiation at a pre-application stage. On this basis their costs were not currently eligible to be covered by fees. Moreover, costs depend on the complexity of the agreements which cannot be known at this stage, but might comprise days of officer time. In England it was noted the Government has proposed that pre-application charges could be made to cover the costs of setting up similar agreements.

5.28 Authorities in Scotland were particularly concerned that the agreements were likely to affect applications which were currently subject to the maximum fee cap and that additional costs would represent a further subsidy of public funds or income from small business applicants and householders into larger developments. They suggested that changes to the fee cap or at least the charging of a double fee would go some way to offset these costs.

5.29 Other comments made at the seminars in relation to processing agreements included the following.

• Problems associated with their implementation and enforcement (e.g. statutory consultees). In order to make them work, it will require buy-in from all parties involved, including SEPA, Highways etc.
• The local authority is currently the only party involved in the agreements where a penalty will apply if the programme is not met - there is no 'stick' for other parties in terms of ensuring that they also meet their deadlines. It was noted however that the Scottish Government was in the process of drafting nationwide protocols that may address this to some extent.
• While authorities could see the benefits of processing agreements, it was not clear that a statutory process was the best way of implementing them.

5.30 To some extent good practice already suggests that authorities should develop clear programmes and processes for major applications in order to meet timescales. There is also a case for project management training to ensure that the methods for developing such programmes are well understood.

5.31 Overall, our judgement is that the issue is more related to cost recovery on major applications than the existence of planning agreements. Our judgement is that making a charge up front for the making of the agreement or resolving the cost recovery on the largest applications more generally would go a long way to ensuring these costs were covered across the board. However, individually negotiated fees would be required to reflect the scale and complexity of major applications.

Other reforms

5.32 Authorities were prompted on all reforms, but expressed views on the following.

• Planning permission for mezzanine floors. May incur some additional costs in terms of time and money, but will be offset by fees
• Records of handling planning applications. Unlikely to require anything significantly extra to current good practice.
• Decision notices to interested parties. Some local authorities do this already, although it is closely linked to e-planning - letters are sent referring people to the website for more information. This would not be sufficient under the new system, which is surprising considering the recent emphasis on e-planning. Some authorities send out a letter informing interested parties that a decision has been made and that they will provide copies of relevant documents upon request; it is very rare that anyone takes up this offer. The amount of information and volume of paper sent out to interested parties will increase significantly. However, it is suggested that it was rare that there are a great number of objectors. (<10% applications attract a significant number of objections).
• Additional notification to ministers for national developments. Depends on the clarity of thresholds, but applications numbers are judged likely to be low and systems may be automated to flag up these cases.
• Planning permission in principal and content. Generally it was thought that there is not much difference between this and outline applications. This was also not thought to make a huge difference in terms of processing time and it was noted that applications of this nature will be accompanied by a fee which will offset costs.
• Weekly lists. These were simply thought involve amendments to DC systems. But should be noted that advertising costs vary significantly across local authorities (£70 in Argyll to £350 in N Ayrshire, etc).
• Validation and Acknowledgement. Generally though this should be a part of current practice and if not, is part of the way practice is going anyway. Noted that new development management regulations are going to be stricter about what constitutes a valid application. However, it was noted that validation according to DM regulations is administrative only, which is contrary to current best practice, which should also involve quality testing. In terms of costs etc, it was noted that validation is already part of the fee. In England authorities are increasingly validating applications initially based on administrative checks, but subsequently having to invalidate applications at the processing stage as the deficiencies of submitted information become apparent.
• Register. No major implications. However, it was noted that whilst minor proposals such as registers might not have a major effect in terms of cost or time, the cumulative effect of several minor changes might add up to a more significant additional burden on local authorities.
• Variation of applications. It is important to establish how far this can apply before a new application should be submitted, i.e. what constitutes a material amendment? Generally thought that a variation of application implies significantly less time and cost implications than the submission of an entirely new application. However there may be implications where variations require re-consultation etc.
• Local Review Bodies. There are significant issues regarding who might carry out this process within the local authority (bias and neutrality, conflict of interest etc). There was also an issue of who would provide planning advice to the review body? (material considerations, policy interpretation etc). There could be considerable costs if this would need to be undertaken by a third party.
• Design and Access Statements. Issues over relevance, quality and consistency and resolving these with the applicants were the main issues that consumed time and costs. It was thought that the system would settle down in time.
• Other. Changes to householder rights were thought reduce total fee income, whilst leaving often more problematic and costly applications within the system. Changes to householder rights also likely to increase the burden of monitoring and enforcement.

5.33 In addition to the requirements of the new Act, it was noted that e-planning is going to have a very important resource effect. The intention is that e-planning will result in time and cost savings (as described by the National Project), but it will be very intensive to set up (scanning) will need to be bedded in dual systems - paper and electronic) and may not result in these savings in the longer term.

Key Findings

• The local authorities highlighted a number of concerns regarding the cost implications of the new planning reforms.
• The major concern in relation to planning reforms is associated with neighbour notification which was estimated to cost an additional £75 per application. However, costs could be reduced (to around £25 per application) if a system similar to that currently in place within England was introduced in Scotland.
• There was concern that increased pre-application discussions with applicants were a significant and growing area of work with as much as 25% of professional management officers' time being spent responding to queries across all application types.
• Pre-determination hearings were also thought to be likely to be a significant extra cost burden, both in terms of time and money.
• In relation to changes to processing agreements, there was concern that agreements were likely to affect applications which were currently subject to the maximum fee cap and that additional costs would represent a further subsidy of public funds or income from small business applicants and householders into larger developments. Changes to the fee cap could offset these costs.

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