Planning (Scotland) Bill (4) – Fees and Infrastructure Levy
This final update on the Planning (Scotland) Bill considers enabling powers for planning fees and introduction of an infrastructure levy. Of course the proposals are subject to amendment as the Bill passes through the Scottish Parliament.
Adequate resourcing of the planning system is a long-standing issue, exacerbated by current pressures on local authority finances. The 1997 Act provides for regulations to prescribe planning fees (the Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Regulations 2004 as amended). The regulations are periodically amended, most recently in July 2017 when there was a substantial increase in fees for many major applications. However, planning fee income does not meet the costs of delivering planning services.
The Bill provides regulations for a wider and more flexible system of fees, including scope for:
- Planning authorities to charge full or reduced fees or waive fees, within parameters established by Scottish Ministers.
- Some discretionary charging for service provision.
- Higher fees for retrospective planning applications.
- Scottish Ministers to charge fees for the discharge of their functions. This could, for example, permit fees for planning appeals.
The Policy Memorandum states that a detailed consultation will be undertaken once the reformed planning system is established following enactment of the Bill and subsequent secondary legislation. It signals an intent to move towards full cost recovery by planning authorities and some increased fees and additional charges appear to be likely in the medium term. However, the Bill does not directly address two further criticisms of the current system: that planning income should be ring-fenced to the planning service, and that any increase in fees should demonstrably be linked to improved performance be planning authorities.
Currently, the primary mechanism to secure infrastructure provision, either directly or through financial contributions, is through the use of section 75 agreements. Planning agreements have significant limitations, most notably that the need for the relevant infrastructure must arise from and be connected to the particular development. This largely precludes a strategic approach to the requiring and pooling of developer contributions and using these contributions to fund infrastructure across a wider area. This limitation was highlighted in the recent Supreme Court case of Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Company Limited  UKSC 66.
The Bill provides enabling powers to introduce an infrastructure levy in Scotland. Its broad parameters are described in the Bill and accompanying Policy Memorandum. The intention is that the levy would capture a proportion of land value uplift to fund investment in infrastructure. The levy would be payable to and spent by the local authority in whose area the development takes place, but with potential for pooling of contributions from across the local authority area or at a regional level. The Bill provides power for Scottish Ministers to make regulations detailing matters such as how a levy will be calculated, who will be liable, collection, aggregation and spending of contributions and rights of appeal.
The Bill does not require that an infrastructure levy is ever introduced. But if this does occur the devil will very much be in the detail. The Scottish Government has published research into potential options but confirms that considerable further work and consultation is required to produce a mechanism that is transparent and efficient, will spread fairly contributions towards necessary infrastructure, and will not adversely impact on development viability. This work will encompass a review of how any new levy would be integrated with section 75 agreements so as to avoid the risk of excessive contributions.
Comment on the Planning Bill
The report of the independent review panel, published in May 2016, noted that Scottish Ministers had tasked the panel with a “root and branch” review of the planning system and exploration of game-changing ideas for radical reform. Individually and cumulatively the reforms proposed in the Bill fall a considerable way short of this. Many of the reforms to development planning procedures are welcome, although unavoidably these would take some years to translate fully into more concise and focussed development plans. Changes to development management are a disparate group of targeted improvements, mostly to be welcomed but limited in scope. Introduction of an infrastructure levy would indeed be a substantial change but again much additional work will be required before the full implications, and practicality, of an infrastructure levy are apparent. In many of these areas the full implications will not be known until the Bill is passed and detailed secondary legislation produced. That said, there is much to be commended in the Bill and it should be regarded in the context of continuing Scottish Government work streams on matters such as planning policy and planning performance.