UK: Planning (Scotland) Act 2006 - The Last Significant Stage

Last Updated: 29 June 2010
Article by Murray Shaw

Since the Planning (Scotland) Act was passed back in 2006 we have seen the progressive implementation of the Act. Most of the significant changes came into effect in August 2009. The process of implementation has taken place against the background of very changed economic perspective which is probably of most significance in relation to issue of planning gain. The last major area of the Act yet to be implemented are those which vary Section 75 Agreements (the means by which planning gain arrangements are often documented) and Good Neighbour Agreements. A consultation paper has now been produced dealing with both of these.

Revised Circular on Planning Agreements

At the start of 2010 the Scottish Government published a revised Circular on Planning Agreements (Circular 1/2010). This Circular rehearsed and slightly revised the guidance regarding the tests applicable to planning gain and developer contributions [Click here to view the New Planning Gain but Continuing Financial Pain Article] but made clear that it dealt with the legislation as it was then enacted. It is not entirely clear whether this Circular will be further revised once the final provisions of the 2006 Act are implemented.

Underlying the whole area of planning gain are of course the difficulties in funding infrastructure or other works necessary to allow significant developments to go ahead in a changed economic climate [Click here to view the Planning Gain – What Next? Article]. Both sides of the development industry would readily agree that this is probably THE major issue in Scotland and indeed in England where the Community Infrastructure Levy is in the course of implementation, though that process has not been as smooth as had been anticipated. The new Government has made clear that significant cuts in public spending are essential given the economic climate. It therefore remains to be seen how this issue will be tackled. It is not however an issue which the consultation paper seeks to address.

Changes to section 75 Agreements

Section 75 Agreements have been part of the architecture in planning for some significant time. The 2006 Act however proposed significant changes to these including further provisions in relation to what are now to be termed "planning obligations". Amongst the key changes are unilateral planning obligations and drafting which specifically provides what planning obligations may relate to. In particular planning obligations can (in terms of the legislation) require operations or activities to be carried out on or over land, to require land to be used in a particular way, to require payment of a specific amount or an amount determined in accordance with the planning obligation, providing for the payment of periodical sums either indefinitely or for specified periods and for such other provisions as may be incidental thereto. Specifically the new provisions also allow local authorities to enter land to remedy any failure to carry out operations required by a planning obligation and to recover the costs of so doing from any party against whom the obligation is enforceable. The new provisions also make clear that the owner of land does not cease to be liable in respect of the planning obligation simply by cessation of that ownership. It appears going forward that clear drafting will be necessary to deal with the issue of ongoing liability.

Modification and Discharge of planning obligations

Possibly the most significant change relates to modification and discharge of planning obligations. Unlike in England up until now it has not been possible to seek to modify or discharge a planning obligation other than by way of agreement. In England an application to the Lands Tribunal is possible. The new drafting allows for a party against whom a planning obligation is enforceable to apply to the planning authority to either discharge or modify the relevant obligation. What is not so clear is whether these provisions apply to Section 75 Agreements which were put in place before this legislation – "old style" Agreements. There seems to be no sound policy reason why not. It is understood the Government intends they should. Neither the drafting of the Act nor this consultation paper makes that clear.

The authority in response to a valid application can discharge the obligation, determine it should continue to have effect or continue to have effect subject to the modifications proposed to them. The legislation does not appear to permit the local authority to propose alternative modifications though no doubt this might be a consequence of a process of negotiation/or discussion in relation to any such application made. One difficulty however in such a process may be the ability to bind or bring into the discussion other parties who have an interest in the relevant obligation. In the event however that no agreement is reached the party who has applied to the local authority can appeal to the Scottish Ministers in a process akin to that which relates to appeals to them in respect of major applications.

The consultation paper contains a draft set of regulations intended to deal with these changes insofar as further subsidiary legislation is required. The draft regulations are in fact largely concerned with what is to happen in the event that an application is made to the planning authority to vary or discharge a planning obligation and no agreement is reached meaning an appeal is necessary. Most of the other changes will simply take effect once the relevant provisions in the Act take effect.

Little guidance is given in the consultation paper about the criteria which should be applied either by the planning authority or on appeal in deciding whether or not a discharge or modification of a planning obligation is appropriate. In some cases it may be self evident that a change is appropriate. For example if a property has been built on agricultural land some considerable time ago subject to an occupancy restriction, it may well be appropriate for that condition to be discharged now given the very significant changes which have taken place in agriculture over the last 20 to 25 years (including in particular the reduction in the number of people that are required to work on a farm or farming unit). That assumes of course that an application to vary such an agreement is competent. In other cases it will be a lot less clear – in particular if a planning permission was granted based upon a particular restriction in the fairly recent past should that restriction be lifted or restricted? It seems likely that a compelling case would have to be made to result in that happening. It may be that the Scottish Government will come out with further guidance in relation to the relevant criteria.

Good Neighbour Agreement

The legislative provisions in relation to planning obligations introduced a new form of Planning Agreement known as a Good Neighbour Agreement. This was subject only to limited consultation before the legislation was passed. In effect a Good Neighbour Agreement is an agreement entered into with a community body "governing operations or activities relating to the development or use of land either permanently or during such period as may be specified in the Agreement".

It is not to be entered into with specific individuals and the legislation includes a definition of a community body.

There were some concerns as to the scope of Good Neighbour Agreements and how often they would be required. The consultation paper suggests that in the past there have been "a small number of developments where agreements similar in effect to the proposed GNA's have been entered into outside the planning system". The inference appears to be that going forward therefore they will not be commonly used. There have been suggestions that some authorities consider they may become "normal". The consultation papers also makes clear that the legislative framework is there for "voluntary" agreements – the word "voluntary" is emphasised. Again the inference appears to be that they will not be common. Again helpfully the consultation paper makes clear that they are not intended to secure the provision of infrastructure or community benefits – indeed the legislation precludes the use of Good Neighbour Agreements to secure financial payments.

The regulations in relation to Good Neighbour Agreements again really relate to the "appeal" process in relation to them (it is possible to apply to vary a Good Neighbour Agreement in a way similar to that concerned with planning obligations).

Summary

The consultation paper is therefore in effect the last step in bringing into play the provisions of the 2006 Act. It seems likely that these provisions will become effective in the autumn of 2010. The ability to apply to vary a planning obligation will be welcome. Equally the ability to put in place a unilateral planning obligation may be helpful, albeit it is suggested in limited circumstances.

The fundamental issue however remains the same namely the ability in Scotland to fund the works necessary to allow development to take place. While bringing the provisions in relation to planning agreements up to date is certainly helpful, that in itself does not address the underlying and fundamental issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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