The Value of Planning Agreements

Graham U’ren FRTPIDundas and Wilson CS LLPApril 2008

Outline

1. The Aims and approach of the 2007 Study

2. General Results3. Affordable housing contributions4. Forecasts5. Towards future policy and practice

• “Review of Scottish Government Policy and Guidance on Developer Contributions - An Assessment of the Value of Planning Agreements”

• Dundas and Wilson and Bidwells• Unpublished - completed December 2007• AIMS – to quantify benefits received 2004-7

in different categories- to forecast revenues to 2010

• Additional objectives inc. assessing trends and best practice

The Aims and Approach of the 2007 Study (1)

• Stage One survey of 34 planning authorities• Questionnaire on practice• Table of all cases 2004-07• Response rate 82%• Sample agreements

• Stage Two detailed sample survey• Selection of 11 representative authorities

• Cash contributions – different categories• Valuations – in-kind contributions• Valuations – Affordable housing and alternative methods• Forecasts

The Aims and Approach of the 2007 Study (2)

The Aims and Approach of the 2007 Study (3)

The scope of contributions to planning local/planning authorities through legal agreements

• Section 75 T&CP (S) Act 1997• Section 69 LG (S) Act 1973• Section 48 Roads (S) Act 1984

Number of Agreements - 3 years• 28 PAs (survey) 871• 6 PAs (estimate) 150 1021• (Sc Borders/Edinburgh/Glasgow 462)• (Aberdeenshire 27)

Significant permissions linked to Agreements• 2004/51.7% Housing 11%• 2005/63.3% 18%• 2006/73.6% 17%

General Results (1)

Number of Contributions• 2004/5 295• 2005/6 440• 2006/7 451 1263• (Sc Borders/Edinburgh/Glasgow 543)• (Aberdeenshire 137)

Direct and In-kind Contributions• 2004/5250 45• 2005/6370 70• 2006/7398 1058 53 205

General Results (2)

Value of Contributions (3 years)

• Respondents - Direct financial £ 86.6m• Respondents – In-Kind 30.0m• Non Respondents – Direct 15.5m• Non Respondents – In-Kind 8.5m• Estimate of non valued In-Kind 18.5m

• TOTAL Value 2004/07 £159.1m

General Results (3)

What the results do not include

• Agreements entered before 2004/5• Contributions following suspensive conditions• One off contributions without completing an

agreement• Contributions to Ministers under the Roads

Act• Contributions following Electricity Act

consents

General Results (4)

Categories of benefits

Type No. Direct In-Kind• Affordable housing 150 £ 6.9m £25.3m• Roads/Infrastructure 191 £28.4m £ 2.1m• Recreation 286 £13.3m £ 1.2m• Public Transport 168 £ 6.1m £ 1.0m• Education 139 £18.8m £ 0.0m• Community Facilities 59 £ 5.4m £

0.03m• Open space 75 £ 4.3m £ 0.2m• Rest 195 £ 3.3m £ 0.2m

General Results (5)

Affordable housing contributions (1)

The policy agenda

• Government guidance context• Significant policy variations • LHS variations• Direct payments are generally

commuted sum payments in lieu of units provided by developers

Affordable housing contributions (2)

In kind contributions

• On-site and Off-site provision• In-kind, on site contributions worth

£25.33m:- • 120 units (£19.25m), and • 79 serviced plots for RSLs• Market value assessment, and • Alternative discounted price approach

Forecasts

• Projection 1 – Trend based for responding authorities, omitting major developments (Ravenscraig; Kirkintilloch) - £91m

• Projection 2 – Trend based for all authorities, with assumptions for non respondents - £143m

• Projection 3 – Trend based for all authorities with allowance for known major developments (Shawfair; West Lothian Core Areas) - £167m

Towards future policy and practice (1)

Changing Statutory and Policy Context

• Amendments to Section 75 in the 2006 Act

• “Planning Obligations”• Draft SPP3• Firm Foundations• PGS > Community Inf. Levy (England)

Towards future policy and practice (2)

Practice issues from the study

• Agreed and Consistent methodology• Conventions for different benefits, especially

affordable housing• Proportionate use• Resources• Development plan policies and LHS• Formula based policies• Monitoring and Accounting (inc. other modes of

contribution)

Graham U’rengraham.u’ren@dundas-wilson.com0131 200 7627