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Verdict may force ministers to act

Planning law change likely after landmark ruling

Gary McGovern
Gary McGovern: 

A landmark ruling in the courts will add further pressure on the Scottish government to change planning rules which require developers to pay towards local infrastructure such as schools and roads.

Ministers have already indicated they will introduce legislation where councils intend to impose such a levy on developers as a condition for securing planning consent.

A verdict in a case involving Aberdeen City and Shire planning authority will highlight the issue and experts say it may force the hands of ministers.

Developers have complained that councils impose such stipulations even when their schemes have limited or minimal impact on local services.

There are concerns within local government, however, that being denied this contribution from developers will affect their budgets.

The Supreme Court has judged in favour of Elsick Development Company against Aberdeen City and Shire planning authority in an application to build 4,000 houses with commercial, retail and community facilities at Elsick, near Stonehaven.

The Court found that the local authority had no powers to compel Elsick to make a financial contribution to a pooled fund to be spent on infrastructure as a condition of the planning approval. 

Elsick argued that the local authority was acting contrary to the guidance of Scottish Ministers on planning obligations and that the contribution they were being asked to make to the pooled fund was out of all proportion to the demands its development would make on the local infrastructure.

Lord Hodge in dismissing the local authority’s appeal against an earlier decision by the Inner House, said: “If planning authorities in Scotland wish to establish a local development land levy in order to facilitate development, legislation is needed to empower them to do so.”

Planning specialist at legal firm Pinsent Masons, Gary McGovern, said: “This was a high profile and important case in a financial sense. 

“On the one hand it has the potential to affect the scale of contributions developers are liable to pay from a range of developments across the authority area, and on the other, to curtail the monies received by the authority to invest in strategic transport infrastructure interventions.

“In this case, the impact of the development on the infrastructure for which the contributions were sought was trivial and too remote to be a relevant to the development in question and form the basis of a planning obligation. This echoes many previous UK court decisions on the scope of planning obligations. 

“The outcome had to some extent been pre-empted by the Scottish Government’s clear signal of intent to include a power on the face of the imminent Planning Bill enabling the introduction of an infrastructure levy in Scotland.

“In this regard, the Scottish Government will note the Supreme Court found that if there are seen to be merits to a “local land development levy” system, legislation is required to implement such a system, as we have seen already in England and Wales in the form of the Community Infrastructure Levy.”

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