To inform the Scottish Government’s review of the effectiveness of planning obligations, the Law Society of Scotland undertook a consultation which has led to a series of proposals for Government

Planning obligations, often known as “section 75 agreements” in reference to s 75 of the Town and Country Planning (Scotland) Act 1997, are an important part of the planning system. These obligations are entered into to mitigate the impacts of proposed developments. They are increasingly being used by planning authorities to support infrastructure provision required as a direct consequence of development. This includes financial contributions or in-kind provision of affordable housing, schools, and transport infrastructure.

While the existing Planning Circular (Circular 3/2012, Planning Obligations and Good Neighbour Agreements) provides advice on the scope of planning obligations and the need for compliance with five policy tests, it does not provide detailed guidance on many of the practical aspects of planning obligations which often are the subject of detailed negotiations between the parties after a “minded to grant” decision has been made.

The Scottish Government is currently reviewing the effectiveness of planning obligations (www.transformingplanning.scot/planning-reform/work-packages/), and the findings of its review will inform future policy development on infrastructure planning and delivery in Scotland.

Project work

There are a range of examples of good practice, and also variations in practice, in relation to planning obligations. The Law Society of Scotland’s Planning Law Committee considers that there may be merit in further detailed guidance to help enhance consistency and to assist in reducing delays in the process of negotiating planning obligations.

The committee therefore undertook a consultation in late 2019/early 2020, followed by a series of virtual discussion events to explore a number of practical issues. A range of topics was covered, including model and style agreements, heads of terms and processing agreements, parties to the agreement, connection to the site area, liability of parties and the enforceability of planning obligations, recording or registration, and unused contributions.

The purpose of the consultation and discussion events was to identify an evidence base to support good practice. The consultation attracted 31 responses from solicitors in private practice, solicitors and non-solicitor staff of planning authorities and organisations.

Proposals

Following the committee’s analysis of the consultation responses and events, it is clear that there is a strong evidence base for a number of proposals to be made in relation to the circular. The Society considers that if taken forward, these would improve the efficiency and transparency of the process of completing and registering planning obligations and therefore help to facilitate earlier release of planning permissions.

The committee’s findings have been reported to Scottish Government and will contribute to the review of planning obligations.

Its proposals include:

  • Model agreements and in-house styles: planning authorities should be encouraged to consult on and publish a model planning obligation, recognising the need for this to be reviewed regularly and updated as appropriate. The need for flexibility must be recognised while having regard to the model and reflecting the desired objective of efficiency. The committee suggests standard clauses be developed on a range of matters (e.g. excluding liability for former owners, ultimate owners and statutory undertakers; registration of planning obligations), the use of which would be optional, but encouraged.
  • Continuing liability for former owners (s 75C): the circular should be updated to reflect that, while the approach to this matter requires to be based on risk to the planning authority, it will generally be appropriate to exclude liability for former owners other than in relation to antecedent breaches.
  • Enforceability: the circular should be updated to reflect that it will generally be appropriate to exclude liability for bona fide purchasers of individual residential properties (with the exception of specific provisions relating to affordable housing) and any statutory undertaker who proposes to place infrastructure on a development site. The circular should reflect that it is unreasonable for a planning obligation to provide that an appropriate remedy for a material breach of the obligation is for the planning authority to be entitled to revoke the permission without compensation (other than as referred to below).
  • Recording or registration of a planning obligation: the circular should be updated to reflect that where rejected by the Keeper, the obligation may need to be amended or a new obligation entered into. Where the landowner is unwilling to amend or enter a new obligation, or has become insolvent (thus unable to do so), it is considered reasonable for the planning authority in these limited circumstances to reserve the right to revoke the planning permission without compensation.
  • Unused contributions: planning obligations should provide for unused financial contributions to be returned to the payer if not used within a particular period of time. The circular should provide guidance on the appropriate period, recognising that this will depend on the circumstances and that it will be appropriate to consider the period relative to local development plan review cycles and local planning policy.

The full paper, including proposals and analysis of the consultation responses and discussion events, is available here.

The Author

Alastair McKie, partner, Anderson Strathern LLP

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