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Publication - Guidance

Planning Circular 3/2012: Planning obligations and good neighbour agreements

Published: 14 Dec 2012
Part of:
Building, planning and design
ISBN:
9781782562917

Policy relating to planning obligations and good neighbour agreements.

21 page PDF

249.6kB

21 page PDF

249.6kB

Contents
Planning Circular 3/2012: Planning obligations and good neighbour agreements
2. PLANNING OBLIGATIONS

21 page PDF

249.6kB

2. PLANNING OBLIGATIONS

SCOPE AND LIMITATIONS

12. Planning authorities must consider each planning application on its merits and reach a decision in accordance with the terms of the development plan, unless material considerations indicate otherwise. Planning obligations have a limited, but useful, role to play in the development management process where they can be used to overcome obstacles to the grant of planning permission. In this way development can be permitted or enhanced and potentially negative impacts on land use, the environment and infrastructure can be reduced, eliminated or compensated for. Planning obligations should be agreed between the parties involved; developers should not be required to enter into a planning obligation. Where known in advance, the need for a planning obligation can usefully be set out in the development plan or as part of pre-application discussions.

13. It is not possible to indicate all circumstances in which planning obligations are appropriate. Planning authorities should take decisions based on the relevant development plan, the proposed development, and the tests set out in this circular. Where a planning obligation is considered essential, it must have a relevant planning purpose and must always be related and proportionate in scale and kind to the development in question. These principles are central to the guidance that follows.

POLICY TESTS

14. Planning obligations made under section 75 of the Town and Country Planning (Scotland) Act 1997 (as amended) should only be sought where they meet all of the following tests:

  • necessary to make the proposed development acceptable in planning terms (paragraph 15)
  • serve a planning purpose (paragraph 16) and, where it is possible to identify infrastructure provision requirements in advance, should relate to development plans
  • relate to the proposed development either as a direct consequence of the development or arising from the cumulative impact of development in the area (paragraphs 17-19)
  • fairly and reasonably relate in scale and kind to the proposed development (paragraphs 20-23)
  • be reasonable in all other respects (paragraphs 24-25)

Necessity test

15. Planning obligations or other legal agreements should not be used to require payments to resolve issues that could equally be resolved in another way. Where a planning permission cannot be granted without some restriction or regulation, and before deciding to seek a planning obligation, the planning authority should consider the following options in sequence:

i) The use of a planning condition: Planning conditions are generally preferable to a planning or legal obligation, not least as they are likely to save time and money for all concerned. The guidance contained in Circular 4/98: The Use of Conditions in Planning Permissions should be followed.

ii) The use of an alternative legal agreement: for example, an agreement made under a different statute, such as the Local Government (Scotland) Act 1973, the Countryside (Scotland) Act 1967, the Sewerage (Scotland) Act 1968, the Roads (Scotland) Act 1984 etc. A planning obligation is not necessary where the obligations for a landowner or developer may be implemented, for example, by a one-off payment towards the cost of infrastructure provision or the maintenance of open space.

There should be a presumption that this option be used where contributions are being sought for community benefits which, while desirable, do not directly serve a planning purpose. Such benefits might include, for example, provision of infrastructure which is desirable but not essential.

While it would be for a planning authority to satisfy itself that a legal agreement was required, a legal agreement made under other legislative powers would not necessarily be required to meet all the policy tests required of planning obligations.

iii) The use of a planning obligation: Planning authorities should be clear that a planning obligation is only necessary where successors in title need to be bound by the required obligation, for example where phased contributions to infrastructure are required.

Planning purpose test

16. Planning authorities should satisfy themselves that an obligation is related to the use and development of land. This judgement should be rooted primarily in the development plan 3 4. This should enable potential developers to be aware when undertaking development appraisals and in designing their proposals of the:

  • likelihood of a planning obligation being sought, and,
  • likely financial requirements of that planning obligation.

Relationship to proposed development test

17. Planning obligations must relate to the development being proposed. Where a proposed development would either; create a direct need for particular facilities, place additional requirements on infrastructure (cumulative impact) or have a damaging impact on the environment or local amenity that cannot be resolved satisfactorily through the use of planning conditions or another form of legal agreement, a planning obligation could be used provided it would clearly overcome or mitigate those identified barriers to the grant of planning permission. There should be a clear link between the development and any mitigation offered as part of the developer's contribution. In addition, when determining whether a planning obligation is required, planning authorities should take account of the existence of any other agreements or conditions relating to infrastructure provision that already apply to the development.

18. Planning obligations should not be used to extract advantages, benefits or payments from landowners or developers which are not directly related to the proposed development. The obligation should demonstrate that this test is met by specifying clearly the purpose for which any contribution is required, including the infrastructure to be provided.

19. In reaching decisions on applications for planning permission, planning authorities should attach no weight to offers made to undertake works, donate monies, or provide other incentives if these do not meet the tests contained in this circular for inclusion within an obligation. Planning authorities should also not be influenced by the absence of such offers. Authorities should bear in mind that obligations may be subsequently challenged either through an application to modify or discharge the obligation, on appeal against refusal to modify or discharge, or indeed in the Courts.

Scale and kind test

20. Planning obligations must be related in scale and kind to the proposed development. Developers may, for example, reasonably be expected to pay for, or otherwise contribute towards the provision of, infrastructure which would not have been necessary but for the development. In assessing such contributions planning authorities may take into account the cumulative impact of a number of proposed developments, and use obligations to share costs proportionately. An effect of such infrastructure investment may be to confer some wider community benefit but contributions should always be proportionate to the scale of the proposed development. Attempts to extract excessive contributions towards the costs of infrastructure or to obtain extraneous benefits are unacceptable.

21. Planning obligations should not be used to resolve existing deficiencies in infrastructure provision or to secure contributions to the achievement of wider planning objectives which are not strictly necessary to allow permission to be granted for the particular development. Situations may arise where an infrastructure problem exists prior to the submission of an application for planning permission. Where the need to improve, upgrade or replace that infrastructure does not arise directly from the proposed development then planning authorities should not seek to address this through a planning obligation. It is inappropriate to grant planning permission for a development which would demonstrably exacerbate a situation which was clearly already unsatisfactory.

22. Entering into an obligation can have financial consequences for developers and may make proposals uneconomic. Cash flow will also be affected where substantial sums of money have to be paid either before the development gets under way or at an early stage in construction. Staged or phased payments could help the overall viability and success of a project.

23. This is particularly relevant where infrastructure requires to be put in place before the development is completed, but the cost of doing so would make the development unviable. Planning authorities should give consideration to the possibility of infrastructure being funded, and development thus enabled, through other mechanisms, with costs being recovered through staged payments as development progresses.

Reasonableness test

24. Planning obligations should be reasonable in the circumstances of the particular case. The following questions should be considered:

  • is an obligation, as opposed to conditions, necessary to enable a development to go ahead? (this question should have regard to the necessity test set out in paragraph 15 above)
  • in the case of financial payments, will these contribute to the cost of providing necessary facilities required as a consequence of or in connection with the development in the near future?
  • is the requirement in the obligation so directly related to the regulation of the proposed development that it should not be permitted without it?
  • will the obligation mitigate the loss of, or the impact upon, any amenity or resource present on the site prior to the development?

25. Where the answer to any of the questions would be no, a planning obligation is generally not appropriate.

PROCESS

26. The speed, efficiency and transparency of preparing and agreeing planning obligations are essential elements in delivering a high quality planning service. Early engagement between parties and the use of pre-application discussions is strongly encouraged as is the use of processing agreements or other project management tools. Planning authorities need to consider:

  • identifying infrastructure requirements in strategic and local development plans and the potential implications for the use of planning obligations
  • more specific identification of expected contributions in Supplementary Guidance
  • the effective management of developing, negotiating and concluding planning obligations
  • clear presumption that planning obligations should only be used where they meet the policy tests set out in the Circular
  • early and appropriate identification of Heads of Terms which can then be worked into the detail of any obligations
  • drafting template or model obligations where similar circumstances are likely to be repeated
  • swifter issuing of planning permission following finalisation of planning obligations
  • monitoring to ensure that obligations are met

Public awareness of planning obligations

27. The Development Management Regulations 5 require a summary of the terms of any section 75 planning obligation to be recorded in the Register of Applications maintained by the planning authority.

Effective management of planning obligations

28. Where a planning obligation is being sought, the process of concluding the obligation is integral to the decision-making process on the grant of planning permission and should be given high priority by all parties. There should be effective cross - service management within the local authority to minimise delay and additional costs to all parties involved. Planning authorities are encouraged to use pre-application discussions with relevant agency involvement, processing agreements, other project management approaches or codes of practice in negotiating planning obligations, so as to make clear the level of service a developer can expect and the issues to be agreed at each milestone. This should help to increase transparency and the efficiency of the planning obligations process. Lengthy delays in concluding obligations are not acceptable given the adverse impact this has on delivery of sustainable economic growth and the reputation of the system.

29. Planning authorities are encouraged to identify consistent points of expertise and contact within the local authority responsible for liaison and negotiations with developers. It is important that such contacts have an effective understanding both of the requirements for planning obligations set out in the development plan and of development economics to ensure that requirements are based on an informed understanding of what a development project can reasonably be expected to bear both as a total cost and in the scheduling of payments for all obligations.

The Plan led approach

30. The development plan should be the point at which consideration of the potential need for and use of, planning obligations begins. The adoption of formal policies on the use of planning obligations is strongly encouraged. These create an opportunity to involve the local community and development industry in the process of development plan policy development, including supplementary guidance, and to clarify early the expected costs of any contributions that might be sought from developers.

31. Development plans cannot, however, anticipate every situation where the need for a planning obligation will arise. Where the potential need for an obligation emerges during the development management process, planning authorities should assess the case against the guidance in this circular and inform the applicant as soon as practicable.

Policies and Supplementary Guidance

32. In drafting development plans, planning authorities should work with infrastructure providers, other local authority departments and consultees to undertake a robust assessment of infrastructure requirements, the funding implications and the timescales involved. From this the level of provision to be delivered under planning obligations can be identified. Broad principles, including the items for which contributions will be sought and the occasions when they will be sought should be set out in the SDP or LDP, where they will have been subject to scrutiny at examination. Methods and exact levels of contributions should be included in statutory supplementary guidance.

33. Where standard charges and formulae are applied to individual developments, they should reflect the actual impacts of, and be proportionate to, the development and should comply with the general tests set out in this circular. Any obligation should be acceptable to all parties involved. Charges and formulae should be set out in a way that helps landowners and developers predict the size and types of commitments likely to be sought for specific sites or general locations prior to submitting a planning application.

34. Supplementary guidance should not be applied to the consideration of development proposals until it has been agreed formally by the authority. Planning authorities drafting supplementary planning guidance (including masterplans, development briefs, action plans, etc), should highlight constraints and describe their planning, design and environmental aspirations. Statutory supplementary guidance must be derived from the strategic or local development plan and be the subject of consultation. 6

35. Where planning authorities propose to rely on standard charges and formulae, they should include these in supplementary guidance along with information on how standard charges have been calculated, how monies will be held, how they will be used and, if applicable, how they will be returned to the developer.

36. Where a planning application is not granted because of a failure to conclude a planning obligation any appeal should consider, amongst all other relevant matters, whether or not the planning authority has highlighted potential development constraints in the development plan or relevant development briefs.

Planning obligations and development management

37. The negotiation of planning obligations should not delay unduly or unnecessarily the development project or the development management process. All parties should proceed as quickly as possible towards the resolution of the Heads of Terms in an obligation. This should occur, where possible, during pre-application discussions, so that, should an appeal be lodged, the Heads of Terms are already a matter of record. Section 35B (3) of the 1997 Act 7 requires a twelve week period for pre-application consultation for developments which are considered as National 8 or Major 9 . This, in the case of Major applications, offers an opportunity for agreement of appropriate Heads of Terms for any necessary planning obligation and for milestones to be incorporated in any processing agreement. The aim should be to proceed in accordance with previously agreed deadlines and working practices. This should facilitate an early decision on the necessity for a planning obligation, in accordance with the policy tests set out in paragraphs 15 -25 and the particular circumstances of the proposal.

38. Applicants must be advised as soon as possible that the planning authority is minded to grant planning permission subject to both parties concluding a planning obligation. By that point, it will normally already have been established whether, in principle, they would be prepared to enter into such an obligation to resolve outstanding matters, and also the likely content of the obligation. To help minimise the time taken to issue the legal agreement concerned post-decision, planning authorities that are minded to grant planning permission subject to a planning obligation should make clear the likely terms of the obligation at the date of the decision. Similarly, any report to the Council or a Committee of the Council should outline the principal components of the obligation being sought.

39. The Heads of Terms, should contain as much financial detail as possible and should make reference to policies and other material (such as standard charges and formulae) contained in the development plan. To speed up the process, planning authorities should use model obligations, clauses, or templates. Developers may wish to consider whether a unilateral obligation might be appropriate. Planning authorities should also consider draft obligations or Heads of Terms prepared by developers, rather than undertaking this work themselves. Where appropriate, planning obligations should form part of any processing agreement made in respect of a planning application. Planning authorities should confirm the agreement of relevant consultees to the Heads of Terms before entering final negotiation and concluding an obligation. To further speed up the process, planning authorities should empower officials to complete the drafting of the obligation.

40. The developer has the opportunity to conclude a planning obligation at an early stage, and before a decision is reached as to whether planning permission can be granted. To avoid any risk of being bound by its terms irrespective of the planning authority's decision, the obligation can include a clause that it would come into effect only when planning permission for the development in question is granted. This can reduce delays in the process, by removing the need to negotiate and conclude the obligation only after the authority becomes minded to grant consent.

Concluding planning obligations

41. Planning obligations should contain only those matters that are justified when considered against the tests at paragraphs 15-25 and should be restricted to specific purposes. It is not appropriate to include other matters such as conditions attached to an associated planning permission.

Registering the planning obligation

42. Where planning authorities wish the provisions of a planning obligation to be enforceable against successors in title the obligation must be registered in the Land Register of Scotland (where the property to which it relates is registered in that register) or alternatively it must be recorded in the General Register of Sasines, as appropriate.

43. Concern has been expressed about the delay, which can be several weeks, between finalising an obligation and the issue of planning permission. This will include the period where the obligation is undergoing registration or recording. The provisions of the obligation run from the date on which the obligation is registered or recorded. This means that there may be risks for planning authorities in issuing planning permission prior to such registration or recording. On receipt of an application for registration or recording, the Keeper of the Registers of Scotland will issue an acknowledgement of the date of receipt. Particular processes apply to each register but, in general, the registration or recording process will be completed when the Keeper has considered the application in full. However, the date of registration/recording remains the date set out in the Keeper's acknowledgment, even where the Keeper's final decision to register or record is taken at a later date. The planning authority may therefore consider issuing permission immediately on receipt of the Keeper's initial acknowledgement. There may be a small risk that an obligation might be returned, withdrawn or registration refused because of a technical defect, or that the land could be sold before the obligation is registered or recorded. However, there are situations where the timeous issue of planning permission can be crucial to the development proceeding. The planning authority would need to establish that the risk was minimal and acceptable.

Monitoring of planning obligations

44. Planning authorities should have mechanisms and procedures in place for confirming that infrastructure and facilities to be provided under planning obligations are delivered. Planning authorities should designate a responsible officer for this purpose.

45. When infrastructure or facilities are to be put into place as a result of planning obligations account should be taken of that provision in the course of revising development plans and local policies. Standard charges and formulae should similarly be reviewed.

Unilateral obligations

46. The revised section 75 includes provision that a person may unilaterally propose and draft a planning obligation in respect of land which they own or control. The existence of a unilateral obligation would not preclude the planning authority seeking an obligation where there were matters which the planning authority considered should be the subject of a planning obligation and such matters were not sufficiently addressed by any other obligation (including any unilateral obligation) in place. A planning authority should not, however, seek a planning obligation that would simply duplicate the terms of a unilateral obligation. While there is no statutory requirement for a person preparing a unilateral obligation to do so, early engagement and discussion with the relevant planning authority is strongly encouraged.

47. As with any other planning obligation, the relevant instrument (to which the owner of the land is party) containing a unilateral obligation may be registered in the Land Register of Scotland or recorded in the General Register of Sasines as appropriate.

48. Such registration may be undertaken by the owner of the land. Once registered the obligation is, unless it specifically provides otherwise, enforceable by the planning authority against future owners of the land. In so far as an obligation may contain negative obligations it is also enforceable, as with other planning obligations, against the tenant or occupier of the land.

Obligations imposing restrictions on the use of land or buildings

49. While the most common use of planning obligations is to ensure the provision of infrastructure to make a development acceptable in planning terms, there is a limited role for obligations in restricting the use of land or buildings.

50. Such restrictions have historically been used particularly in respect of housing in rural areas. Imposing restrictions on use are rarely appropriate and so should generally be avoided. They can be intrusive, resource-intensive, difficult to monitor and enforce and can introduce unnecessary burdens or constraints. In determining an application, it may be appropriate for the planning authority to consider the need for the development in that location, especially where there is the potential for adverse impacts. In these circumstances, it is reasonable for decision-makers to weigh the justification against the potential impacts, for example on road safety, landscape quality or natural heritage, and in such circumstances it may be appropriate for applicants to be asked to make a land management or other business case.

51. Where the authority is satisfied that an adequate case has been made, it should not be necessary to use a planning obligation as a formal mechanism to restrict occupancy or use.

Enforcement of operations required by a planning obligation

52. Section 75(7) of the 1997 Act (as amended) provides a power for planning authorities, where operations required to be carried out by a planning obligation have not been undertaken, to enter the land and carry out the operations themselves. Any expenses incurred in doing so may be recovered from the person or persons against whom the planning obligation is enforceable. Before taking any direct action the planning authority must give the person or persons a minimum of 21 days notice of their intentions.

53. A person against whom an obligation is enforceable is generally the owner of the land but may also be, depending on the obligation, a tenant or any other person who has use of the land.


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Email: Lorna Aird