Circular 1/2010 was published in January 2010 following significant stakeholder involvement from both the private and public sector. It  replaces Circular 12/1996, which was considerably out of date and will be of importance to all involved in the planning system. The Circular sets out circumstances where a planning agreement should be used, increasing transparency and promoting greater efficiency in their use. It focuses on Section 75 Agreements under the existing Town and Country Planning (Scotland) Act 1997.

Five Policy Tests

The Circular states that planning agreements should only be sought where they meet all of the following tests:-

1. Necessity

This is now clearly set out as a requirement and a Section 75 Agreement may only be entered where the restriction or regulation cannot be achieved by the use of a planning condition.

2. Planning Purpose

Planning agreements must serve a planning purpose related to the use and development of land.  Circular 1/2010 provides detailed guidance on the assessment of “planning purpose”. The assessment of whether a Section 75 Agreement serves a planning purpose is to be based “primarily” on the development plan and any associated supplementary guidance.

3. Relationship to Proposed Development

Planning agreements are to relate to the proposed development and there must be a clear link between the development proposed and any mitigation offered by the developer.

4. Scale and Kind

Any contributions required to mitigate a development must always be proportionate to the size and scale of the proposed development.

5. Reasonableness

Any obligation required by a planning agreement must be “so directly related to the regulation of the proposed development that it should not be permitted without it.” 

The Development Plan and Supplementary Guidance

The Circular requires that planning authorities include policies on the use of planning agreements within development plans. In drafting development plans and supplementary guidance, planning authorities are now required to liaise with the infrastructure providers, local authority departments and other consultees to assess infrastructure requirements and funding implications and timescales for the implementation of such infrastructure.  The development plan must detail specific “items” for which contributions will be required and the circumstances under which such a requirement will arise.

Supplementary guidance will go further and will require to set out the methods of and exact levels of contributions sought from developers in particular circumstances.  The Circular provides that standard charges and formulae should be set out in a way which allows land owners and developers to predict the “size and types of commitments likely to be sought.”  Supplementary Guidance should include how monies will be held and used and returned.

Development Management

A planning authority must now notify the developer as early as possible in the application process as to whether an agreement is likely to be required, and its likely scope.  Heads of terms should, where possible, be concluded at as early a stage in the application process as possible.  It is suggested that this should be resolved at the pre-application discussion stage.  Moreover, the negotiation of heads of terms must take as its basis the infrastructure requirements detailed in the development plan and supplementary guidance, allowing for increased certainty in the process.  Concluded heads of terms should be as detailed as possible and expressly refer to the development plan policy and/or supplementary guidance on which it is based. 

The planning authority must notify the applicant as soon as possible as to whether it is minded to grant planning permission subject to an agreement being concluded. The decision, when issued, should be accompanied by a note of the likely terms of the agreement, in order that it can be finalised as quickly as possible thereafter.

The Circular also allows for the delegation to a planning officer of the negotiation of a planning agreement, for certain planning applications. 

In order to speed up the process, the Circular recommends finalising an agreement prior to the granting of planning permission, including a clause providing that the agreement will only take effect should the permission be granted.

Publicity

A summary of the terms of all concluded Section 75 Agreements is to be recorded in a register of applications kept by each planning authority. 

Conclusion

This Circular should assist in establishing a more efficient and transparent system for the negotiation and finalisation of planning agreements. Whilst there is no change to the existing legal framework at this time, the shift in emphasis towards the development plan and supplementary guidance as tools for underpinning the use of planning agreements is an important policy development. 

For further information on the issues raised in this ezine, please contact Alastair McKie, Cecilia O'Connell, Karen Nicol or your usual contact within the Planning Team.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.