Housing Land Audit guidance: impact assessment summary

Housing Land Audit Guidance – Business and Regulatory Impact Assessment Update – December 2024

Introduction

Non-statutory, technical guidance to support the preparation of Housing Land Audits is being updated to enable better monitoring, inform decisions and support delivery.

The updated HLA Guidance will support implementation of NPF4 policy, which was subject to extensive consultation and Parliamentary scrutiny as well as the development of a comprehensive Integrated Impact Assessment. A full BRIA was undertaken to support development of NPF4, including Policy 16 Quality Homes, which requires planning authorities to use annual HLAs to monitor delivery of housing land. This BRIA update supports the development of the update to the HLA guidance.

Executive summary

Issue and why it needs to be addressed

NPF4 Policy 16, Quality Homes, requires planning authorities to prepare Housing Land Audits (HLAs). NPF4 was approved by Parliament and adopted by the Scottish Ministers on 13 February 2023. HLAs are not a new feature of the planning system, but there is strong stakeholder appetite for updated guidance on preparing HLAs.

Intended outcomes

Non-statutory, technical guidance to support the preparation of Housing Land Audits will enable better monitoring, inform decisions and support delivery.

Options

A decision not to update HLA guidance would undermine stakeholder confidence in implementing NPF4.

Updated guidance would improve consistency across Scotland in HLA preparation, offering cross-sector benefits.

Sectors affected

Local and national government, business (particularly the housebuilding industry, and landowners).

Engagement completed, ongoing and planned

Extensive public consultation during the preparation of NPF4.

Targeted stakeholder engagement in the preparation of the updated HLA guidance.

Anticipated impacts (intended and unintended, positive and negative) and mitigating actions

Some planning authorities will need to change their approach to preparing an HLA, including in some cases collecting additional information.

There will be improved consistency at the national scale of evidence on availability of land for housing development

There will be improved consistency for development businesses operating across Scotland

Enforcement/ compliance

Planning authorities are statutorily required to take NPF4 into account when preparing their local development plans and when determining planning applications.

Recommendations/ implementation plans

Recommend updating HLA Guidance.

Evaluation and monitoring of implementation/ review of BRIA

Proportionate use of existing channels of stakeholder communication to monitor implementation and response to the updated guidance.

Section 1: Background, aims and options

Background to policy issue

NPF4 Policy 16 Quality Homes requires planning authorities to complete annual HLAs to monitor the delivery of housing land. HLAs track the past completion of new homes and estimate the programming of future build out. They are used to inform local development plan preparation and decision making on planning applications. Current guidance on preparing HLAs was published in Planning Advice Note 2/2010 and supported planning policy on housing in Scottish Planning Policy (SPP) 2010.

Updated guidance is required to take into account the updated context for HLAs as framed by the Planning (Scotland) Act 2019 and National Planning Framework 4 (NPF4), in terms of new development plan procedures and quality homes policy.

Purpose/ aim of action and desired effect

HLAs are an existing mechanism that monitor housing land through tracking the past completion of new homes and estimating the programming of future build out. Current guidance on HLAs was published in Planning Advice Note 2/2010 and supported planning policy on housing in Scottish Planning Policy (SPP) 2010.

An update to guidance is necessary to enable better monitoring, inform decisions and support delivery. Research was published in 2019 that assessed HLAs from across Scotland for their consistency, compliance with guidance and potential for standardisation. The research found issues around consistency, engagement and reporting and indicated that this creates uncertainty and the possibility of different outcomes. The Planning (Scotland) Act 2019 and NPF4 also provide a significantly different context for HLAs in terms of new development plan procedures and quality homes policy. The declaration of the housing emergency has further increased the demand for improved evidence, particularly the ability to collate information at a national level.

Options

Option 1: Do nothing

Commitments to an update to the HLA guidance have been set out in NPF4 Delivery Programmes, the Ministerial / Chief Planner letter on housing (June 2024) and the Programme for Government 2024. These indicated we would promote consistent monitoring and seek to secure support from across sectors for their roll out. We know that there is stakeholder appetite for updated guidance. Doing nothing would fail to meet stakeholder expectations, and compromise the effective implementation of NPF4 Policy 16.

Option 2: Preferred option – developing guidance

Updated guidance, developed with input from stakeholders, will support effective implementation of NPF4 Policy 16 Quality Homes. The guidance will enable better monitoring, inform decisions and support delivery of housing land.

Sectors/ Groups affected

Businesses

NPF4 is a strategic document and its policies are likely to impact on all business

sectors across Scotland who are likely, in the future, to engage with the planning

system through the submission of a planning application or commenting on

applications that affect them. It may also influence businesses’ decision-making on

what they do with their land.

The HLA Guidance will have particular impacts on the housebuilding industry and landowners.

Planning authorities

Planning authorities are affected in that they are required to take account of NPF4 in preparing their local development plans, and consequentially, prepare annual HLAs.

The HLA Guidance update is designed to support planning authorities in implementing the policy requirement of NPF4 to prepare annual HLAs.

Further information on the sectors and groups affected by NPF4 policy is contained

within the full NPF4 BRIA.

Section 2: Engagement and information gathering

Within Government

The NPF4 IIA sets out the wide-ranging approach to government consultation in preparation of NPF4. Officials from Scottish Government’s Planning, Architecture and Regeneration Directorate have progressed the HLA guidance with officials in Digital Directorate, and worked closely with colleagues in Housing when developing NPF4 policy 16.

Public Consultation on NPF4

Between January and April 2020 the Scottish Government held an open call for ideas to hear views on what Scotland should be like in 2050 and the changes needed to get there. Comments were received regarding the carrying out and ongoing monitoring of HLAs, and these were taken into account in the development of NPF4 and this guidance.

A Position Statement was published in November 2020. This reflected on the information received through the call for ideas engagement programme. The Position Statement confirmed expectations for NPF4, including a role for planning in proactively supporting delivery of new housing. HLAs contribute to the evidence required to achieve this.

Draft NPF4 was laid in the Scottish Parliament on 10 November 2021 for Parliamentary scrutiny. Alongside Parliament’s consideration of the draft NPF4, the Scottish Government invited comments from all stakeholders. The public consultation was launched on 10 November 2021 and closed on 31 March 2022. Responses highlighted the role of HLAs in monitoring the ‘deliverable housing land pipeline’ proposed, and now included as part of NPF4 Policy 16, Quality Homes.

Business engagement As part of the development of NPF4, background information on the BRIA and a questionnaire was sent to around 33 key stakeholders from across Scotland, including key business and industry representatives. Additionally, the RTPI held a range of consultation events on behalf of the Scottish Government including a business roundtable. Further meetings took place during the consultation period with key groups where business and regulatory issues were discussed. This included meeting with the housing industry’s representative body.

Targeted stakeholder engagement - HLA Guidance

A full-day in person stakeholder workshop was held in April 2023, followed by two additional online sessions in May 2023. An Issues Paper outlining key matters and questions for consideration was circulated prior to the full day workshop. Following reflection on the discussion, the two additional online sessions focused on matters where it had been difficult to reach consensus (completions and small sites), and a second focused on the rural and island perspective. In August 2023 a feedback paper was then issued summarising discussions and indicating the preferred for the updated guidance. At all points, the opportunity to provide written input was given and a number of interests provided such comments in September 2023 following the feedback paper.

Housebuilding industry, planning consulting, legal and planning authority interests were all represented at these discussions.

This engagement is in addition to the extensive engagement that took place during the development of NPF4.

Section 3: Costs, impacts and benefits

Option 1: Do nothing

This would impact on the implementation of NPF4 and decision making on planning applications for new homes. This approach would enable authorities to prepare HLAs in a format suitable, but at the cost of consistency of information and being able to aggregate information and monitor housing delivery at the national scale. This has become increasingly significant since the declaration of the Housing Emergency.

This approach also fails to respond to requests from a range of stakeholders to provide further guidance on the completion of HLAs. Further, there is an expectation through the published NPF4 delivery programme that HLA guidance will be published in support of NPF4 Policy 16 implementation. Not doing so would therefore undermine stakeholder confidence in commitments made in the Delivery Programme.

Option 2: Preferred option - Developing guidance

Developing guidance will support consistency in implementation of policy 16 across Scotland. It will give businesses increased certainty on how evidence regarding delivery of housing land is collated and published. Guidance will support planning authorities to undertake consistent, thorough and robust data collection, which in turn will support plan development and consistency in decision-making processes.

Assessments

The full BRIA for NPF4 involved a Competition Assessment, a Consumer Assessment, Test run of business forms, a Digital Impact Test and a Legal Aid Impact Test. None of these assessments indicated adverse impacts.

• Intra-UK Trade - The guidance is not likely to have an impact on intra-UK trade
• EU Alignment - This guidance is unlikely to impact on the Scottish Government’s policy to maintain alignment with the EU

Section 4: Additional implementation considerations

Enforcement/ compliance

Planning authorities are statutorily required to take NPF4 into account when preparing their local development plans, including the requirement under policy 16 to prepare HLAs. Following publication of the guidance proportionate resource will be provided from the Planning, Regeneration and Architecture and Digital Directorates to support roll out of the approach outlined.

Legal Aid

No impacts.

Digital impact

The guidance is supported by a template spreadsheet designed by colleagues in Digital Directorate. This tool has been designed with simplicity, accessibility and proportionality in mind.

Business forms

No new business forms.

Section 5: Next steps and implementation

Recommendations/ preferred options

Option 2, to publish HLA Guidance, will be progressed.

Implementation considerations/ plan

Following publication of the guidance proportionate resource will be provided from the Planning, Architecture and Regeneration and Digital Directorates to support roll out of the approach outlined.

Post implementation review

Planning, Architecture and Regeneration Directorate maintains open lines of dialogue with relevant stakeholders, including the housing industry, through Heads of Planning Scotland, and planning authorities through Heads of Planning Scotland. Regular engagement will provide opportunities to discuss implementation of the updated HLA guidance.

Declaration

I have read the Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

I am also satisfied that officials have considered the impact on consumers as required by the Consumer Scotland Act 2020 in completion of the Consumer Duty section of this BRIA.

Signed:

Date: 19 December 2024

Minister's name: Ivan McKee MSP

Minister's title: Minister for Public Finance

Scottish Government Contact point: Kate Houghton, Planning, Architecture and Regeneration Directorate