The Town and Country Planning (Masterplan Consent Areas) (Scotland) Regulations 2024 and The Masterplan Consent Area Scheme (Environmental Impact Assessment) (Scotland) Regulations 2024: impact assessments

Business Regulatory Impact Assessment (BRIA) (partial)

Title of Proposal

Masterplan Consent Areas – Consultation on proposed secondary legislation

Purpose and Intended Effect

Background

An independent review of the Scottish planning system 'Empowering planning to deliver great places' was published on 31 May 2016. The report noted the review panel were 'inspired by the flexibility provided by Simplified Planning Zones (SPZs) and proposed their principles could inform an adaptable approach to zoning areas of land for development including housing.' The independent Panel recommended that the SPZ approach 'be rolled out across Scotland' as a way to incentivise development.

The subsequent public consultation paper 'Places, People and Planning' (January 2017) proposed 20 key changes, including: releasing more 'development ready' land, for example making greater use of SPZs. A Position Statement (June 2017) followed the consultation paper and indicated broad support for greater use of 'a zoned approach to development' similar to that provided for by SPZs. The Position Statement explained that there would be legislative change brought forward that would refresh and rebrand SPZs and allow them to be progressed in a wider range of circumstances.

The Planning (Scotland) Act 2019 inserts a new section 54 and Schedule 5A into the Town and Country Planning (Scotland) Act 1997, as amended to introduce Masterplan Consent Areas (MCAs).

The rename to MCAs is to meet the independent panel's recommendation from May 2016 to rebrand the SPZ mechanism, and to emphasise the placemaking role of the masterplan. This will require an element of culture change, as the rebrand require planners to rethink use of this tool (with the existing SPZ secondary legislation pre-dating the 1997 Act), as an effective, modern way to lead and facilitate development through front-loading.

Part 2 of the 2019 Act introduces new powers to designate MCAs, to support more effective delivery of development through zoning of land, frontloading of scrutiny and aligning of consents, and allow them to be progressed in a wider range of circumstances, including within conservation areas and offer other types of consent than solely planning permission including roads construction consent, listed building consent and conservation area consent – where provided for in the particular MCA scheme.

The MCA provisions have been designed in a way which addresses issues raised in the consultation including; design and quality to be built into schemes, community engagement to be incorporated and more front loaded and the need for environmental assessment. The separate regulations on EIA being developed and consulted upon in tandem will ensure that the preparation of MCA schemes is subject to, and meet EIA requirements, where necessary.

Objective

The aim is to implement the provisions in the Planning (Scotland) Act 2019 on the procedures to cover Masterplan Consent Areas (MCAs.) Schedule 5A of the Act establishes much of the detail around the content of MCA schemes and the procedures for making or altering schemes. The Act sets out the scope of regulations about form, content and procedure of MCA schemes.

The Planning (Scotland) Act 2019 introduces MCAs as a new upfront consenting mechanism. Planning authorities will be able to use MCAs as part of a proactive, place-making approach to planning and consenting – enabling the type of development they wish to come forward in their places.

MCAs are a flexible tool and could support a range of scales and types of development from small scale changes, up to major new developments. MCAs would effectively enable planning authorities to grant up-front consent for planned development, offering benefits to potential investors in terms of certainty and removing much of the risk. MCAs could support local priorities such as regeneration and town centre revitalisation.

The Act provides the planning authority would prepare a MCA 'scheme', with scope to give a range of types of consent, including planning permission, plus roads construction consent, listed building consent and conservation area consent – where provided for in the particular MCA scheme. Development that is in line with the MCA scheme could be brought forward without the need to apply for permission.

Rationale for Government Intervention

The 2019 Act amended the Town and Country Planning (Scotland) Act 1997, and included provisions covering procedures for implementing MCAs, which will be a new upfront consenting mechanism. These provisions give Scottish Ministers powers to prepare secondary legislation - regulations - concerning a range of related matters. The changes that are being proposed are necessary to ensure that the new legislative requirements operate effectively and in a way that is compatible with the Scottish Government's wider policy objectives for the planning system.

Planning authorities will be able to use MCAs as part of a proactive, place-making approach to planning and consenting – enabling the type of development they wish to come forward in their places. MCAs will contribute to the following National Outcomes contained in the National Performance Framework:

• We live in communities that are inclusive, empowered, resilient and safe.
• We have a globally competitive, entrepreneurial, inclusive and sustainable economy.
• We have thriving and innovative businesses, with quality jobs and fair work for everyone,
• We value, enjoy, protect and enhance our environment.
• We are healthy and active.

Public Consultation

Within Government

As procedural matters, falling under the Planning Act, responsibility for the preparing of these regulations lies primarily with the Scottish Government's Planning,

Architecture and Regeneration Division (PARD). The proposals have been developed by a core team with assistance from colleagues across the Division.

The Scottish Government commissioned research carried out by Ryden, in association with Brodies, to research the use of SPZs and barriers to their uptake including resourcing, and to identify ways to overcome such barriers. That research 'Simplified Planning Zones and equivalent mechanisms outwith Scotland: research report' was published in August 2017 and consisted of a policy and research review and case studies of comparable mechanisms of upfront consenting in Scotland and elsewhere. It included consultation with targeted interviews, from across the wider government interests including Heads of Planning Scotland, the Improvement Service, individual planning authorities, Scottish Futures Trust and Transport Scotland.

Additionally, PARD has engaged with Transport Scotland, Historic Environment Scotland and the Marine Directorate. Wide engagement with relevant areas of the Scottish Government and key agencies will continue through the consultation and finalisation of the regulations.

Public Consultation

Collaboration has informed the preparation of the consultation on the proposals for regulations. It follows on from the extensive engagement undertaken prior to the Planning (Scotland) Bill being considered by the Scottish Parliament.

An independent review of the Scottish planning system 'Empowering planning to deliver great places' was published on 31 May 2016. The subsequent public consultation paper 'Places, People and Planning' (January 2017) proposed 20 key changes, including: releasing more 'development ready' land, for example making greater use of SPZs.

A Position Statement (June 2017) followed the consultation paper and indicated broad support for greater use of 'a zoned approach to development' similar to that provided for by SPZs. The Position Statement explained that there would be legislative change brought forward that would refresh and rebrand SPZs and allow them to be progressed in a wider range of circumstances. Comments relevant to SPZs that were received via this consultation process were taken into account when developing proposals for MCA Regulations.

A consultation on Planning Performance and Fees was undertaken between December 2019 and February 2020. It included two questions relating to MCAs, asking:

• whether an authority should be able to charge for development within a MCA in order to recoup the costs involved in setting one up. From the responses received:
  • a substantial majority (87%) supported the proposal for planning authorities to be able to recoup the costs involved in setting up a MCA. The principle of recouping costs was supported by all groups.
  • suggestion that the fees should be left to the discretion of the planning authority to reflect their costs at a local level.
  • several respondents were not clear how such a fee would be calculated and charged appropriately to developers.
  • some respondents considered any fee should be less than that payable under the planning application route, and should not be designed to fully recoup the planning authority's costs.
• whether the Scottish Government should set a fee or an upper limit in the regulations. From the responses received:
  • there was support (58%) for the setting of a fee or upper limit in regulations.
  • mixed views, with business and civil society respondents tending to support the proposal whilst development industry and policy and planning respondents were evenly split on setting the fee or an upper limit.

There will be a further public consultation for 12 weeks between 28 February 2024 and 22 May 2024 on these draft Regulations.

Business

The 'Simplified Planning Zones and equivalent mechanisms outwith Scotland research ' included consultation consisting of targeted interviews, covering 25 groups, including 8 developers and consultants and a business representative body (Barratt Homes, Cairn Homes, IGLOO/BIGG Regeneration, Haus Architects, Patrizia, Pro-Vision, Scottish Property Federation, and the Wheatley Group).

The conclusions from that research shaped the provisions on MCAs in the 2019 Planning Act and have informed the approach to the regulations.

We will invite views on this partial BRIA as part of the public consultation. We also intend to engage with business organisations representing a range of sectors during the consultation period.

Options

Option 1: Do nothing

The National Planning Framework 4 Delivery Programme (Sept 2023) sets out the approach for implementing NPF4 and includes key actions to be taken forward over the short and medium term. The delivery programme identifies MCA Regulations as a short term action for (2023) and medium term action (2024-28). Failure to deliver on this will impact negatively on stakeholder expectations.

Option 2: Implement MCA provisions within the Act through regulations (Preferred option)

Under this option, regulations will implement the provisions in the Planning (Scotland) Act 2019 on the procedures to cover Masterplan Consent Areas (MCAs). Draft regulations are included within the consultation paper.

Sectors and Groups Affected

Businesses

MCAs will offer developers greater certainty of consent with this being provided by the planning authority upfront, enabling them to raise necessary finance, without the risk of not securing consent.

Then if the developer comes forward with a proposal which complies with the scheme they do not have to put in a separate application for planning permission, roads construction consent, listed building consent or conservation area, if they were covered in the MCA scheme – offering potential for streamlining processes- and facilitating developers to get on site earlier.

MCAs have potential to support a range of sectors (including housebuilding, business and industry, commercial leisure, energy and town centre operators), and a range of business scales.

Going forward, there may be opportunities for businesses to support planning authorities in preparing new MCAs.

Local Authorities

Planning authorities are required to consider whether it would be desirable to make or alter a MCA scheme for a part or parts of their district and must set out what they decided and the reasons for their decision.

The regulations focus primarily on procedural requirements for planning authorities to implement MCAs. The proposed regulations are necessary to provide additional detail to the requirements set out in primary legislation and are intended to recognise the benefit in working to the principle that regulations are kept to the minimum necessary and that much of the detail of Scottish Ministers' expectations for implementation of the 2019 Act should be set out in guidance.

Communities

MCAs will impact on communities as they focus on the future of the places where people live, work, learn and play. The MCA preparation process provides opportunities for public involvement so the extent that the proposals will impact on these groups will be dependent on their willingness and need to become involved in these processes.

Public Bodies

The proposals would require planning authorities to consult with key agencies on their draft MCA schemes.

Benefits

Option 1: Do nothing

There are no benefits arising from this approach.

Option 2: Implement MCA provisions within the Act through regulations

MCAs would effectively enable planning authorities to grant up-front consent for planned development, offering benefits to potential investors in terms of certainty and removing much of the risk. Planning authorities will be able to use MCAs as part of a proactive, place-making approach to planning and consenting, supporting a range of scales and types of development from small scale changes, up to major new developments.

MCAs will support more effective delivery of development through zoning of land, frontloading of scrutiny and aligning of consents, and allow them to be progressed in a wider range of circumstances, including within conservation areas and offer other types of consent than solely planning permission including roads construction consent, listed building consent and conservation area consent – where provided for in the particular MCA scheme.

In addition, the effect of enabling and securing new development brings a range of benefits to a local authority:

• directly in the form of increased council tax and business rates income through attracting development and investment to their area
• increasing the marketability of sites covered by the MCA scheme and uplift in value of any council-owned land through land sales;
• potential for planning authorities to secure financial contributions from developers for development within the zone, through an upfront coordinated approach;and
• in terms of improved outcomes for communities through supporting economic growth, and the wellbeing economy.

By way of example, this type of upfront consenting can attract significant investment, for instance the Hillington Park SPZ has attracted over £25 million investment since its creation.

Costs

Option 1: Do nothing

There are no costs arising from this approach.

Option 2: Implement MCA provisions within the Act through regulations

In support of the Scottish Parliament's scrutiny of the 2017 Planning Bill the Scottish Government prepared an accompanying Financial Memorandum. This was updated following the Stage 2 scrutiny and provides the basis for the costs identified below.

Planning authorities already have a duty to review whether an SPZ should be prepared for any part of their area. Publishing a report on the equivalent review for MCAs is not expected to add any significant cost, particularly as it can be part of the LDP delivery programme the planning authority is already obliged to produce. At the time of the Planning Bill, the costs of including the report on MCAs was judged to be between £1,000 to £2,000 for each authority per year.

The preparation of any MCAs is optional for planning authorities, and should be based on an analysis of the costs and the benefits to be achieved. The cost of any individual MCA scheme will depend on the size of the size and its particular features, but costs may range from £15,000 to £200,000 based on existing examples.

We are looking at the scope for discretionary charging, allowing planning authorities to choose if they wish to recoup some of their costs. A separate Scottish Government consultation focussing on wider resourcing considerations will include a number of questions covering MCAs and discretionary charging. We also want to promote a collaborative approach to the production of MCA schemes, with planning authorities working in partnership with those who will benefit from the certainty of the MCA scheme (including developers, investors and business interests).

Any consultation body or public body may request a reasonable charge to cover the cost of making relevant information available which will inform the preparation of an EIA report.

Regulatory and EU Alignment Impacts

Intra-UK Trade

Is this measure likely to impact on intra-UK trade? No

International Trade

Is this measure likely to impact on international trade and investment? No

EU Alignment

Is this measure likely to impact on the Scottish Government's policy to maintain alignment with the EU? No

Scottish Firms Impact Test

The proposed changes are not expected to have any overall impact on Scottish Firms. Views from business and industry interests are however invited as part of the public consultation process.

Competition Assessment

There are no obvious impacts on competition from the proposed regulations or guidance, though views are being sought on this Interim BRIA as part of our consultation process

Consumer Assessment

The Scottish Government definition of a consumer is "anyone who buys goods or digital content, or uses goods or services either in the private or public sector, now or in the future". It is not anticipated that the proposed regulations or guidance will have any impact on consumers though views are being sought on this Interim BRIA as part of our consultation process.

Test Run of Business Forms

Both the draft MCA and MCA EIA Regulations will introduce new forms (otherwise known as notices by the regulations), for planning authorities to use. There will an opportunity during the consultation period to provide comments on these.

Digital Impact Test

Publicity arrangements for MCAs are set out in the proposed regulations and include requirements relating to publishing material on the internet. However, such measures are in addition to other publicity requirements so it is not considered that the proposed regulations will have any impact on digital technologies or on traditional or offline businesses.

Legal Aid Impact Test

These changes would not affect claims for legal aid.

Enforcement, Sanctions and Monitoring

The draft regulations set out that planning authorities are required to consider every five years whether it would be desirable to make or alter a MCA scheme for a part or parts of their district and must set out what they decided and the reasons for their decision. Planning authorities are required to publish their first statement within five years of the 2019 Planning Act gaining Royal assent (i.e. by 24 July 2024).

Implementation and Delivery Plan

The National Planning Framework 4 Delivery Programme (Sept 2023) sets out the approach for implementing NPF4 and includes key actions to be taken forward over the short and medium term. The delivery programme identifies MCA Regulations as a short term action (2023) and medium term action (2024-28).

The Act requires that planning authorities are required to consider before 24 July 2024 and every subsequent five year period whether it would be desirable to make or alter a MCA scheme for a part or parts of their district and must set out what they decided and the reasons for their decision.

Post-implementation Review

Evidence gathered during the consultation will help inform the finalise work to finalise the MCA regulations. The final BRIA will consider the post-implementation.

Future MCA guidance will be largely factual and will explain the statutory procedures from the 2019 Act and the sets of regulations. We intend to then engage with

planning authorities, the HOPS network, key agencies, developers and other partners to identify and share good practice and to promote peer-to-peer learning as good practice develops as MCAs are implemented in practice.

PARD will review the statements published by planning authorities setting out whether they are making or altering MCA schemes in their areas to review take up and use of the new consent mechanism.

Summary and Recommendation

The above proposals for new regulations have emerged from legislative requirements set out in the Planning (Scotland) Act 2019 and following an extensive review of the planning system.

The above proposals aim to strike a balance between the need for clarity on one hand to support the implementation of MCAs in practice, whilst allowing a degree of flexibility to allow for best practice to evolve as MCA schemes are made.

Declaration and publication

I have read the partial 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 will be assessed with the support of the businesses in Scotland.

Signed: Joe Fitzpatrick MSP

Date: 7th Feb 2024

Minister's name: Joe Fitzpatrick MSP

Minister's title: Minister for Local Government, Empowerment and Planning

Scottish Government Contact Point: Adam Henry, Planning, Architecture and Regeneration Division