Infrastructure levy for Scotland: discussion paper - responses overview

Background

The Planning (Scotland) Act 2019 (“the 2019 Act”) provides powers for the Scottish Ministers to make regulations to introduce an Infrastructure Levy, that is, a charge payable to a local authority on development in that local authority’s area, to be spent on the provision of infrastructure. This is intended to provide an additional stream of funding for infrastructure which is needed to support growth on a wider scale than individual developments. The Infrastructure Levy powers in the 2019 Act are subject to a “sunset clause”, meaning that they will lapse if regulations establishing the Levy are not made by July 2026.

A Discussion Paper was published on 3 June 2024 to support discussion about the Infrastructure Levy for Scotland (ILS) and to draw out views on how it could operate, prior to a full consultation on draft Regulations. The discussion phase closed on 30 September 2024.

The Programme for Government 2023-24 committed to implementing new Infrastructure Levy regulations by Spring 2026. In light of this commitment, the discussion paper focused on how the Infrastructure Levy should be implemented. However, discussions with stakeholders carried out during summer 2024 revealed significant concerns over whether the Levy would offer meaningful benefits in terms of infrastructure funding and delivery – linked to concerns about its likely complexity and potential impact on development viability. The written responses submitted to the Scottish Government highlighted the same issues. In light of these concerns, the Minister for Public Finance announced on 12 November that the Scottish Government would stop work on introducing the Infrastructure Levy, and instead explore ways of improving existing mechanisms for securing contributions, namely section 75 planning obligations. This announcement was made in the context of the publication of the Planning and the housing emergency: delivery plan.

This report provides an overview of the general comments made in the written responses. It does not aim to reflect every comment made in the responses, but summarises common themes. Following the decision to stop work on the Levy, we have not undertaken detailed analysis of the responses to questions on the specific mechanics and operation of the Levy.