Planning - permitted development rights review - phase 2: consultation

3. Changes of Use in Centres

Strategic Context

3.1. Scotland's city, town and local centres are vital assets – providing a focus for economic, cultural and social interaction, and having a key role to play at the heart of place-based strategies and in supporting the establishment of 20- minute neighbourhoods. But our centres also face significant challenges – many of which are long-standing, complex and have been exacerbated by the Covid-19 pandemic.

3.2. Recognising this, in July 2020 the Scottish Government established a Review Group chaired by Professor Leigh Sparks, which was asked to develop ideas and recommendations as to how we can make our town centres greener, healthier and more equitable. The Scottish Government also established a City Centre Recovery Task Force in March 2021, chaired by the Cabinet Secretary for Finance and the Economy, run in partnership with Scotland's seven cities through the Scottish Cities Alliance. The Task Force sought to identify immediate recovery priorities that could support making our city centres vibrant, living places; green and connected places; safe places; and also working places, for their businesses, investors, residents, visitors, commuters, and other users of the city centre.

3.3. The Town Centre Review Group published its report, A New Future For Scotland's Town Centres, in February 2021. Reflecting the multi-faceted nature of the issues facing our centres, the report made a range of recommendations spanning multiple policy areas including taxation, transport, housing and planning. Scottish Government and COSLA issued a joint response to the report in April 2022. The City Centre Recovery Task Force published its report, At the Heart of Economic Transformation, in March 2022. The Task Force's report identified a range of potential actions and priorities to support city centre recovery. Like the Town Centre Review Group, the Task Force's suggested actions are cross-cutting, involving a range of policy areas.

3.4. The core recommendations the Review Group made in respect of planning focussed on policy-based measures rather than deregulatory tools such as PDR or the UCO. In particular, it advocated strengthening national planning policy status of centres through the fourth National Planning Framework (NPF4).

Emerging Planning Policy Context

3.5. NPF4 was published in draft by the Scottish Government in November 2021 for a period of public consultation which ran until 31 March 2022. The document contains several draft policies that are intended to support the resilience and recovery of Scotland's centres. In particular:

• Draft Policy 24: Centres
• Draft Policy 25: Retail
• Draft Policy 26: Town Centre First Assessment
• Draft Policy 27: Town Centre Living

3.6. The planning system in Scotland is plan-led. This means that policies contained in development plans are the starting point for decisions on applications for planning permission. By law, planning applications are determined in accordance with the development plan unless material considerations indicate otherwise9.

3.7. Unlike its predecessors, NPF4 will – once adopted by the Scottish Ministers – be part of the statutory development plan against which planning applications are determined. It will therefore influence planning decisions more directly than previous iterations of the NPF. Accordingly, the NPF4 is considered the most important lever for achieving Scottish Government's long-term planning policy objectives for our city, town and local centres.

3.8. Given the scale of the challenge, it is important that we consider all the tools at our disposal which could play a part in supporting the health of Scotland's centres – including potential changes to the UCO and/or PDR. That is the focus of this Chapter, and reflects the commitment (made in the joint SG-COSLA response to the Review Group's report) to seek views on how UCO or PDR changes could support recovery. But given the future role and status of the NPF4, any UCO or PDR amendments need to complement, rather than counteract, the draft policies it contains and the plan-led approach it promotes.

3.9. It is also important to underline that the planning system (whether planning policies or deregulatory tools such as the UCO or PDR) is not the only mechanism that has the potential to support Scotland's centres. This is reflected in the cross-cutting nature of the recommendations and actions identified in the Town Centre Review Group and City Centre Recovery Task Force reports. The measures set out below should be viewed in this context.

Potential changes to the UCO

3.10. As noted in paragraph 3.4, the Town Centre Review Group's planning recommendations focussed on policy-based measures. However, it also suggested that Scottish Government should consider "the desirability of a revision perhaps to a more general Town Centre Use Class". It is not entirely clear from the Review Group's report what such a use class would entail or how it is envisaged to work. However, it is important to stress that the UCO is not a spatial tool; its provisions apply across Scotland and any changes would therefore apply in all locations, not just in centres. For reference, the current UCO and applicable PDR are set out in Table 1 at the end of this Chapter.

3.11. Notwithstanding this important caveat, in our view a "general town centre use class" would – in broad terms – involve the establishment of a new class which brings together a variety of uses which are commonly found in (or associated with) city, town and local centres but which currently sit in separate use classes. The effect of doing so would be that any changes of use within this broader, merged use class would not involve development and hence not require planning permission. The UK Government has recently taken forward such a measure through the introduction of a new "Commercial, Business and Service" use class, which is known as Class E^[10].

3.12. We consider that such a proposal has some potential merit. By bringing uses together and allowing movement between them, the introduction of an expanded/merged use class would give businesses and other occupiers greater flexibility to adapt more rapidly to changing circumstances, community needs and customer demands. This would potentially help centres become more agile and responsive. It would also recognise that centres have changed considerably since the UCO was introduced, as have the business models of those operating there and the challenges they face. In many cases, buildings do not fit neatly into a single use class: they may have a number of concurrent uses or be in different uses at particular times of day. A merged use class would enable such changes to take place without planning permission needing to be sought. It therefore has the potential to promote diverse and mixed uses in our centres, in line with the Review Group's recommendations and policies in Draft NPF4, and give confidence to businesses, developers and investors.

3.13. If a new, merged use class were to be taken forward, a critical consideration is what uses should be included within it. Arguably uses falling within Class 1 (shops), Class 2 (financial and professional services), Class 3 (food and drink), Class 4 (business), Class 7 (hotels and hostels), Class 10 (non- residential institutions) and Class 11 (assembly and leisure) can be characterised as "town/city centre uses". Indeed, a number of sui generis^[11] uses (e.g. theatres, pubs, hot food takeaways, flats, student accommodation) are also features of centres, as are residential uses within Classes 8, 8A and 9.

3.14. Clearly, there are a number of ways a merged class could be taken forward, with various possible permutations in terms of the uses included in a new class. In determining whether uses could or should be included in a merged use class, it is important to underline that any change of use falling within such a class would not be subject to planning control. This includes changes to – but also changes from – those uses contained within a new class. Not only would such changes of use not require planning permission, it would not be possible for planning authorities to control or mitigate associated impacts (e.g. noise, transport) through planning conditions or obligations. Other regimes – including building standards, licensing and environmental health – would continue to apply, however.

3.15. Accordingly, we do not think it would appropriate or desirable to include uses more likely to have significant negative impacts on those around them – also known as 'bad neighbour' uses. We are also not minded to include Class 4: if this formed part of the same merged class as Class 1, it would allow (amongst other things) out-of-centre office blocks to change to retail use. Such a scenario could undermine emerging policy in the Draft NPF4, notably Policies 24 and 25. Although we are not minded to include Class 4 if a merged use class were taken forward, we are considering the potential for a PDR for a change of use to Class 4 (see paragraphs 3.20 to 3.23).

3.16. As an indicative proposal we could bring together Classes 1, 2 and 3 into a single class. Going further, certain uses in Class 10 (e.g. art galleries) and class 11 (e.g. gyms) could also be included. We would welcome respondents' thoughts on such a merged use class, and whether it would help to support our wider aspirations for Scotland's centres – including helping to tackle vacant units. It should be noted that there are already PDR for a change of Class 2 and Class 3 units to Class 1 (see Table 1). These PDR can provide for, amongst other things, the creation of "pop up" shops including within vacant premises.

3.17. The additional flexibility that a merged use class would offer has the potential to offer multiple benefits. But, as the text above alludes to, such a substantial change to the UCO is not without risks. In summary, we consider the key issues are that:

• The flexibilities offered by a new, expanded use class would apply in all areas – not just centres.
• The lack of planning control could lead to the loss of certain uses (e.g. retail) in particular locations, resulting in concentrations or clustering of uses rather than a diverse mix of uses.
• Although other regulatory regimes would continue to apply, planning would not be able to control or mitigate impacts on existing premises that could arise where changes of use take place (e.g. where a retail unit located below a flat becomes a restaurant).

3.18. We are keen to hear respondents' views on how significant these issues are; this will help inform our consideration of whether, on balance, the benefits of a merged use class justify making the change. We would also welcome views on other potential changes to the UCO that might help to support Scotland's city, town and neighbourhood centres.

Q19. Do you consider that a merged use class bringing together several existing classes would help to support the regeneration, resilience and recovery of Scotland’s centres? Please explain your answer.

Q20. What do you consider to be the key risks associated with such a merged use class, and do you think that non-planning controls are sufficient to address them? Please explain your answer.

Q21. Are there any other changes to the UCO which you think would help to support Scotland’s centres? Please explain your answer.

3.19. Ultimately, it may be that the flexibilities offered by a merged use class would be beneficial in some locations but less so in others; any changes to the UCO would apply across Scotland. As noted in paragraph 1.14, because Masterplan Consent Areas (MCA) can grant planning permission (and other consents) for specified forms of development, they have the potential to offer similar flexibilities to the UCO or PDR. However, these would only apply to the particular area or site covered by the MCA scheme and so can be tailored to the specific needs and pressures it faces. We would welcome views on the potential role that MCA could play in supporting development and change in centres.

Q22. Do you agree that MCA could be a useful tool to provide more extensive planning freedoms and flexibilities in Scotland’s centres? Please explain your answer

PDR for provision of workspace

3.20. As Scotland recovers from the pandemic, the increase in hybrid and other working patterns is likely to lead to a growth in the need for smaller-scale, decentralised workspaces. Such spaces have the potential to help nurture local enterprise, entrepreneurship and innovation. Furthermore, the provision of small-scale workspaces would potentially help to aid the revitalisation of centres by attracting a greater range of occupiers and users, as well as boosting footfall. They could also have a role to play in establishing 20- minute neighbourhoods and tackling vacancy.

3.21. For this reason, we are considering the case for providing greater flexibility to change the use of existing buildings to offices/workspaces. As noted in paragraph 3.15, we are not minded to include class 4 in a merged use class if such a measure were to be taken forward. This is partly because it could lead to the loss of offices and other workspaces falling within class 4. However, an alternative approach could be to support provision of workspaces through a new PDR granting planning permission for a change of use to class 4 (but not the other way round).

3.22. We are therefore considering the introduction of a new PDR for certain buildings (e.g. those within Class 1, 2 and 3 - or within a merged class if that were introduced) to change to Class 4. We are conscious that a blanket PDR could have the unintended consequence of undermining established office locations where authorities are keen to promote and retain such uses. For that reason, if a PDR providing for a change of use to class 4 were taken forward we envisage this would be subject to a maximum floorspace limit (e.g. 300 square metres).

3.23. We would welcome views on the merits of such a PDR, what existing uses it should apply to, whether 300 square metres would be an appropriate maximum floorspace threshold and what (if any) additional conditions such a PDR should be subject to.

Q23. Do you think that a PDR providing for a change of use to Class 4 (business) would help to support the regeneration, resilience and recovery of centres – as well as the establishment of 20-minute neighbourhoods? Please explain your answer.

Q24. If a PDR of this nature were taken forward, what existing uses should it apply to? Please explain your answer.

Q25. Would 300 square metres be an appropriate maximum floorspace limit? Please explain your answer.

Q26. What (if any) additional conditions or limitations should such a PDR be subject to? Please explain your answer.

PDR for moveable outdoor furniture

3.24. The requirement for greater physical distancing during the pandemic saw many cafés, restaurants and other businesses make use of outside areas in order to accommodate customers in a way that complied with public health advice.

3.25. In some instances this has involved placing moveable structures (e.g. tables, chairs, umbrellas, heaters and other furniture) on pavements. Unless the planning authority is of the view that such use of the land and structures do not constitute development for planning purposes, planning permission would be required^[12]. Where structures are placed on a public road (including the pavement – see paragraph 2.34), consent from the relevant roads authority would also need to be sought under section 59 of the Roads (Scotland) Act 1984. Licensing controls may also apply.

3.26. As well as enabling businesses to operate safely during the pandemic, the use of outdoor spaces can help make places more vibrant and welcoming. The last two years have also shown that there is an appetite for outdoor socialising, eating and drinking in a Scottish climate. It should be noted that in response to the pandemic, the Welsh Government introduced temporary PDR for outdoor servery provision (subject to conditions). Rather than introduce specific PDR, the Scottish Government instead issued guidance which encouraged planning authorities to relax planning control and take a pragmatic approach to enforcement action. This guidance is expected to be withdrawn at the end of September 2022.

3.27. We are keen to learn relevant lessons from the pandemic and therefore propose to introduce a new PDR that would permit the placing of moveable furniture on a public road adjacent to food and drink premises (Class 3).

3.28. We recognise that structures placed on pavements can create obstructions, which might affect certain groups disproportionately. For example, disabled people and older people. This is highlighted in Transport Scotland's Research Report Inclusive Design in Town Centres and Busy Street Areas, as well as in the draft Equality Impact Assessment at Annex C. As noted above, placing furniture on a road (the definition of which includes the pavement) requires consent under the Roads (Scotland) Act 1984. This would continue to be the case even if planning permission were granted through a PDR. As such, we consider that matters such as safety and inclusive access can be addressed even if planning permission is granted through a PDR.

3.29. We also recognise that there could be amenity impacts on neighbouring uses: for example as a result of noise. As above, we would welcome views on whether such issues can be adequately controlled through other regimes and/or conditions or limitations on any new PDR.

Q27. Do you agree with the proposed introduction of a PDR for moveable furniture placed on the road outside of (Class 3) food and drink premises?

Q28. Are there any conditions or limitations that you think such a PDR should be subject to? Please explain your answer.

Q29. Are there any uses other than (Class 3) food and drink premises which you consider such a PDR should apply to? Please explain your answer.

Q30. Do you agree that important matters such as safety and inclusive access could continue be controlled through other regimes that would continue to apply? Please explain your answer.

PDR for provision of residential accommodation

3.30. The Town Centre Review Group highlighted the role that town centre living can potentially play in helping our centres to thrive. The footfall associated with a resident population can, amongst other things, help to underpin the viability of shops, services and other facilities located within centres. Draft NPF4 (see draft policy 27) encourages and supports town centre living, making clear that proposals for new residential development in city/town centres should be supported.

3.31. Accordingly, we have given consideration to whether PDR could complement this emerging planning policy position. We are aware that in recent years, the UK Government has introduced PDR for the conversion of various types of building (e.g. offices) to residential use. More recently, it has introduced a PDR enabling buildings falling within the newly created Class E (see paragraph 3.11) to be converted to residential units.

3.32. Several research reports^[13] have highlighted concerns about the quality of properties developed under PDR, particularly where offices are converted to residential accommodation. Another key issue is that developer contributions cannot generally be sought where development is authorised under PDR. This loss of contributions associated with residential conversions may result in increased pressure on local services. If such services need to be upgraded as a result, the cost of doing so would be borne by the taxpayer.

3.33. For these reasons we are not minded to introduce new PDR providing for the conversion of shops, offices and other 'town centre' uses to residential units. This does not mean that the Scottish Government does not support a growth in town centre living. Rather, our view is that such development should be plan-led, with proposals assessed through the planning application process. This is the approach advocated in Draft NPF4.

Q31. Do you agree that new residential development in Scotland’s centres should be plan-led rather than consented through new PDR? Please explain your answer.

Q32. Are there any other PDR changes which you think could support the regeneration, resilience and recovery of centres? Please explain your answer.