Scotland 2045 - fourth National Planning Framework - draft housing land requirement: explanatory report

Non-Technical Summary

Introduction

1. The Town and Country Planning (Scotland) Act 1997, as amended, requires at Section 3A(3)(d) that the National Planning Framework (NPF) contain "targets for the use of land in different areas of Scotland for housing". To meet this, Annex B of Draft NPF4 proposes a Minimum All-Tenure Housing Land Requirement (MATHLR) for each planning authority in Scotland.

2. This Explanatory Report explains how we have moved from the new statutory requirement to the figures contained in the Draft NPF. This is to support transparency and allow stakeholders to understand the approach taken and the subsequent outcomes.

Case for Change

3. Scottish Ministers acknowledge that planning for housing in Scotland needs to change. There is a need to focus on delivering outcomes, rather than process. Planning for housing is one of the most contested areas of the planning system:
it has become increasingly litigious in recent years. The forecasting of housing need and demand has become an industry in itself, consuming significant time and resources for everyone involved.

4. Housing is critical to a wide range of socio-economic issues. Experience of the pandemic has highlighted the importance of quality homes in quality places. There is therefore a need to focus on accelerating delivery and improving the quality of homes and places. This can be supported by introducing a long-term, strategic and public interest approach that clearly, consistently and transparently establishes the housing land requirement much earlier in the plan preparation process.

5. Housing has been one of the key issues throughout the process of planning reform with varying views. During the progress of the Planning Bill, provisions relating to housing targets were added by an amendment lodged and accepted during Stage 2 scrutiny.

A New Approach

6. The statutory requirement is new and has required a new approach to be developed. We have sought to provide a consistent approach across the development planning system in Scotland, that is simpler and more transparent. The approach has produced broad, reasonable and long-term requirements, as is appropriate at the national scale. It looks to provide clarity early in the development plan process and confidence about the baseline amount of land to be identified locally.

7. A discussion paper^[1] on the housing land approach was published in March 2020. This introduced a number of guiding principles, as below, and proposed a methodology to meet the statutory requirement

• Providing early clarity and reducing conflict and complexity.
• Ensuring Local Development Plans (LDPs) allocate sufficient land for housing.
• An agreed proportion of this land should be 'deliverable'.
• Minimum figures should be set for all local authority areas in Scotland.
• A national approach needs to be informed by regional and local knowledge, analysis and input.

8. Responses to the paper were mixed and wide ranging. Overall, there was general support for the principles and for measures that would help to address complexity and conflict, but differing views on how this could be achieved.

9. A Housing Advisory Panel, chaired by the Scottish Government's Chief Planner, was established to help guide this work. It comprised a cross section of members, that were invited to take part on a personal basis due to their experience on housing and planning matters.

10. Taking into account the responses to the discussion paper and the contributions from the Housing Advisory Panel, the approach to establish the MATHLR emerged. This built upon the approach presented in the discussion paper and represented fine-tuning and iterative amendment.

Inputs, Estimates and Adjustments

11. The calculation for arriving at the MATHLR is set out in Figure A below.

12. For household projections, the 2018-based principal projection of National Records of Scotland (NRS) data is used^[2]. This equates to step 1 of the Housing Need and Demand Assessment (HNDA) process. For existing need, this uses a count of homeless households in temporary accommodation and households who are both overcrowded and concealed, from NRS 2011 census information, the 2016-2018 Scottish Household Survey and Scottish Government homelessness statistics as at March 2020. This equates to step 2 of the HNDA process.

13. A flexibility percentage is then applied. This represents a contingency of land to allow for changes in sites coming forward. The flexibility applied is 25% for urban authorities and 30% for rural authorities. This is based on the Randall Classification using population density. The MATHLR figures are a cumulative total for a period of 10 years.

14. The figures will be the minimum amount of land to be identified within LDPs. Expressing the figure as a minimum requirement prevents this being interpreted as a cap to development. They will be all-tenure as it is the scale of land that is relevant for national spatial planning purposes. Different tenures will continue to be considered at the local level.

15. The figures will focus on the delivery of housing land. The statutory requirement of the Act relates to 'use of land' and it is land use that the planning system regulates. They are termed a requirement to better convey the intention that they are to be met within LDPs. Reference to targets could be inferred as aspirational amounts that authorities try to achieve.

16. The process for arriving at the MATHLR is set out in Figure B below.

17. The Scottish Government ran the first two steps of the HNDA Tool using default scenarios and added the relevant flexibility allowance. This provided Initial Default Estimates for each local and national park authority. It was made clear that the Initial Default Estimates were a starting point for local consideration and to enable local input. They represented the beginning of the process and were, in general, a statistical and policy neutral figure to build on.

18. Authorities, either individually or in regional groupings, with their Housing Market Partnership (HMP) and local stakeholders, were asked to consider the Initial Default Estimates and, where relevant, they proposed Locally Adjusted Estimates based on robust local information and relevant policy drivers. They were also asked to benchmark the estimates against completions data that was provided.

19. Information submitted by authorities provided commentary on a range of matters, including:

20. Household Projections: The Initial Default Estimate was based on the NRS 2018-based principal variant. Many authorities contended that these assumed a continuation of past trends and were based on the 2011 census which, given the time elapsed, needs to be considered carefully alongside other evidence. It was indicated that the Locally Adjusted Estimate should apply a policy interpretation to the NRS projection. Overcoming these issues, to take account of policy, was a consistent component in evidence submitted. This meant that local economic growth/growth deals (and housing supply to support this), demographic change, affordability, Housing to 2040 and post-pandemic outcomes were able to be taken account of.

21. For some, the adoption of a high migration variation on the NRS 2018-based household projection was sufficient to accommodate limitations. Others sought to adopt their own forecast for household growth.

22. Existing Housing Need: The HNDA Tool counts two types of existing housing need - homeless households in temporary accommodation and households that are both overcrowded and concealed. The HNDA Tool and supporting guidance state that the existing housing need figure used by the Scottish Government is only a minimum and that other types of existing housing need exist. Local authorities and stakeholders highlighted a range of additional factors including higher levels of homelessness, some types of households on social housing waiting lists, affordable housing need, special housing need, Below Tolerable Standard housing and/or, where available, results of local HNDA surveys where they were quality assured.

23. The near unanimity of this expanded assessment of need was recognised. Consequently, this represented an opportunity to expand existing housing need where evidence to quantify it was available; including ensuring that it resulted in a need for a new home and that there was no double counting.

24. Flexibility: The application of flexibility to rural and urban areas was accepted in all but two instances. Aberdeenshire and the Cairngorms National Park indicated a preference for different percentages (25% and 10% respectively) due to views that density is skewed by part of the National Park being within the authority area and also potential impacts on nature conservation interests. Authorities are encouraged to be more directive in where new development should take place, which can be away from areas authorities consider there will be issues with deliverability. As a result, the Randall Classification was considered appropriate despite its limitations.

25. Other matters commented on included: completions, housing land audits, delivery, housing market areas and rounding to the nearest 50.

26. Authorities were asked to engage stakeholders through their Housing Market Partnerships and other local interests. Whilst the level of engagement was mixed, there was general support for increasing the housing land requirement by expanding the definition of need and emphasising policy drivers (particularly with regard to economic growth and social housing provision) to increase household projections.

Establishing the MATHLR

27. The Scottish Government have then considered the Locally Adjusted Estimates. The evidence and views presented in relation to household projections, existing housing need and flexibility were reviewed. It also included looking at the information provided on housing market partnerships and stakeholder involvement and policy evidence, as well as sign off by senior officials and the statistical evidence used.

28. Recognising that the proposed MATHLRs promote a strategic allocation of housing land to provide a broad estimate for local authority areas and that it is not intended to be precise, they were benchmarked against a number of factors, including completions, Housing Land Audit (HLA) programme, established housing supply, existing housing stock and an area's historic dwellings growth.

29. An Assessment Report for each authority or regional grouping, as relevant, has been prepared. The proposed MATHLR for each planning authority in Draft NPF4 is set out in Table 1 overleaf. Within the table, figures shown for Eilean Siar are not rounded. This is because of the effect rounding can have on numbers at this scale. Figures for the Glasgow City Region are provided for the MATHLR only as breakdowns were not received.

Next Steps

30. Draft NPF4 is now the subject of public consultation and scrutiny by the Scottish Parliament. This may result in amendments to the MATHLR presented in the published NPF4.

31. Once NPF4 is adopted and published, there is a statutory requirement for it to be taken into account by planning authorities when preparing LDPs. There is not a requirement for it to be consistent. It is, however, expected that the MATHLR will be the minimum amount of housing land to be identified within LDPs across Scotland.

32. The LDPs will go on to allocate sites to meet their housing land requirement. The policy aim is for planning to be more directive about guiding where new development should happen and how those developments can deliver more for new and existing communities. The Delivery Programme will proactively support delivery of the LDP and achievement of its intended outcomes, including housing provision.

33. Changes made through the package of planning reform seek to enable authorities to focus their resources on place and delivery, emphasising planners' role in co-ordinating levers across authorities, wider public sector and the private sector to support delivery of development, including housing, that achieves the wider outcomes intended.