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

Introduction and Context

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 paper 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 and anyone with an interest 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 and contributes to achieving many Scottish Government policy objectives, particularly around the economy, sustainability, health and well-being and resilience. Experience of the pandemic has highlighted the importance of quality homes in quality places. There is therefore a need to move on from the current situation in planning for housing to focus on accelerating delivery and improving the quality of homes and places.

5. Planning for housing is often viewed as too complex, inconsistent, caught up in debating numbers and detached from the needs of developers and communities. Consequently, there are views that planning is not currently well placed to ensure it timeously provides the right types of housing, in the right places to meet the diverse needs of communities.

• Some communities and individuals feel strongly that the system is weighted in favour of housing developers.

• Some of the development sector contend that planning authorities are not currently allocating sufficient effective housing land. There are also concerns about a lack of acceptance by some communities of the need for new housing.

• Planning authorities are frustrated at their limited resource being focused on conflicts over numbers, rather than delivering positive outcomes for communities.

6. To be relevant, planning for housing must address these criticisms and move away from debating overly complicated housing figures and calculation methodologies to focus much more on enabling development of quality homes and creating quality places to live. Planning and housing authorities, developers and communities need to move forward more confidently. This can be supported by introducing a long-term, strategic and public interest led approach that clearly, consistently and transparently establishes the housing land requirement much earlier in the plan preparation process.

Planning Reform

7. In May 2016, the independent review of the Scottish planning system - Empowering Planning to Deliver Great Places - was published^[3]. This considered, amongst other matters, housing delivery and recommended:

• The NPF should define regional housing targets as the basis for setting housing land requirements in Local Development Plans (LDPs) (recommendation 12).

• Establishing a clearer definition of effective housing land so that LDPs can take a positive and flexible approach to addressing the housing land requirement for their area (recommendation 13).

8. The review outlined that, given the national significance of housing delivery, a stronger steer on requirements would allow for fuller parliamentary debate. Making use of data available from Housing Need and Demand Assessments (HNDA) was seen as an important first step, with projections of need and demand being more closely linked with deliverability. Further, the review highlighted that defining whether or not land is suitable for housing was a key issue with ongoing confusion about what is needed to unlock development and specifically the definition of 'effectiveness'.

9. The Scottish Government published an early response to the Review in July 2016^[4] where agreement, in principle, with many of the recommendations was established. It recognised that further work would be required to consider each recommendation in more detail, with some benefiting from more thorough consideration, research input, discussion and consultation.

10. In January 2017, the Scottish Government published Places, People and Planning - A Consultation on the Future of the Scottish Planning System^[5]. Under the theme of building more homes and delivering infrastructure, it was recognised that there was a need to change the way housing was planned, as there was too great a focus on debating precise numbers, rather than delivery. A more strategic and aspirational approach, at a higher level, was advocated in establishing the number of homes required. Agreeing the amount of land required for housing much earlier in the plan preparation process was promoted.

11. In association with housing targets being set nationally, collaboration and engagement with local stakeholders was emphasised. Fundamentally, the consultation set out that the NPF should be clear on homes required over a 10-year period whilst being flexible to allow for changing market circumstances. Changes promoted included the HNDA Tool being used to derive housing estimates and providing more certainty by 'signing off' the number of homes that are needed at an early stage in the production of LDPs. Consequently, proposal 10 of Places, People and Planning: Being clear about how much housing land is required, was established.

12. Different stakeholders had different views about this proposal^[6]. Some did not support what they perceived to be centralisation, removing decisions on housing away from the local context, reducing transparency and a loss of flexibility. There were mixed views from the development industry, including some concerns that too flexible an approach at a national or regional level will do little to improve clarity, as well as calls for greater involvement and challenge in the HNDA process. Planning authorities and others argued that a clear national steer on housing land requirements would be welcomed, if it helped to streamline local development planning and free up resources.

13. The Scottish Government took into account responses to the consultation, including the wide range of views on whether or not housing estimates should be set at a national or local level. It concluded that it would continue to identify a solution, with stakeholders, that minimised the level of debate on how much land is required for housing.

14. The Planning (Scotland) Bill^[7] was introduced in the Scottish Parliament in December, 2017 and passed through three stages of scrutiny during 2018/2019. In its initial form the Bill did not include specific requirements relating to housing requirements in the NPF. The provisions relating to housing targets were added to the Bill by an amendment lodged and accepted during the Stage 2 scrutiny. The Planning (Scotland) Bill was passed by the Scottish Parliament on 20 June 2019 and became an Act on receipt of Royal Assent on 25 July 2019.

Housing System

15. Established by the Housing (Scotland) Act 2001, the broader housing system requires each local authority to prepare a Local Housing Strategy (LHS) for their area supported by an assessment of housing need and demand (HNDA). The LHS sets out a strategic vision for the delivery of housing and housing related services and the outcomes that it will seek to achieve. Each LHS sets out the local authority's view of the type and level of housing to be delivered over the period of the plan in its housing supply target (HST). The evidence base in preparing each HST is compiled through a HNDA.

16. Strategic Housing Investment Plans (SHIPs) are prepared annually by local authorities and set out strategic investment priorities for affordable housing over a 5 year period to achieve the outcomes set out in the LHS. SHIPs reinforce the local authority as the strategic housing authority and are operational strategies, not policy documents. SHIPs are used by the Scottish Government to draft Strategic Local Planning Agreements (SPLAs) for discussion with all local delivery partners and for final agreement with local authorities^[8]. Once agreed, SLPAs form the basis of individual Registered Social Landlords and local authority programme agreements.

Report Structure

17. The following sections of this report:

• Provide a summary of the overall policy approach related to housing, population and land-use planning. It highlights the integrated nature of Government policy.

• Present the methodology for establishing the MATHLR. It outlines the approach, input from a range of stakeholders, consideration of matters raised and explains the process for arriving at the figures.

• Outline the next steps in relation to parliamentary scrutiny, public consultation and incorporation of the MATHLR through LDPs.