Scottish Planning Policy - finalised amendments: December 2020

3. Definition Of Effective Housing Land

• Question 2 in the consultation paper focused on making the definition of effective housing land as set out in paragraph 123 and associated glossary definitions more flexible.
• Sites currently need to be proven to be 'effective' when assessed against a range of criteria set out in planning advice. This is important because, as explained in Section 2, if there is not enough effective housing land available, then it is more likely that sites that are not in a local development plan could be brought forward for planning permission.
• We were aiming to reduce disagreement about whether sites are, or are not, suitable for housing development and whether these sites are effective. We also wanted to reflect the fact that the programming of sites (i.e. when they are built out) is determined by a range of wider factors and is subject to change.
• We were of the view that the potential impact of COVID-19 could mean that sites which might normally be considered 'effective' are not counted as part of the land supply.
• The changes we proposed in the consultation paper would mean that land that is technically suitable for housing could still form part of the 5 year effective land supply, regardless of changes to programming or subjective views on marketability in a changing context.

Views

As set out in our consultation analysis report there was both support, and opposition, to these proposals. In summary, the analysis of responses showed that there are strong and contrasting views on a number of issues:

• Amongst respondents who supported and opposed changes, there was, to a degree, a shared recognition of and support for agreeing a methodology.
• Those respondents who supported the proposal to revise the definition of effective land, did so on the basis that:
• There is concern about uncertainty and different interpretations of the existing wording of the SPP - clarity is needed to make the system easier to follow and transparent.
• There is a need to address disputes about the 5 year effective land supply and in particular programming assumptions.
• Communities reported damage to their area owing to the presumption.
• Calculations can conflate the matter of available land and the rate of programming of its build.
• There was support for clarification that ownership should include reference to a 'willing seller' as this is often a source of dispute.
• Alternatives were suggested including differentiating between the land supply and the delivery programme or judgements, a fuller definition and an approved source of evidence on completions. More detailed wording was also suggested for both the policy wording and the glossary. It was suggested that communities should be involved in Housing Land Audits.
• Other respondents opposed the proposal to revise the definition of effective land because:
• They would not clarify the situation and would have a significant impact.
• There is a lack of evidence to support the reasons.
• This should be considered within the context of NPF4 rather than interim policy changes.
• There is agreement on the importance of Housing Land Audits, although also some views on shortcomings and inaccuracies / as well as views that their figures are 'manipulated'. Nevertheless there was concern that the changes would undermine their role, leading to more confusion.
• Programming is considered essential including for action programmes and infrastructure providers.
• A more useful change would be to require sites to be in the hands of a developer to be considered effective.
• Exclusion of 'marketability' was considered irrational.
• Further alternatives suggested by those opposing the change included retaining the policy and the advice, or issuing informal advice on how planning authorities should adjust their approach to take into account the temporary / short term impacts of the pandemic.
• There was concern about removal of section 2 of PAN 2/2010^[x] given the need for clarity, although reasons for this vary.
• Stakeholders who supported and opposed the changes raised questions about the proposed reference to 'normal market circumstances'. Examples were provided of varying circumstances. Those who opposed the changes highlighted their view that demand in the market is currently strong and that there is therefore an urgent need for delivery to address this and assist with recovery from the pandemic through supply.

Evidence

The following evidence has been taken into account in reaching our final policy position.

Accuracy of information on site programming

Housing Land Audits play a key role in monitoring the availability and build-out of sites and so many of the responses focused on their role in the system. The responses included examples of current practice in undertaking Housing Land Audits and it was reported that programming within them is often inaccurate:

• Some examples were given of programming assumptions leading to a requirement to allocate further land, despite the fact that sufficient land was allocated at the point of plan adoption.
• Others reported that the audit process is 'largely harmonious' with limited disputes and Homes for Scotland stated that their members have not withdrawn sites from the effective land supply as a result of COVID-19.

We have previously undertaken research on Housing Land Audits including most recently work to inform our ongoing work on planning reform^[xi] as well as work in 2008 which assessed current practice at that time. The later research established that around 60% of audits were disputed, although the number of individual sites which are contested was low. Difficulties were identified in establishing completions and future site programming. Wider research reported by the Scottish Land Commission also highlights the role of the market absorption rate in defining build-out programmes.^[xii]

To further establish an evidence base to inform our consideration of the proposed changes, we built on this work by examining examples of Housing Land Audits. This work shows that:

• There are continuing difficulties in establishing completions and future site programming within Housing Land Audits, as a result of natural uncertainties and changing circumstances.
• Some audits overestimate completions in relation to their programme, whilst others underestimate them.
• Their findings with regard to the availability of housing land at any given point in time should be treated with caution.

Key points

We have therefore concluded that:

• We recognise that maintaining a land supply is important and should be more than a theoretical exercise.
• However, there is variation and uncertainty within Housing Land Audits and limitations on the extent to which the programming assumptions provide a reliable source of evidence.
• It is reasonable to expect that numbers of homes delivered during 2020 will be impacted by the closure of construction sites earlier this year and ongoing requirements for operational adjustments.
• We were also concerned about the exclusion of sites on the basis of marketability, and its impact on the ability of authorities to maintain a supply of effective housing land. To some extent industry reports and evidence of a more buoyant housing market emerging following the initial lockdown period allay these concerns.
• We also recognise views that our proposals could generate further confusion and are therefore not minded to remove PAN 2/210 at this time.
• Section 7 sets out our final policy amendments, taking into account these issues.