A new means of capturing land value uplift in Scotland?

A new means of capturing land value uplift in Scotland?

A new means of capturing land value uplift, in the form of an infrastructure levy, is identified in the Planning (Scotland) Bill. Can this be used to strengthen the scope for planning to support the delivery of development?

The Planning Bill was introduced to the Scottish Parliament on 4 December 2017. 

The current review of the planning system in Scotland has been ongoing since September 2015 when an independent panel was appointed by Scottish Ministers. It is now at a critical stage; the laying before Scottish Parliament of the Planning Bill. The Bill is an important element in a wider programme of work to strengthen planning's contribution to inclusive growth and empowering our communities. The Planning Bill will firstly be subject to a rigorous scrutiny period by the Scottish Parliament, followed by a collaborative programme of work, including drafting secondary legislation under existing powers, and other, non-statutory approaches, which will ultimately lead to the approval of a new Planning Act.

A principle objective of the planning review was that more needs to be done to support housing delivery. The timeous and effective delivery of infrastructure was identified as critical to the delivery of housing. Effective infrastructure planning can ensure that places function properly and development improves, rather than detract from the quality of life – an ‘infrastructure first approach’.

Building more homes and delivering infrastructure was one of four key themes of the planning review. A new means of capturing land value uplift, in the form of an infrastructure levy, was identified as a charging mechanism that could be used to strengthen the scope for planning to support the delivery of development.

Infrastructure levy

The Bill includes enabling provisions to allow for a community infrastructure levy to be brought forward through secondary legislation. The infrastructure levy has been informed by research led by PBA on behalf of Scottish Government to identify and assess the options for the introduction of an infrastructure charging mechanism in Scotland. The first two stages of the research were published in January 2017, and the final Stage 3 (including the Executive Summary) was published in November 2017.

The Bill confirms that the levy will be payable to the local authority, and will sit alongside development obligations secured by s75 or similar type agreements. Secondary legislation may include provisions preventing the grant of planning permission until the levy has been paid. This could indicate a difference from the English CIL system, where the levy is payable on commencement of development, not grant of consent.

Way forward

The Bill is now under the control of the Parliament. We expect that the Local Government and Communities Committee will issue a call for evidence shortly, to inform its scrutiny. We would encourage you to give the Committee your views. PBA can support you in this, based on our intrinsic involvement in the planning review process since 2015.

Please do not hesitate to contact Stefano Smith to discuss further.

Stefano Smith

Stefano Smith

Director – Planning

  • Edinburgh and Glasgow
  • 07741 306628