Wright, Johnston & Mackenzie Solicitors

Changes to Planning Fees

The Scottish Government is proposing to consult early this year on proposed changes to planning fees, by looking at maximum levels of fees and the different categories of development. The changes will seek to provide a new, proportionate structure ensuring fees reflect the cost of dealing with planning applications. There will also be more of a focus on performance by local authorities in processing applications, together with the introduction of a performance assessment framework.

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Zero Waste Regulations

The Scottish Government has announced that the date that the Zero Waste Regulations will be laid before Parliament has been postponed, possibly until March this year. It is therefore still possible to submit views to the Government on the Policy Statement on the Zero Waste Regulations which was published on 14 October 2011 and the Regulations. These can be found here

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Use of Suspensive Conditions for Aviation Objections

The Government has just published guidance on the use of suspensive conditions to deal with aviation objections. The guidance stops short of imposing any sort of ‘reasonable prospects’ test on the use of such conditions but it does suggest that in some cases some technical evidence that a solution could be delivered would be required.

It also clarifies that the South West Scotland Final Radar Feasibility Study which was produced in late 2010 should not, it itself, be used as a tool for assessing individual applications (as some parties have previously sought to suggest).

This marks an apparent shift in Scottish Government Policy and is in contrast to the previous statement on the Scottish Government’s website which read:
“… it is important that any such conditions which require subsequent approval by Scottish Ministers need to provide specification of the nature and extent of the mitigation measures required. It is also important that there is clarity about the identification of the type of solution or solutions to be developed and that there is agreement between the developer and the relevant operator that such a solution can be delivered in a reasonable timeframe. Where such specification and clarity can be made and agreed between the Developer and the relevant operator then we will consider the use of suspensive conditions in this way.”

The previous guidance appeared to impose a higher test in that it required agreement between the developer and the relevant operator that such a solution could be delivered in a reasonable timeframe. The new guidance does not appear to need agreement – only that there is evidence of the likelihood of a technical solution being delivered in a reasonable timeframe.  The guidance, which will eventually form part of the online replacement of PAN45, can be found here.

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Timescales for CPO’s

The Scottish Government has published indicative timescales within which Scottish Ministers will confirm a compulsory purchase order. The idea is to speed up the decision making process by which Scottish Ministers decide whether to confirm a compulsory purchase order. The indicative timescales for orders received by the Ministers now will be, in most cases, 4 months or 13 months if an inquiry is necessary.

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Occupancy conditions

In November, Jim Mackinnon issued a letter to all Heads of Planning to clarify the Government’s position in relation to the use of occupancy conditions. These conditions (or planning obligations secured by way of a s75 agreement) are commonplace in many parts of Scotland and seek to limit the occupancy of new houses in the countryside to those involved in agricultural business. The letter states, in bold type, that “the Scottish Government believes that occupancy restrictions are rarely appropriate and so should generally be avoided.”

The letter is of course qualified and states: “In areas where, due to commuter or other pressure, there is a danger of suburbanisation of the countryside or an unsustainable growth in long distance car-based commuting, there is a sound case for a more restrictive approach”.

Nonetheless, this new advice provides an apparent conflict with Circular 4/1998 which remains in force, which states:
“In many parts of Scotland planning policies impose strict controls on new residential development in the open countryside. There may, however, be circumstances where permission is granted to allow a house to be built to accommodate a worker engaged in bona fide agricultural or forestry employment on a site where residential development would not normally be permitted. In these circumstances, it will often be necessary to impose an agricultural or forestry worker occupancy condition.“

It remains to be seen how local authorities will interpret the new advice and whether they will reflect this is their emerging local development plans. It also remains to be seen whether it, in itself, will be enough to persuade a local authority that an existing occupancy condition should be removed from an existing consent assuming there is an overriding need for housing in the countryside.

Read Jim Mackinnon’s advice

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CPO – The importance of financial viability

The Scheme

In 2008, it was announced that a developer intended to build a £125m glass-fronted, 26-storey “6 star” hotel in Argyle Street in Glasgow’s International Financial Services District. The hotel was to be operated by the Jumeirah Group, who operate luxury hotels across the world.

The Developer behind the scheme had managed to negotiate a deal to acquire all but four of the properties on the site. The four outstanding properties which refused to sell comprised the city’s oldest pawn shop, a well established family-run restaurant and two tenanted flats (“the Objectors”).

The Developer approached the Council to ask them to use their CPO powers to acquire the outstanding properties, and proposed to immediately take possession of them after the compulsory acquisition had taken place

CPO Inquiry
The Council used its compulsory purchase order powers and the four owners lodged objections with the Scottish Government, triggering a public inquiry which was held in 2010. The Reporter had to consider whether making the order was necessary and whether there was a compelling public interest sufficient to override the property rights of individuals.

At the CPO Inquiry, the Objectors argued that to have a compelling case, it had to be shown that the scheme was financially viable and therefore deliverable. The Reporter accepted that whether or not the scheme was likely to be deliverable was a material consideration to be taken into account. This became a key argument. The Objectors argued that the Council had not put forward adequate evidence to show that the scheme was viable. The Council argued that it was not normal practice to have funding absolutely agreed at this stage and relied on various indications of funding from a lender.

The Reporter preferred the Council’s approach, but appeared to place the onus of proving that the scheme was not financially viable with the Objectors. In his Report, the Reporter said: “In my opinion the objectors have failed to establish either that the scheme is unviable or that funding would not be available…On balance, given the commitment and involvement of Jumeirah, the detailed appraisal work on both cost and value that has been carried out… I consider that it is much more likely than not that the necessary funding would be available for the scheme… and conclude that the weight of evidence shows that the scheme would be financially viable.” He went on to say: “No evidence has been led to demonstrate that the necessary funding would not be available.”

The reporter’s conclusions are also of interest since it is arguable that he failed to apply the strict necessity case. It is not clear from the Reporter’s findings whether he deemed the CPO to be necessary, rather than merely preferable, which would not be enough to satisfy the statutory tests. He noted:
“I accept the argument of the council that the compulsory acquisition of that land would be in the public interest because it would allow the development site to be available for the construction and operation of a prestige hotel development which would be of economic and other advantage to Glasgow, it would address strategic, local and other planning objectives, it would assist in improving facilities for tourism and meeting the national and local objectives for tourism, it would result in the redevelopment of a largely derelict site and contribute to the enhancement of the IFSD, and it would assist in providing accommodation for the Commonwealth Games. I recommend the Order be confirmed.”

The case demonstrates that deliverability is a material consideration. The Reporter appears to have approached matters by balancing the competing evidence from the Council and the objectors, rather than placing the onus on the Council to prove financial viability, suggesting that objectors may also have to set out cogent evidence that the scheme is not viable. Whether that is in fact the correct approach given the difficulties faced by objectors in proving that a scheme is not viable remains to be seen.

Latest Developments
The Objectors brought a statutory appeal against the decision, in the Court of Session. A hearing was set down for the end of last month, but it is understood that this has been postponed. The reasons for this are not yet known but the recent placing into administration of the developers by their lenders NAMA, may well be a factor. The Council officers have just issued a Report to the Councillors noting that NAMA has informed the Council that it cannot underwrite the costs which the Council have incurred to date and will incur if the CPO is confirmed. The Report recommends that no further action be taken by the Council in relation to the CPO.

Conclusions
It is unclear what the future holds for the Argyle Street site, but the prospects of a hotel of this nature being brought forward does seem unlikely in the current climate. What is clear is that local authorities need to satisfy themselves as much as possible as to the financial viability of schemes to ensure that they do not leave themselves open to unnecessary financial risk where the scheme subsequently does not go ahead. Given Glasgow City Council’s experience here it remains to be seen how effective the Scottish Government’s encouragement to local authorities to use their CPO powers will actually be.

Asked whether the hotel would ever be built, the Developer, Mr Price said: “I’ve no idea. I know nothing about it. I’m out of it, thank goodness.”

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