The Price of Planning in 2022

The Town and Country Planning (Fees for Applications) (Scotland) Regulations 2022 came in to force on 1 April 2022, increasing planning application fees in Scotland for the first time in eight years.

The Scottish Government estimates that, had the applications made in 2020/21 been subject to the new rates, an extra £1.2 million could have been raised from householder applications alone.  Planning authorities and developers alike are still reeling from the economic consequences of Covid-19, Brexit and global geo-political instability.  However, consultation responses to fee rise proposals since 2019 indicate that regulators and large developers are all broadly in favour of them.  There is recognition that Councils have been keeping the planning wheels turning despite being under-resourced.

While developers are willing to pay more, they will likely also demand more from a system that is already stretched.  The impact of additional funds on procedural efficiency is unclear, given there are no requirements to ring-fence or use planning application fees for planning application purposes.  Further, Councils must refund a fee where the application to which it relates is invalid.  A large number of applications are invalid when they are first submitted – for example, Aberdeen City Council estimates that 60% of its applications in 2018 were invalid.  This means a significant proportion of pre-validation work is routinely done by authorities, in effect, free of charge.

New Charges

Planning authorities have discretion to levy fees for certain applications which, until 31 March 2022, were generally free (or subject to a nominal administrative fee).  These include:  

• Written confirmation that planning conditions have been discharged, up to £100 per application.
• Non Material Variation application, up to £200 per application.
• Section 42 applications (seeking amendments to planning conditions), up to £300 per application.

Increased Charges

• The maximum fee for any type of application has increased to £150,000 from £125,000.
• The scale of fees for different types and size of development has been updated. For example, a standard ‘householder’ application fee has increased to £300 from £202.  Relevant application fees can vary, depending on the Council and the proposals concerned, and should be checked on a case-by-case basis.
• Applications for mixed use proposals involving more than one category of development will require fees to be calculated for each category.  The highest amount calculated will be the fee payable. It is not clear how this will apply where an application site affects more than one planning authority area.
• There remains an exemption from fees for repeat applications (for similar development, submitted within one year of the refusal or withdrawal of the original application). However, this is subject to more stringent conditions: the exemption no longer covers Planning Permissions in Principle and the site affected must be the same or within the previous red-line boundary (except where land is required for access).
• Retrospective applications can be used to regularise planning breaches, for example where a developer commences works without the requisite consent and seeks to prevent enforcement action.  From 1 October 2022, such applications could be subject to a surcharge of up to 25% of the application fee, i.e. costing the applicant up to 125% of the usual rate.  This is likely intended to discourage risk-taking (where developers are not sure if consent is needed and build on the assumption they can apply for retrospective consent later).  It will also encourage greater pre-application engagement with Councils (noting that pre-application advice is increasingly subject to fees also).

The regulations are silent on applications to vary or discharge Section 75 planning obligations agreements.  To date, most Councils have not charged an application fee for this but typically require applicants to pay the Council’s legal costs for formal deeds necessary to give effect to the changes sought.  

Authorities must publish their fees online so the cost should be transparent to applicants before embarking on the application process.  Authorities can choose whether or not to charge fees and, if they do, whether to charge the maximum amount allowed under the Regulations. In theory, a competitive pricing situation could arise, with authorities seeking to attract developers to their areas with lower fees.  In practice, though, planning fees are not key financial drivers behind larger developments and fee differences between authority areas are unlikely to be sufficient to influence a decision on where to build.

Please contact our Head of Planning, Jacqueline Cook, for further information.

Disclaimer 
The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers Stewart LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.