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Under item 3, the committee will take evidence from Scottish Government planning officials on the revision of Scottish planning policy 3. I welcome Stephen Garland, head of planning infrastructure and enforcement; Nicola Hay, senior planner; Brad Gilbert, head of the housing supply unit; and Jackie Wilkins, head of strategic planning.
Thank you for the opportunity to come to the committee today.
Thank you, and welcome to the committee.
There was no representative of student groups on the stakeholder group, which dealt largely with issues in the main part of the document. In asking about student groups, the member is probably interested in the annex on HMOs, on which we undertook a parallel exercise that involved engaging with relevant groups. We had several one-to-one meetings with organisations, including student groups, and we organised a seminar that brought together various stakeholders from community groups and which involved the National Union of Students and several student associations.
Did that happen prior to the publication of the consultation document?
The one-to-one meetings were held prior to the publication of the document. The seminar was held during the consultation exercise.
It might be more appropriate for me to put my next question to the minister rather than to officials, but you can decide that. Can you explain the rationale behind producing a planning document on the key issues of housing and land supply, given that the housing supply task force has the remit of wrestling with those issues? You have published the consultative draft of SPP 3 ahead of the findings and recommendations of the housing supply task force—I do not think that it is going to produce a report. How does the housing supply task force fit in with the timetable for this planning policy?
The housing supply task force focuses more on short-term issues. It considers developments that are coming through the planning system or are in a plan, how they are being taken forward and where there may be blockages and problems. For example, it might look at a situation in which permission has been granted, but there are difficulties with delivery. The task force has a shorter-term focus in the work programme that it has developed for itself. SPP 3 has more of a medium-term focus, as it informs the development of development plans, which has a longer timescale. However, there is interaction between the two processes, and the task force can have an impact on the consultation exercise involving SPP 3.
I am not sure that the housing supply task force's job was described in that way previously. You make it sound as though it is a problem-solving group that will consider developments that are sticking in individual communities. That is certainly not the way in which it was described previously. However, I accept that that issue is not necessarily for you.
Are you referring to the release of public land?
In paragraph 81 of SPP 3, you say that you want authorities to identify land from both the public sector and the private sector for affordable housing. Is that aim meaningful if you do not also give them the power to make land available at less than market value? Also, is it realistic, given the pressure on local authorities to maximise income from the sale of assets?
To a degree, the reference is to quotas under PAN 74, which set the 25 per cent benchmark and gave guidance on the transfer and valuation of land.
I welcome the fact that you have transposed the 25 per cent benchmark into draft SPP 3. Has there been any monitoring of the effectiveness of setting such a benchmark? For example, "Firm Foundations" makes no mention of it. The test in other policy areas such as HMOs is whether policy really delivers. What work has been done on that?
You make a valid point. Having come through only in 2005, the benchmark is still a relatively recent development in planning policy terms. We have undertaken a monitoring exercise to assess its impact, and the results will be released shortly. We will take account of the findings in formulating the final version of SPP 3.
I understand that the Government's objective is to increase the rate of construction of new housing in Scotland from the present level of about 25,000 houses a year to 35,000 houses a year by 2015. Is that correct? Is that the policy background?
That aspiration was set out in "Firm Foundations", and responses to it are being analysed. A decision on the final policy will be announced later in the summer. The aspirational target was 35,000 by the middle of the next decade.
Right. To what extent is the target achievable in relation to the local development plans that are in force and the amount of land that authorities have allocated to or earmarked for housing development?
Your question brings into play issues in the consultative draft of SPP 3, including the process of allowing greater focus on the identification not only of affordable housing need but wider housing requirements. A more generous approach to identifying the land that is required to meet such need has been taken. The new housing need and demand assessment guidance that will be incorporated in the revised SPP 3 will drive that forward. The Government will keep under review the question whether the 35,000 aspirational figure can be met by the middle of the next decade. We will monitor that.
That was not my question. I asked whether the 35,000 aspirational figure can be met from within the housing element in local development plans. Having looked at all the local authority development plans that are currently in force, is it the Government's view that the target can be met? If not, will changes have to be made?
Changes will need to be made, because the plans that are currently in force in effect provide for land over a five-year period, whereas the 35,000 aspirational figure is to be met by the middle of the next decade.
But is enough land being made available under current plans to meet that target by 2015, or will more land need to be allocated?
At this stage, I cannot say whether under current plans sufficient land will be provided to meet the 35,000 target. I can come back to the committee with a more precise answer.
What I am trying to get at is that, as part of the roll-out of the Planning etc (Scotland) Act 2006, development plans are supposed to be updated. Obviously, areas for housing are allocated in those local development plans. No doubt the Government's aspiration is that those allocations will allow it to meet its 35,000 a year target.
In the current plans, sufficient land is allocated to meet identified housing need, according to the current processes. In draft SPP 3, we propose the use of new methodologies for assessing housing need that take account of broader housing requirements. The expectation is that local authorities will use that methodology to allocate in new plans more land than is currently allocated.
So more land for housing will be allocated in the new plans in order to meet the target. That is the point that I was trying to get at.
The new plans will allocate more land in order to meet the identified need and the identified housing requirements.
But that need is perceived by the Government to be 35,000 a year.
That is the aspiration for the national figure—
What is the point in having an aspiration that is not needed? If we do not need 35,000 houses a year, what is the point of having such an aspiration?
Perhaps the issue comes down to terminology. In planning terms, need is described as affordable housing need—people who need housing. We refer more broadly to housing requirements in terms of need and wider market demand.
The committee might agree to put some of those questions to the minister.
Perhaps I can shed some light on the 35,000 figure. In June last year, the Government published a housing market review, which concluded that not enough houses were being built and that housing supply was not sufficiently responsive to market conditions. As the committee has previously heard, house prices were 72 per cent higher in 2006 than they were in 2002, while levels of new build increased by only 2 per cent. The proposed goal of building 35,000 new houses a year reflects a range of analysis and evidence that were drawn together in the market review. The review concluded that a substantial increase in housing supply could be sustained by the market and would have a significant impact on affordability. The 35,000 figure—an increase of 40 per cent over current levels—is consistent with that. The point is that the proposed goal will set local authorities, developers and builders a challenge to increase supply by 10,000 a year by the middle of the next decade. We are setting an aspiration and we are looking to local authorities, developers and others to respond by ramping up supply.
Is that goal achievable in the context of the roll-out of local development plans? Will more land need to be released for housing outwith the roll-out of those plans—separate from all the accompanying community engagement processes—in order to meet the target?
Stephen Garland might want to add to this, but I think that SPP 3 includes a facility to accelerate the release of land where that is required to meet identified need. That can be done.
Can it be done outwith the local development plan?
There is provision for that. The key point is that the new methodologies and guidance that are being put in place for the next round of plans should take account of wider housing requirements and should result in the allocation of sufficient land to meet those requirements. The processes that have been put in place by SPP 3 to ensure greater consistency in the use of housing land audits and to monitor the plans will form part of how we assess whether the aspiration to provide 35,000 new houses will be met or exceeded. The issue will be taken into account as we move forward into the next round of plans.
Recently, there has been some interest in the HMO issue. What evidence has the Government gathered from people who are for and those who are against HMOs, especially in relation to the concentration of HMOs in particular areas?
There is evidence on studentification from Universities UK, which looked at the potential difficulties that are associated with having large numbers of students in communities. The cities that it mentioned were Brighton, Canterbury, Loughborough, Manchester and Nottingham. The University of St Andrews also commissioned a study of the housing market in St Andrews. Both studies focused on the impact of having a concentration of students in an area. There has also been extensive engagement with stakeholders, including many elected officials, who have put forward their constituents' views on HMOs. We have had face-to-face discussions and have held a seminar with a number of interested stakeholders from community groups and representatives of the users of HMOs.
Is the Government's view, as set out in draft SPP 3, that local authorities should not be encouraged to pursue licensing of HMOs, or does it intend to leave that option open to them? Does the Government take a view on licensing?
Licensing is an entirely separate issue and is a legislative requirement that is to do with the quality of HMOs and the way in which they are used. Planning relates more to the amenities in local areas and to the concentration of HMOs. Draft SPP 3 advises local authorities that they already have powers that enable them to consider issues relating to the concentration of HMOs and that, as part of their wider housing policy, they should consider using those powers, where appropriate.
You rightly understood that I was thinking of planning, rather than licensing. Am I right in saying that the size of an HMO determines whether it falls under the licensing regime or the planning regime?
Different definitions are used for licensing and planning. The Government takes the view that applying the same fixed numerical threshold for planning purposes that applies for HMO licensing purposes would require a change to the definition of "development" in the Town and Country Planning (Scotland) Act 1997. It is clear from experience that not every increase in occupancy involves a material change of use. Having a fixed threshold at which planning permission was required might lead to the anomaly of there being nothing for the planning system to consider in cases in which no material change of use was involved, although the number of people in a house had increased.
How does what you are doing fit in with the Government's wider review of the private rented sector?
Our work, which is solely concerned with planning, is parallel to the review of the private rented sector, which is about licensing and housing policy issues. HMOs have been raised as an issue because of their concentration. Draft SPP 3 gives wider guidance on the operation of licensing to inform planners as part of their wider remit, but it is specifically concerned with whether authorities should give consideration to having a policy on the concentration of HMOs in a particular area.
I understand that many members have received representations about HMOs. Alasdair Allan has covered a lot of ground, but does any member want to ask a specific question about HMOs before I go back to my list of members who want to speak?
Yes.
Yes.
Fine. Jim Tolson will be followed by Patricia Ferguson. Bob Doris indicated previously that he wanted to ask some questions on this area.
It is certainly a concern that the Government's "Firm Foundations" consultation document seeks not only to make greater use of the private rented sector, but to limit the number of HMOs in particular areas. I contend that that would worsen the situation, with a greater push for accommodation being experienced in more areas. Where does the Government think that the students will go if not into areas where HMOs are already concentrated? The need will still be there, regardless of whether a cap is put on certain areas.
First, I should say that we are not talking about imposing quotas. Some cities already have policies on the concentration of HMOs. A balance will have to be struck, and in deciding what is appropriate for their area, local authorities will have to take into account their wider housing concerns and the concerns that might be expressed by local communities.
How does the Government see the licensing regulations for HMOs interacting with planning regulations? Sometimes there is a problem with those two different parts of the system not necessarily complementing each other, or dovetailing well with each other.
Each system is designed to do different things. Planning focuses on the availability of services and amenities, and licensing focuses on ensuring that HMO properties meet certain safety, physical and management standards. Some local authorities have difficulties in enforcing both processes, but it is for them to set their fee levels to cover enforcement costs.
I accept that they are meant to do different things, and quite rightly so. Licensing HMOs was introduced to prevent tragedies such as the one that happened in my constituency when two young men died.
Planning and licensing officials from different authorities attended the seminar that we held during the consultation exercise. A good amount of discussion took place about using internal processes and having greater interaction between the two areas. The impression that I took away is that internal processes provide a facility for dealing with such matters. Positive moves may already be taking place in some cities, which we encourage. We want to examine them and take the issue further.
The Government could certainly take a lead and encourage local authorities. In places where quotas are being suggested or recommended, what should trigger a decision on that?
The local authority should take a balanced decision that reflects the impact on wider amenity and services in the community—that applies not just to housing for students, but to housing for other uses—and the area's housing requirements. You have strongly raised a concern that we all have, which is that action should not push a problem away from the licensing regime. We must not end up with HMOs being created without any licensing control. We have been aware of that concern in discussions with local authority officials. The issue involves a balance. Although it is something for local authorities to take account of, they should do so on the basis of advice from their planning and licensing enforcement officials.
That is helpful. My experience is that although some communities identify genuine problems with the operation of some HMOs and perhaps with the quantity of HMOs, a bigger problem is the unlicensed HMO—that is a problem for the community and the HMO's occupants. Anything that can be done to show that nothing will happen to push operators of such premises down an unlicensed route would help. We would all be concerned about any move in the unlicensed direction.
That point has been made during the consultation exercise and we are reflecting on it in drafting the final policy.
My concerns are similar to Patricia Ferguson's—perhaps some of the same people go to our surgeries. Some residents have told me that when they contact the council about an issue with an HMO, the council might tell them that the HMO does not have planning permission, although it has an HMO licence. Communities lack understanding about how the whole system works and whether there is any correlation between planning and licensing. The idea of making a lack of planning approval a reason for not issuing a licence is seductive, but I understand that the danger of that is that fewer HMO landlords might seek licensing approval and safety standards might not be maintained. I am curious to know whether any scoping exercise has determined the knock-on effects of linking planning with licensing in that way.
I am not aware of data on the knock-on effects of linking planning and licensing—I assume that you are suggesting that a licence would not be granted if planning permission had not been given.
Yes. That could be a reason for refusal.
I am not aware of data on that. As I have said, the issue relates to enforcement of the two regimes and ensuring that, when an HMO that does not have planning permission should have it, planning enforcement action is taken to bring that HMO into the system.
That almost pre-empts my next question, which is about enforcement. I have received feedback from councillors who have been working with constituents on HMOs that do not have planning permission but are licensed. Constituents might ask local authorities what they are doing about a particular HMO that does not have planning permission. There are issues about the speed with which authorities can move to enforce licensing provisions. The level of fine at the end of the process might not be sufficient to deter a rogue landlord, who might not really care about planning or licensing. The process has to be speeded up, rather than there just being a heavier fine. Have you given any thought to how to make the process quicker?
Your question is largely about broader planning enforcement issues. The 2006 act provided for new powers to issue fixed-penalty notices, which are designed for the kind of situation to which you are referring. Under the proposed regulations, where a rogue landlord or occupier does not intend to respond to a notice, the authority will be able to issue a fixed-penalty notice instead of having to go to court.
Is any further guidance being given about what constitutes a defined block for HMOs for a local authority? I have been working with residents of an area in Glasgow who have asked the council how many HMOs there should be in that area. The council will give a percentage for the area. The residents want to know what constitutes their area—is it their street, their block, their stair or their postcode?
It depends on the local circumstances. In Glasgow or Edinburgh, a tenement stair might be the main focus. In one of the smaller towns, such as St Andrews, it might be a street. We will consider the consultation responses on that issue. My first thought is that that is an issue on which local circumstances will have to be taken into account.
Am I right in thinking that the issue of quotas would be addressed through the local housing strategy and the development plan? That is the stage at which it would be identified whether there should be a quota, how much the quota should be and where it should be. Are you asking local authorities to be as explicit as that?
Local authorities currently have that power. Some of them already undertake such an exercise.
When a local authority is mapping housing need across its area—sometimes such mapping exercises are undertaken with other local authorities where there is a crossover—it would identify whether it needed a quota and what that quota should be. I am quite surprised that you are suggesting that authorities would be looking at individual closes in deciding what the quota should be.
It is up to the local authority. I understand that Glasgow City Council already has a policy on that. I cannot tell you precisely whether it focuses on blocks or stairs, but—
We need clarity on that. There are anxieties about local authorities being expected to identify a quota.
Perhaps we need to be clearer about that in guidance. We are saying in the consultative draft that local authorities should be expected to consider whether they need a policy on quotas. It is up to the local authority to decide that.
There are two issues around enforcement on which I would welcome your comments. The first is quotas. My understanding of the problem is that authorities can identify a quota and have a licensing scheme, but the two things never come together. Even where authorities say, in general terms, that they want a community to be a mixed community and that there ought not to be more than X per cent of HMOs, they cannot take that into account when they grant licences for HMOs. How will what is in the draft SPP make a practical difference in bridging that gap? I do not think that people are clear about that.
The serious charge that the policy may create unlicensed HMOs, which Patricia Ferguson also raised, is valid. A careful balance needs to be struck when a local authority decides whether to have a policy on concentrations and when the licensing officers and others give their views on whether it will create unlicensed HMOs.
How would the mechanism by which the planning quota affects the granting of a licence work?
That goes back to closer working practices between planning and licensing officials. Bear in mind that it would not affect a situation in which it could be said that there is an overconcentration of HMOs. It is not about taking back licences but about going forward, and many of the concerns are about existing areas of HMO concentration. There is scope for closer working between the two parties. Policies are in place and seem to be working, but there is an issue with enforcing them when an HMO is found not to have planning permission. I did not make it clear earlier that the mechanism is about forward planning permissions, not about reversing a situation.
We are in the process of preparing new guidance for local authorities for the next round of local housing strategies. We will encourage local authorities to consider houses in multiple occupation as they prepare those strategies.
So if it appeared that local authorities were jumping to quotas, the local housing strategies would be resisted on the basis that there was no evidence that the quotas were necessary.
Yes. Through the housing need and demand assessment process that local authorities are being encouraged to undertake, it would be evident if policy conclusions had been reached that were not supported by what was happening on the ground. We are encouraging local authorities to put together a robust evidence base, from which they will be able to work out the practical responses that they need to make. We should not have a disjuncture between what is actually happening and what a local authority intends to do to resolve the issues.
Mr Gilbert talked about the assessment of the housing market that was made in June 2007. There had been a 76 per cent increase in house prices in a four-year period but only a 2 per cent increase in supply. He said that the Scottish Government took the view that there was an opportunity to increase supply by about 40 per cent by 2015 to tackle the high demand in the system, which is forcing up prices. However, it is surely time for a reassessment of the situation because of the horrendous problems that have been caused by the collapse in the banking system on the American side of the Atlantic and the shock waves that have hit over here. If people have great difficulty getting mortgages or if they have to pay 25 per cent mortgages, that will impact on demand and, as a result, supply. Has the Scottish Government assessed, or does it plan to assess, the impact of the changes in the past few months so that its plans can be revised accordingly, if necessary?
Yes—assessment is being carried out as we speak. The Scottish housing market review to which I referred predicted the general slow-down that has been witnessed in the Scottish housing market. Most commentators expect that to be the general picture in the coming year. The rapid tightening of credit in recent months and the banks' reduced ability to lend were less predictable when the review was carried out. As we are all aware, the situation has resulted in reduced mortgage choice and lenders managing down demand by tightening lending criteria, increasing price and withdrawing mortgage products.
How will the policies in draft SPP 3 enable an increase in house building, given the changed circumstances?
SPP 3 seeks to ensure that there are sufficient land allocations to meet assessed local housing requirements. It is designed to deal with the need for a more responsive planning system, which is a precondition for ensuring that we get the appropriate land allocations and the requisite housing supply.
If there is much higher demand in one area than in others, will the plans be flexible enough to enable targets to be met, given the issues of land supply that Mr McLetchie raised?
SPP 3 proposes a more robust process for identifying the housing requirements of development plan areas, which should be taken into account fully in the land allocations in development plans. Plans should be responsive to data on housing requirements.
Committee members may agree that it would be useful for us to take evidence from the Minister for Communities and Sport on that point, which goes to the heart of the issues of availability and affordability. Although we have concentrated on the link between houses in multiple occupation and students, we need to remember that HMOs are also used by groups such as incoming workers, which has an impact on our communities. The concerns relating to that issue are similar to those that arise in relation to HMOs used by students. It all goes back to the availability of land and our ability to create affordable housing, especially in a market where it is becoming more difficult for people to afford a first home and a mortgage. We could have a useful session with the minister on that point. I thank our witnesses for their attendance today and for the evidence that they have given.
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