Official Report 1128KB pdf
Town and Country Planning (Fees for Appeals) (Scotland) Regulations 2025 (SSI 2025/124)
Town and Country Planning (Fees for Local Reviews) (Scotland) Regulations 2025 (SSI 2025/126)
Good morning, and welcome to the 16th meeting in 2025 of the Local Government, Housing and Planning Committee. I remind all members and witnesses to ensure that their devices are on silent.
Today’s agenda includes consideration of the Housing (Scotland) Bill at stage 2. We have permission to continue our meeting into the afternoon, so we will be suspending proceedings at around 12:30 until 20 past 2. We might therefore pause item 4 to take item 5 and then return to item 4 after the suspension.
First we have an evidence-taking session on the Town and Country Planning (Fees for Appeals) (Scotland) Regulations 2025 and the Town and Country Planning (Fees for Local Reviews) (Scotland) Regulations 2025.
I welcome to the meeting Ivan McKee, the Minister for Public Finance, who is joined by the following Scottish Government officials: Thomas Barratt, head of development management; Scott Ferrie, deputy director and chief reporter, planning and environmental appeals; Andy Kinnaird, head of transforming planning; and Chris Sinclair, policy manager. Thank you for coming.
We will move to questions from members, and I will start. We have heard from developers that the introduction of fees for planning appeals and reviews could act as a disincentive to development, including the development of much-needed new homes. I would be interested to hear your response to that suggestion, minister.
It is important to recognise that planning appeals cost money, so somebody has to pay for them. The principle in the Scottish public finance manual is that the appellant should pay rather than the taxpayer.
We recognise that we are in a housing emergency. There are also many challenges in relation to the climate emergency, biodiversity and nature, and other challenges arising as a consequence of those. The planning system looks at all of that in the round, and there is a well-structured process. If people feel the need to appeal decisions, it is only right that the appellant, rather than the taxpayer, should carry the cost.
Okay. Thank you.
Some of the evidence that we have received from stakeholders suggests that the introduction of fees for planning appeals and reviews favour the more well-resourced developers. What is the Government’s take on that? Do the fees deny an appeals process to some developers, particularly small and medium-sized enterprise developers? There has been a contraction in the number of SME developers across the country, but they are key, particularly when it comes to rural and brownfield development. When the Government carried out the business and regulatory impact assessment on the instrument, what assessment was made of the impact on SME developers?
I am very conscious of that, of the need to build more houses in general and of the role that SME builders can play in specific situations. The bulk of building is done by larger house builders but I recognise the important role that SME builders can play in that area.
It is important to recognise the cost of the appeal—and I mean the cost, not the fees involved. When you make an appeal, the fact is that, regardless of its size, certain things need to be done. Some of the cost will be proportional, depending on the number of units; however, the very process of going through an appeal incurs a significant cost to the public purse, and we think it only right that those costs be carried by the appellant.
When we look at it through that lens, we can see that, with smaller developments—which, by definition, will most likely be built by SME builders—we recover less of the cost then we do for larger developments. So, if we were to implement a system that reflected more accurately the costs of conducting an appeal, the charges for SMEs would, under these proposals, be significantly higher than they currently are.
On the point about cost recovery, is the level of fees in the new system designed to cover full cost recovery?
Yes. We do not know how many appeals there will be or their complexity, but, in general, that is the intent.
Did the initial consultation not make it explicit that it would not be aiming to achieve full cost recovery?
Across the whole planning system, we recover only about two thirds of the fees from applicants. That is a long-standing issue that we are seeking to address by linking fees with inflation. My officials can speak to the specifics of the consultation.
We consulted on the principle that we were not going to charge for full cost recovery but, as the minister has highlighted, financial circumstances have changed significantly in the period since. We also looked at how best to ensure that the planning system is appropriately resourced. The Scottish public finance manual sets out that, as the minister has also highlighted, our initial position should be one of full cost recovery. We should not deviate from that unless there are clear reasons for doing so, and there is a set period of time in which we will remove any subsidy in that respect.
I appreciate the point about the public finance manual and public finances in general. However, do you accept that, if you consult on the principle that you are not seeking full cost recovery and then lay regulations that, as you have just said, seek full cost recovery, there is a disparity? There is clearly an issue with the consultation and how the Government has set out the principles of what it intends to do.
It is important to recognise that the costs need to be recovered from somewhere. If we do not recover them through this process, they will have to be covered by councils. I think that everybody around the table will agree that councils are in a challenging financial situation, and everyone involved in the planning system and the development of housing will recognise that it is important to get more resource into the system. This is one way of doing that. If we did not raise the money through this route, we would need to raise it through another route, but I think that this is the most effective way—that is, by charging those who seek to make an appeal on that basis. We will be able to get more money into the planning system through that route, rather than through any other route.
I appreciate that this is a point of principle for the Government. What I am saying is that you consulted on a different basis to that of the instruments that you have introduced. Do you not think that there is an issue with consulting with developers and the sector on one basis, and then introducing regulations that do something else?
We consulted on the basis of there being planning fees; clearly, there are people who would not want us to introduce planning fees for appeals, because they would have to pay them. However, we did consult on that basis, we gathered views and we took them into account, and the Government has made proposals that we think are the right ones, given all the factors that have been identified. If somebody is saying that we should not raise the money through that route, they will need to be clear about where else we can raise the money from to cover that fiscal gap. It would have to happen either through councils having to take resource from other budgets or through an increase in planning fees more generally.
My final question is on access to justice. The Law Society of Scotland and Homes for Scotland have raised issues about the lack of any option for a fee waiver or refund of a fee. What consideration has the Government given to fee waivers or refunds, given that we know that more than 50 per cent of applications are granted on appeal?
There is scope for that in specific circumstances. More generally, though, if you are talking about making a refund or fee waiver conditional on the outcome of an appeal, that takes us into a space that is not conducive to what we are trying to do, because it means that the decision on the appeal has a financial implication that could impact the decision-making process. If people want to take forward an appeal, an important principle is that the appellant should, by and large, pay for it. The planning process should run on the basis of the information that is in front of the person making the decision and should not run the risk of that decision being influenced by any financial consideration.
Good morning, minister. You are on record as saying that
“Planning has not created the housing emergency, but it can help us to find solutions to the challenges that we face.”—[Official Report, 12 November 2024; c 12.]
Surely what is being proposed here goes against what you have previously said about trying to secure more planning developments in order to tackle the housing emergency. As Mark Griffin has rightly asked, will the fact that the consultation said one thing but you are going to do another squeeze out SMEs?
No, I do not think that that is the case at all—quite the opposite. What that does is to get more resources into the planning system, which everyone recognises requires extra resources. As I have said, the data shows that, on average, local authorities recover only about two thirds of the cost of running the planning system from fees, so it is important that we address that. A range of measures has been taken, including linking fees with inflation, to support resource going into the planning system, which everyone will tell you is a significant part of the problem.
On the issue of SMEs, I have already addressed that point. If we charged for smaller appeals according to how much it costs the system to process them, the cost of smaller appeals would be higher than it is in the proposals that we are taking forward. We recognise that the fees need to be weighted more heavily against larger developments than against SMEs, and that is embedded in the proposals that we are taking forward.
If small and medium-sized developments cannot progress, though, that will not help tackle the housing emergency. Is that something that you would charge for?
It is the same with any process. The appellant would take a view on whether they wanted to proceed with the appeal, as they do when they make an application at the beginning of the process, because there are costs associated with that, too. If you are saying that we should not charge any planning fees at all, which is a logical extension of what you are saying, you would find resistance to that. If you are saying that we should not charge any fees at all, because it would encourage more people to bring forward housing development proposals, the problem would be that we would not have a well-resourced planning system. Everyone recognises that underresourcing is a particular challenge that we need to address.
I understand the point about underresourcing, but that is due to years and years of underfunding of local government.
We need to get back to the consultation point, if we can. I am concerned that you have consulted on one area, only to ignore the responses that you have received and decide to take different action. How will you restore confidence, particularly in the SME sector, that you will not make another decision in future that will go against the consultations that you have made in that particular area?
We consulted on the principle of fees for planning appeals and have taken on board the consultation responses. As I have said, there will of course be people who would be happy not to pay any fees for appeals—they would be delighted not to have to pay any planning fees at all—but that is not the world that we live in. We recognise that it is important to be able to resource the planning system. We recognise that there is a gap, as a result of only about two thirds of the cost of the planning system being covered by fees.
We have taken a number of measures, including the one that we are discussing and others to do with index linking and so on, to ensure that a higher proportion of the cost of the planning system is covered by fees than is the case at the moment. We think that tackling the resourcing issue that planning faces is an important step—of course, there are many others that need to be taken—in ensuring that the planning system is able to support development and tackle the housing emergency.
08:45
I want to go back to a question that we have already touched on. Why should an appellant who receives planning permission on appeal pay for the appeal, given that they will already have paid the planning authority for the original application, which might have been rejected because the authority imposed unreasonable conditions on the awarding of planning permission? The appellant will already have stumped up money, so why should they contribute more to the process?
It is important that we separate the cost of running the planning system from the cost of the appeals process, which requires to be funded separately from the taking of decisions as part of the planning process. As I have said, in the planning process, decisions will be based on the information that is in front of the planning authority at various stages of the process. It is important that the process runs on that basis, and that is separate from the issue of the fees that are charged, which, as I said earlier, are to cover the cost of running the process.
Do you think that the fees will cover the running of the process?
As I have said, at the moment, only about two thirds of the total costs of the planning system are covered by planning fees. We have sought to ensure that the costs of the appeals will be covered by the fees that are charged, but, as I have said, the total costs of the planning system are not covered by fees at the moment.
On the same subject, I note that, under the Verity house agreement, it has been agreed with local authorities that funding will not be ring fenced. Concerns have been raised that, if a fee is charged for local reviews, that money will not go to local planning authorities. It would be interesting to hear what discussions you have had about ensuring that the money that is raised does what you have said, which is to help improve the system.
That there should be no ring fencing is an important principle. If we were to say, “We’re gonnae tell local authorities how they should spend their money”, I think that the committee would have something to say about that. That is an important point to recognise.
However, we have made it clear that we expect local authorities to use the money that they receive through the planning system—whether from fees for applications or fees for appeals—to resource the planning system. At the moment, councils are having to put extra money into the planning system in order to be able to process the applications and appeals that are in front of them.
The important principle that there should be no ring fencing, which we agreed through the Verity house agreement, is in place, but, as I have said, I would encourage local authorities to utilise the resource that is generated to support the planning system.
What about the planning appeals that come to the Scottish Government? How will those be managed?
It is the same process. The fees that come to the Scottish Government for those appeals are calculated as being sufficient to cover the costs of processing the appeals through the system that the Government has in place.
We have raised a number of concerns. How will the Scottish Government keep the system under review to ensure that it does what you have set out that it will do? Do you envisage some sort of annual review?
We monitor the data on the number of appeals, the level of fees and the amount of resources that come into the system on a regular basis, and we will continue to do so. If we found that there were issues, we would look at them.
The committee can commit to keeping the matter under review, too.
The issue of planning fees fits into the bigger picture of the challenges that we have discussed around resources for local planning authorities. One feature of that bigger picture is the fact that not enough new planners are coming in through the pipeline, which is related to the lack of places for people to train as planners in Scotland.
It is a moving piece, with lots of parts. I note in our papers for this morning that it is hoped that the fees will lead to better applications in the first place; however, I have been picking up, certainly in my regional work, that planners used to meet developers and go on site, but that seems to be happening less. The experience for developers now, especially for SMEs—certainly in the Highlands and Islands; maybe it is a distance issue—is that they are not getting on-site information and good up-front insight as to what the local planning authority is looking for in relation to building height, roofing materials and so on. As we have more planners retiring and younger people coming in, we are possibly losing something if there is no transfer of knowledge.
There is something in the mix there, which is beyond these SSIs—I understand that—but I want to put that out there and get your thoughts on it.
I do not know the specific local cases that you are referring to, but in general, with regard to resourcing, we have taken significant steps. We have trebled the number of bursaries for planners coming through the system, which the Government is paying for, to help address the resourcing challenge. We have also hired a significant number of apprentice planners into the Government, which, again, the Government is paying for, to support the training of more young—and not-so-young—people who are coming into the system.
I have carried out a significant number of events with young planners to support and encourage them, and to look at routes for others who are mid-career and are seeking to come into the planning system. We have done quite a bit of work on the resourcing piece and on skills.
On best practice, the work that Craig McLaren, the national planning improvement champion, has taken forward is significant. It has involved peer-to-peer reviews across all 34 planning authorities, and the work that has come out of that has helped him objectively identify what best practice looks like and how planning authorities can learn from one another to improve the service that they offer to applicants.
You are absolutely right that having an informed conversation early in the process is better for everybody. It helps applications be of a higher standard, and it allows the applicant to understand what the planning authority is looking for when making its determination.
I appreciate your reflections. We do not have any more questions.
The next item on our agenda is consideration of the two negative instruments, the first of which is the Town and Country Planning (Fees for Appeals) (Scotland) Regulations 2025. If members have no comments on the instrument, does the committee agree that we do not wish to make any recommendations in relation to it?
Members indicated agreement.
The second SSI is the Town and Country Planning (Fees for Local Reviews) (Scotland) Regulations 2025. If members have no comments on the instrument, does the committee agree that we do not wish to make any recommendations in relation to it?
Members indicated agreement.
Thank you. I will suspend briefly to allow a changeover of witnesses.
08:53 Meeting suspended.Previous
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