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Fundamental rethink needed for Scotland’s approach to land development

The Scottish Land Commission is calling for a “fundamental rethink” of Scotland’s speculative and market-driven approach to identifying and allocating land for development.

As the Government’s Planning Bill reaches stage 3, the land reform body advises that a more collaborative approach to development, in which the public and private sectors share risks and reward, should be a long-term aim.

The Commission also recommends initial steps to improve the way in which development land value is reinvested to support viable and high-quality places.

As next steps the Land Commission is recommending that the Scottish Government:

  • Undertakes a national review of developer contributions (Section 75 payments) that are often used to fund on-site infrastructure, needed to make developments acceptable in planning terms;
  • Implements a new infrastructure levy as set out in the Planning (Scotland) Bill that could help fund infrastructure improvements; and
  • Requires that masterplans in the new Masterplan Consent Areas (MCAs) provide detailed costings for the infrastructure they need.

Today’s recommendations follow on from recent policy debate around land value capture; this recognises that land increases in value depending on surrounding infrastructure, its location and planning rights, and that this increase is captured to fund infrastructure.

Ways in which land value capture could be used to generate public benefit, was one of the first things the Commission was asked to investigate by Government, when it was created in 2017.

Speaking about the recommendations being put forward to Scottish Government this week, Shona Glenn, Land Commission head of policy, argued that perhaps it was time to stop talking about “land value capture” and start talking about “land value sharing”. She suggested that the Masterplan Consent Areas (MCAs) proposed in the current Planning Bill could provide an opportunity to do this,

“The debate about how publicly created uplifts in land value should be shared between society and private landowners is one that has waxed and waned for decades.

“There is a strong public interest justification for pursuing policies that would enable more of the publicly created increases in land values to be used to help make places where people want to live.

“Our research over the last year shows there is no quick fix and whatever happens, there still needs to be an adequate supply of land brought forward for development.

“Longer term, we need to find ways to establish a more collaborative approach to place-making.”

Today’s recommendations to Scottish Government are informed by 18 months of research, including a joint report from the Scottish Land Commission and Scottish Futures Trust, Funding Scotland’s Infrastructure published today.

Neil Rutherford, senior associate director at the Scottish Futures Trust, explained:  “Infrastructure is vital to Scotland’s economic prosperity. It enables inclusive growth and supports all our daily activities. This belief has driven the joint work of SFT and the Scottish Land Commission on our Enabling Infrastructure study. The study itself looks at how a layered approach across such diverse areas as policy, planning and funding can collectively enable a more efficient and effective system for infrastructure delivery. This includes considering the role that land value uplift capture may play.

“We very much look forward to developing the findings of the report to enable and deliver Scotland infrastructure needs.”

The report is part of the Land Commission’s ongoing work on land supply for development as detailed in the Programme of Work.

The Land Commission’s next steps is to review the opportunities for land pooling and looking at the systemic change needed for a more collaborative approach to development.