With numerous green shoots starting to appear across the development landscape following recent turbulent times, the last thing that developers would want or need is uncertainty when it comes to the negotiation of planning obligations, particularly when often the viability of schemes can be on a knife edge, with additional (unreasonable) planning obligations making the difference between choosing to invest now or further down the line.

A recent planning case, Appeal by Omnivale Ltd against the decision by Fife Council (5 October 2022, PPA-250-2338) has helped in this regard. The reporter in this instance found that, owing to draft supplementary guidance on planning obligations having not yet been adopted by the council, it was lawful for the planning obligations to be negotiated between the council and developer and not in accordance with draft, unadopted, supplementary planning guidance.

The appeal in detail

A planning application for permission in principle was submitted in January 2017 for a site of 5.7 hectares on land to the north of Wellwood with an estimated capacity of 100 houses as part of the North Dunfermline strategic development area. The allocation refers to the northern link road, flood risk assessment and the restoration of the water environment.

Planning permission had been refused in the first instance owing to the appellant developer not supporting the provision of the Dunfermline Northern Link Road or providing any other type of integration or mitigation for traffic impact, and this was found to be contrary to local development plan policy. It was decided that a hearing session would be most appropriate for the appeal owing to, among other things, the issues regarding the validity of proposed developer contributions.

One of the most controversial grounds for refusal of the planning permission in the first instance related to the requirements for developer contributions. Policy 4 of the council’s local development plan states that developer contributions will be sought in relation to development proposals that will have an adverse impact on infrastructure capacity. Contributions can be made by making a contribution to existing infrastructure, providing additional capacity, improving existing infrastructure or providing new infrastructure.In 2017, the council submitted supplementary guidance on planning obligations to the Scottish Ministers. Before the guidance could be adopted, further points of clarification in relation to the draft guidance were sought from the council by the Scottish Ministers which were never addressed and, as such, the appellant argued that “the relationship between [the] development site and an identified strategic infrastructure improvement has not been proven”.

It was therefore considered by the appellant that the guidance should not carry any weight in the planning balance. The reporter agreed, and held that planning obligations should therefore be left to agreement between the council and the developer, and should not be a reason for refusal of the planning permission.

The appellant relied on Aberdeen City and Shire Strategic Development Planning Authority v Elsick Development Company Ltd [2017] UKSC 66, in which it was held that pooling contributions into a county¬wide fund was unlawful. The reporter had “some sympathy with the arguments against the pooling of funds” and
directed the parties to instead negotiate appropriate mechanisms into the section 75 agreement.

The hearing was duly adjourned for that reason, following which the parties reached an agreement on the relevant heads of terms for the planning agreement. Accordingly, the reporter confirmed that planning permission would be granted in due course subject to the entering into of a planning agreement in order to secure the requirements relating to transport and education and, in doing so, the planning permission would be in accordance with the development plan.

The takeaway point

This decision is a reassuring reminder in uncertain times that reporters are determining planning applications in accordance with development plans in the appropriate way and are keen for parties to negotiate mitigation measures in planning agreements when lawful to do so. This enables planning permissions to be determined more expeditiously, with land values being secured for either onward sale or investment.

It also serves as a reminder to developers submitting planning applications of the importance of undertaking a thorough review of the status of various draft policy documents and also the reasons that any draft policies have not yet been adopted, as such information can be used during the negotiation of planning agreements and save time and cost going through the courts for the desired outcome.

It is also a useful decision for developers who have relied on the principles laid down in Aberdeen v Elsick, which still remains “good law”. However, it is also a cautionary tale for councils which are seeking to adopt new supplementary planning guidance that they should do so in a timely manner, and the Scottish Ministers will not look favourably on draft guidance that has not been adopted (or which has outstanding issues left to be resolved) when determining planning appeals.

The article first appeared in Estates Gazette egi.co.uk on December 5, 2022.