SPF has welcomed the government's decision to postpone wide-ranging reforms to developer contributions and the imposition of any alternative to the planning gain supplement proposal that was dropped by the UK government.

First Minister Alex Salmond confirmed in his announcement this week that the government would proceed with reform of existing guidance on developer contributions (Circular 12/96).  This is line with proposals made by SPF earlier in April of this year and follows recent evidence from Homes for Scotland of the extent of the implications of the credit crunch on expected house-building start-ups.

Dan Macdonald, Chairman of the Scottish Property Federation and CEO at Macdonald Estates commented:

‘It is heartening that the Scottish Government is listening to industry concerns regarding the burdens placed upon developers and how this could in current market conditions be a serious deterrent to much needed investment in the Scottish commercial property industry.  Earlier this year SPF advised Ministers to avoid policy changes that deter investment and development in the current economic climate so the decision to postpone demanding additional developer contributions is a welcome boost to the industry at this time.’

'SPF has suggested a number of improvements to Circular 12/96 (covering developer contributions) and will continue to engage with the government on planning agreement reform.  SPF has always said that developers would not walk away from their obligations but planning agreements must be agreed up-front and not raised at the 11th hour by authorities.  This change in culture must be complemented by ensuring planning contributions are proportionate to the development.’

The decision means the Scottish Government is effectively not pushing ahead with an alternative to planning gain supplement and will instead focus on improving the existing system of planning contributions through revision of planning Circular 12/96.  This is as suggested by SPF earlier in the year and is welcomed by the commercial property industry.

The SPF proposals may be accessed here and the First Minister's statement can also be accessed here.