Planning fees ‘single out’ retail and leisure sectors, developers warn

29 Jun 2012

Policy area: Development

Analysis carried out by the Scottish Property Federation (SPF) shows planning fees in Scotland could more than double for retail and leisure developments under plans being drawn up by the Scottish Government.

Local Government and Planning Minister Derek Mackay announced in March that the Scottish Government intends to overhaul and increase planning application fees, but only in exchange for an ‘inextricable link’ to an improved service from local planning authorities.

While the SPF supports the link between planning fees and performance it warned that the new fees in Scotland will now in some cases exceed those charged south of the border. For retail and leisure developers fees will increase from £319/100m2 to £500 and then up to £800/100m2 for developments larger than 2500m2. Overall the planning fees are increasing from a cap of £15,950 to £100,000. 

New research by the SPF shows that an 80,000sq ft retail development would attract £23,000 in planning fees in England but the Scottish proposals would see the developer fork out £53,000.

David Melhuish, director of the Scottish Property Federation, said: “You do have to question how the benefit of improvements in the planning service will be measured and achieved for the increased fees.  There has been a huge drop in the number of major planning applications yet ‘service’ as measured by timeliness has dropped in the same period.  Consequently there remains considerable uncertainty about how the sanction of reducing fees for underperforming councils will work in practice and the business community will want to see much greater clarification in this key area of the planning reform agenda.”

On top of a reform of planning application fees the SPF has warned an additional development levy could be mistimed.

Melhuish added: “We’re concerned the development levy, similar to the Community Infrastructure Levy in England and Wales, and how it relates to the existing system of charging developers for planning obligations in Scotland.  We would expect that proposals for a development tax would make securing finance and backing for development schemes even more difficult than it currently is.  The timing of this proposal is questionable during such a phase of weak market demand, access to finance and development activity.”