Forecast of big increase in planning gain

By Edward Marr

PLANNING gain is going to cause a lot of financial pain, according to Alastair Wood, Edinburgh-based head of planning and regeneration at Savills.

He says the Scottish Government has released figures illustrating the economic and financial benefits for the public sector of infrastructure payments connected with planning permissions (known as planning gain) over the past three years. And it has

Wood: Warning for developers

forecast revenues until 2010, which Wood says will bring some dramatic cost increases for developers.

From 2004-5 up to 2006-7, payments grew markedly, from £14.4 million to £52.7 million. The number of agreements is increasing annually, showing how local authorities are increasingly looking to development projects to help finance new roads, schools and affordable housing.

The Scottish Government has made several forecasts for 2010, ranging from £91 million to £127 million – some 81 per cent more than in 2004-5.

Wood says that moves in England to introduce a community infrastructure levy are also being examined by the Scottish Government and could result in a review of how major infrastructure projects such as a high-speed rail link between Edinburgh and Glasgow or the new Forth Road Bridge could draw on development to part-fund costs.

He comments: “Developers need to be aware of this steady increase in revenue sought by local authorities through planning gain. Those who do not present a coherent strategy from the outset may be surprised by the levels of funds requested.”