What will Labour’s plans for planning reform mean for Scotland?

By Douglas Fraser, Business and economy editor, Scotland

Getty Images Construction worker Getty Images

The Labour cabinet has planned for power, perhaps more than any government we’ve seen. And at the heart of its plan is… planning.

That’s been identified as one of the main obstacles to picking up the pace of economic growth. Housebuilders and developers of vital infrastructure say that’s a key part of what is holding them back.

They might also add a shortage of construction skills, the rising cost of materials, and the practice of land-banking by housebuilders – slowing development to a pace that does not undermine new-build prices.

It is the process of getting the green light from the local council that has been identified by the incoming Labour government as an early battlefield.

It’s been the subject of the first big policy speech from Rachel Reeves, newly installed as Chancellor of the Exchequer.

Beyond Labour’s expectations, ministers have a problem with so many backbenchers. Lots of them, representing parts of leafy England where Labour MPs have rarely trod, will be under pressure from constituents to oppose developments.

But Labour has a mandate on this, and people who stand in the way of housebuilding and energy infrastructure (wind turbines, very high pylons, sub-stations and new nuclear power) are one group of which the new prime minister has said he’s willing to make enemies.

However, his writ doesn’t run in Scottish planning. This “national mission” on economic growth has kicked off with planning, but it’s up to the Scottish government and Scottish councils to make the planning system work.

And few think it is working. There aren’t enough planners. The big companies who want to develop wind farms on and offshore, and numerous other developments, are recruiting planners from councils, on better pay.

Across the UK between 2013 and 2020, a quarter of the council workforce switched to private employers, according to the Royal Town Planning Institute (RTPI) which represents the profession.

More than four in five councils have trouble with recruiting.

In Scotland, RTPI reported in 2022 that staffing fell by a quarter in the previous decade, while gross spending on planning was down in real terms by 38%.

In April 2022, a fifth of graduate planning roles were vacant, and recruitment is going to get tougher: only 8% of council planners were under 30 and 39% were over 50, said the RTPI research.

The Scottish government concedes that there is a “housing emergency” – including rising levels of homelessness, and the cost to buy, to mortgage and to rent, which is most acute in some urban and rural tourism hot spots.

Scottish housing completions don’t look like hitting a 10-year target set by ministers.

Aiming for 110,000 by 2032, one housing forum estimates it might hit 60,000. Housing starts have fallen 15% in the most recent annual figures, and housing completions are down 17%.

On the bigger energy projects, the Scottish government has left SSE Networks to carry forward the necessary improvement in grid capacity to link the north of Scotland with markets in the south.

In areas of the Highlands and Aberdeenshire affected by planned new grid lines, there is a lot of anger, but concern also from the industry that it will continue to face obstacles and delays, including possible public inquiries.

Fourteen years to put a grid line in place is expensive, and will surely stall the ambitious plans for net zero.

SSE Renewables Wind farm SSE Renewables

Ministers have been criticised for failing to sort out the planning application for the vast Berwick Bank offshore wind farm in time for its developer, SSE, to apply this year for a share of the subsidy – a guaranteed floor price – that is channelled to customer bills by the UK government and its regulator, Ofgem.

The renewable energy industry wonders aloud if governments are serious about getting to net zero on schedule, when it can’t even manage one high-profile application.

Yet the Scottish government says such consents are a matter for the UK government, and it is working with Whitehall to get ready for many more applications for offshore wind in Scottish waters.

Developers say there is a big and direct effect from speeding up the planning system, warning that Scotland faces very similar problems to England.

Keith Anderson, chief executive of Scottish Power, says: “Prioritising clean energy infrastructure and building at speed and at scale will unleash strong economic growth across the country.

“If the UK can halve the time it takes to get renewables, electricity grid and storage projects through the planning system, we’ll look to double our investment over the coming years.”

‘Very encouraging’

Jane Woods, chief executive of Homes for Scotland, representing housebuilders, says Rachel Reeves speech on planning was “very encouraging”

“But with both of these matters devolved, will the Scottish government listen to those who are saying unequivocally ‘it’s not working for us’ and recalibrate to change the alarming downwards trajectory on housing numbers,” she asked.

“Will it bravely acknowledge that the root causes lie not only in UK capital budgets but in an under-investment in our planning regime and a regulatory environment that fails to recognise the unintended consequences of policies created with poor understanding of the costs, the impacts on consumers and, critically, on those organisations, both private and public, who build the much-needed homes of all tenures that we require?”

From the Scottish government comes the response that it’s already on the case, and is now trying to implement reforms.

While the RTPI has said Scotland’s planning reforms give planners dozens of new responsibilities without new funding, the Scottish government is now trying to increase councils’ capacity and improve their performance. It’s even offering to help Rachel Reeves with what it’s learned so far.

A Scottish government spokesperson said: “We have already significantly reformed Scotland’s planning system and are now focused on ensuring planning authorities have the capacity and skills to improve consistency and increase confidence and certainty in the planning process.

“We would welcome the opportunity to share learning from our reforms with the UK government as part of activity to establish a constructive relationship.”

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