The national Planning Framework 4 (NPF4) was adopted on 13th February 2023, and now forms part of the Local Development Plan. Detail relating to developer contributions in Angus is embedded in the existing Angus Local Development Plan 2016 policies: Policy DS5 Developer Contributions and Policy TC3 Affordable Housing and are supported by this supplementary guidance.
Policy DS5 Developer Contributions
Developer contributions may be sought from all types of development where proposals individually or in a combination result in a need for new, extended or improved public services, community facilities and infrastructure, Contributions may be financial or in-kind and will be proportionate in scale to the proposed development and the tests set out in national policy and guidance.
Where contributions cannot be secured through a planning condition a Section 75 agreement or other legal agreement will be required.
Contributions may be sought for the following-
Open Space, biodiversity enhancement and green infrastructure, including infrastructure relating to the water environment and flood management.
Education
Community Facilities
Waste Management Infrastructure
Transport infrastructure
The council will consider the potential cumulative effect of developer contributions on the economic viability of individual proposals.
Supplementary Guidance will be prepared, consistent with requirements of Scottish Government policy on planning obligations currently set out in Circular 3/2012, to provide additional information and guidance on how developer contributions will be identified and secured. This will include the levels of contribution or methodologies for their calculation, including thresholds, exemptions, and viability considerations. Whilst the exact nature of contributions will be negotiated at the time of application, potential areas of contribution are highlighted in site allocations where known.
Policy TC3 Affordable Housing
Angus Council will seek to secure the delivery of affordable housing equivalent to 25% of the total number of residential units proposed on all residential sites of 10 or more units, or where a site is equal to or exceeds 0.5ha.
Where a qualifying site is being developed in phases of less than 10 units or less than 0.5 hectares the affordable housing requirement will be applied based on the overall capacity of the site.
Angus Council will work in partnership with developers and consider innovate and flexible approaches to secure delivery of an appropriate affordable housing contribution. Where appropriate Section 75 or other legal agreements may be used.
Details of the scale and nature of the affordable housing contribution sought from individual sites, including tenure, house size and type, will be subject to agreement between the applicant and Angus Council taking into account
local housing needs (set out in the current Housing Needs and Demand Assessment)
physical characteristics of the site
development viability, and
availability of public sector funding
The Affordable Housing Policy Implementation Guide sets out how the Council will implement this policy and secure the delivery of Affordable Housing in line with the provisions of Scottish Planning Policy and guidance.
The supplementary guidance sets out clear guidance on the type of development required to make contributions, and the methodologies used in the calculation of contributions under Policies DS5 and TC3.
The Planning Service has worked collaboratively with services within Angus Council in order to provide a robust analysis on how the Developer Contributions policy will be implemented.
What are Developer Contributions?
Angus Council recognises the important role new development plays towards encouraging sustainable economic development. However, it is acknowledged that a partnership approach in conjunction with the development industry is vital in ensuring new development and the associated infrastructure is successfully delivered.
Policy 18: Infrastructure First
National Planning Framework 4 sets out the policy tests which should be met where a planning obligation is entered into:
- be necessary to make the proposed development acceptable in planning terms
- serve a planning purpose
- relate to the impacts of the proposed development
- fairly and reasonably relate in scale and kind to the proposed development
- be reasonable in all other respects
Developer contributions are required towards infrastructure needed to make a development acceptable in land use planning terms. These may be provided in kind, either on site or off site, or through a financial contribution.
Requirements for developer contributions will vary depending on the location, nature, and scale of proposed development, taking into account the location and capacity of existing infrastructure provision. Therefore, the requirement for developer contributions across Angus will be considered on a case-by-case basis.
What are Affordable Housing Requirements?
Affordable Housing is defined in National Planning Framework 4 as “good quality homes that are affordable to people on low incomes”.
Policy TC3 seeks to secure delivery of affordable housing on all qualifying allocated and windfall residential sites. This policy applies to the four Angus Housing Market Area’s and is based on the assessment of the requirement for affordable housing across Angus provided by the Tayside Housing Needs and Demand Assessment (2022) (HNDA).
Whilst the provision of affordable housing to meet an identified need is not a developer contribution, but nonetheless required, the Council considers that this document is appropriate to set out the approach on how affordable housing will be delivered in Angus.
Format of the Guidance
The guidance sets out detail on the approach to developer contributions including how contributions are secured and managed.
Please note, each application is assessed on a case-by-case basis, and while the information provided sets out the likely level of contributions this is subject to variation depending on the nature, scale, and location of individual applications.
Approach to Developer Contributions
Developer Contributions are likely to be required for the following types of development, including change of use proposals:
Residential Development
Development of 10+ units, or a site area in excess of 0.5 hectares, or where a residential development’s cumulative impact may have an impact on infrastructure will be expected to contribute proportionately.
Contributions will not usually be required for residential development of less than 10 units. However, where a proposed development is for less than 10 units but exceeds 0.5ha then contributions will be required.
Where a development proposes subsequent units, both within the original site boundary, or where conterminous boundaries will result in a development which exceeds 10 units, contributions will be required to ensure the impact of the proposed development is mitigated.
This will apply in all instances where the development meets a 10-unit threshold.
Each proposal will be assessed on a case-by-case basis to establish the requirement for Developer Contributions, with a preference for on-site provision in all but exceptional circumstances. Contributions are set out on a per unit basis.
Qualifying residential developments may require to contribute towards:
Open Space, biodiversity enhancement and green infrastructure
Education
Community Facilities
Transport Infrastructure
The table below summarises where developer contributions may be required, based on the type of development proposed.
| Type of obligation | Residential | Affordable Housing | Commercial |
|---|---|---|---|
| Education | required | - | - |
| Open Space | required | required | required |
| Community Facilities | required | - | - |
| Path Network | required | required | required |
| Affordable Housing | required | - | - |
| Transport | required | required | required |
Commercial Development
Commercial developments with a site area equal to or in excess of 0.5 hectares, or where the nature of development gives rise to infrastructure impacts, may require to contribute towards Transport Infrastructure and/or Open Space (public and amenity open space only), biodiversity enhancement and green infrastructure.
Each proposal will be assessed on a case-by-case basis to establish the requirement for Developer Contributions, with a preference of on-site provision. Where this is not possible then a financial contribution may be required.
There is no standard methodology for any contributions to Transport Infrastructure and any required contributions will be related to the mitigation required and detail from a Transport Assessment.
For open space contributions an equivalent per unit calculation is undertaken and weighting factor applied to reflect the likely occupation levels within a particular use class.
To calculate an equivalent per unit, the Gross Floor Area (GFA) in sqm of the building is added to 50% of the proposed parking area (PA) in sqm and then divided by an average plot size of 400 sqm. This would then be multiplied by the weighting factor for the relevant use class.
GFA + PA/2 = SQM Total/400 = per unit number
Where planning applications for Planning Permission in Principle, and where the GFA may not be known, a condition will be applied to any permission indicating that this Supplementary Guidance methodology will be applied at the time of future applications.
The following weighting factor would then be applied to the open space rate to be applied to employment use proposals:
| Use Class | Weighting Factor |
|---|---|
| Class 4 | 0.75 |
| Class 5 | 0.2 |
| Class 6 | 0.2 |
| Sui Generis/other use Classes | Based on nature of application |
Sites with Planning Permission
Assessment of the impact on infrastructure and the requirement for Developer Contributions will apply to new planning applications on sites with planning permission that:
Have not been lawfully implemented. In assessing potential developer contributions account will be taken of previous application history. Such applications should be supported by a statement setting out the implications of current policy requirements on development viability.
Have been lawfully implemented and the new application would result in a net increase in units (e.g., thorough subdivision of plots, or additional units proposed) from the original permission. Developer contributions and/or affordable housing requirements will apply to the net increase in units.
New planning applications on sites with planning permission that have been lawfully implemented and would not result in an increase in the number of units will not require to be re-assessed in line with current policy requirements.
How are Developer Contributions Secured?
Where developer contributions cannot be secured through a planning condition, contributions may be secured through either an upfront payment under Section 69 of the Local Government (Scotland) Act 1973 or through a Planning Obligation agreement under Section 75 of the Town and Country Planning (Scotland) Act 1997 as amended. Sample Section 75 templates are available from Angus Council on request.
Where an upfront payment is the preferred method or remittance this must be concluded before planning permission can be issued.
If there is an affordable housing requirement and/or the level of contributions are such that phased payments have been agreed as part of the package, then the applicant will require to enter into a Planning Obligation agreement. This will set out the terms and conditions of the Planning Obligation. The broad detail (including level of contributions and percentage of affordable housing) will require to be agreed prior to the determination of the planning application. In appropriate circumstances, a negative suspensive condition would be included that requires a planning obligation to be concluded.
In circumstances where a planning obligation is required to be concluded before the grant of planning permission, a time limited period of 3 to 6 months is likely to be provided for conclusion of that obligation.
Indexation of Contributions
All rates as set out in this guidance are correct as of April 2023. Contributions will be index linked to the Building Cost Information Service (BCIS) All-in Tender Price Index at April 2023, which may go up or go down. The index figure at April 2023 is 383. This will be the relevant index within any Legal Agreement. Affordable housing commuted sums will not be index linked.
While build rates have risen significantly, to provide certainty within the current plan period, we have maintained the current position with indexation applied to relevant contributions rates only.
Management of Developer Contributions
Financial contributions received will be held in the Council’s balance sheet in a unique account, to which Interests on Revenue Balances (IROB) interest is added on a monthly basis. In the event of a contribution not being committed within 10 years from the date of final payment of a contribution, the contribution or phased payment contribution will be refunded to the applicant or their nominee along with relative interest accrued.
Council services work together to monitor the payment and use of developer contributions. Developer contribution information is reported to the Development Standards Committee on an annual basis.
Phased payments
To support new development Angus Council are committed to providing the opportunity for developers to phase payments. However, to ensure development contributes in a timely manner for provision to be delivered when it is needed, phased payment options will be considered on a case-by-case basis.
Development viability
Angus Council recognises that there may be instances where unforeseen costs may affect development viability and may take this into account dependent on circumstances at the request of the applicant. As an example, a listed building and associated costs of development would not be classified as an unforeseen cost. There is an expectation of developers to undertake a full development appraisal at the outset of their development which takes into account all likely costs including developer contributions and affordable housing requirements. Angus Council cannot take into account viability where this has not been considered.
For unforeseen costs to be taken into account the developer is required to submit a Development Viability Statement prepared by an appropriately qualified professional. This allows a comparison of costs to be evaluated, in comparison to projected value.
The Development Statement must comprise the following:
A copy of the development appraisal setting out the allowance for developer contributions and affordable housing.
Cost plans providing estimates which include a detailed breakdown produced by RICS.
Information on additional development costs pertaining to the proposed development with detailed specifications, including external works.
Reports detailing the nature, extent and financial implications are required.
Projected market valuations for each property within the development, derived from the projected market valuation for each unit.
An indication of the timescales within which each property would be marketed and sold, and where appropriate development phasing information.
Please note all information submitted must be prepared by appropriately qualified professionals.
Where appropriate the District Valuer may be consulted to provide an independent opinion, with the cost met by the applicant.
Next: Methodologies for Calculating Required Developer Contributions