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Breaking News: STF Appeal Decision

Breaking News: STF Appeal Decision

Two of our clients are celebrating today after successfully challenging Aberdeen City and Shire Strategic Development Planning Authority’s Strategic Transport Fund (STF) planning guidance in the Court of Session. 

The STF guidance required developers to pay contributions on a “roof tax” basis into a central pot to be used towards strategic transport measures across a wide area. 

Elsick Development Company (EDC) and Goodgrun Ltd argued that the guidance was unlawful as it ignored Scottish Government policy on planning obligations as set out in Circular 3/2012.  In particular, the guidance failed to establish a direct relationship between the level of contribution sought and the impact of the development. 

The SDPA’s position was that they were entitled to take a strategic approach to the funding of infrastructure, and levy contributions on a cumulative basis. 

The Court’s decision, released today, confirmed that the SDPA’s  approach was unlawful. 

The Court’s decision provides a useful reminder on the law relating to planning obligations, and will be of significant interest to developers, landowners and planning authorities. 

EDC is the promoter of Chapelton, a new town of over 4000 homes under construction south of Aberdeen City. Goodgrun own land at Blackdog, to the north of Aberdeen, which is being developed for 600 homes.  Both were required to sign up to significant payment obligations towards the STF via Section 75 agreements. 

The Court noted that the Guidance “may be seen as an imaginative idea which allows advanced strategic planning objectives to be achieved in a structured manner, financed by new development. That does not, however, permit the imposition of an obligation on a developer to contribute to an intervention which is simply not related to the proposed development.”

It went on to comment that there is a “distinction … between sharing costs among developments which cumulatively required a particular transport investment and the funding of a basket of measures, not all of which are relevant to every development”.

This decision will be of direct interest to landowners and developers in both Aberdeen City and Shire who have entered into Section 75 agreements obliging them to pay STF contributions. 

Aberdeen City and Shire are not the only planning authorities to operate a “roof tax" approach to infrastructure contributions.  The Court’s decision raises doubts as to the validity of existing planning obligations secured on this basis, as well as calling into question the legitimacy of this approach as Development Plan policy. 

Landowners and developers can apply to have existing Section 75 obligations varied or discharged under the Section 75A procedure (more information on that process can be found here.

Our planning team regularly advises on all aspects of planning obligations, including the drafting and negotiation of planning agreements. For more information please contact a member of our planning team.

Elaine Farquharson-Black